The US needs 50,000 truck drivers to avoid a shipping squeeze

Retailers are facing a shipping squeeze, and the trucking industry just can't keep up.

According to the American Trucking Associations, there's a shortage of roughly 50,000 truck drivers across the country. And it's hitting both businesses and consumers in the wallet.

Companies are complaining about how the driver shortage is impacting their business. Meanwhile, the cost of convenient shipping is starting to catch up with consumers.

Amazon recently hiked its Prime membership to $119 a year from $99 a year. The retail giant said one of the reasons for the price jump was increased shipping costs.

But the driver shortage isn't just because of demand created by online shopping. There's a lot going on behind the scenes, according to Bob Costello, chief economist at American Trucking Associations.

"We have a demographics problem, demand is strong, trucks haul over 70 percent of the freight tonnage, our average age is very high, [and] we don't have enough females," said Costello.

It will take better pay and better working conditions to get any significant percentage of that industry’s missing drivers filled, and yes a good chunk of those costs will get passed into the retail industries, and even the prices you pay for things.

I do not think the trains can help. Why? From a single loading point a full dock-load of stuff can be loaded on a fleet of multi-destination trucks that will get their loads to more final destinations & faster than is possible by trains loaded to go to one or two different regional transfer points from which trucks will then be needed to get the stuff to distribution centers.

Trains have one problem that trains cannot cure. They are good at carrying big loads from point A to point B. While a fleet of trucks can carry that same load, broken down and sent to points A, B, C, D, E, F, ect., ect., as needed. Just look at an Intermodal shipping map for the Los Angeles-Long Beach area, and count the difference in the possible train routes against the possible Interstate routes.

I think the trains cannot win.

http://www.cargobusinessnews.com/SoCal14_IntermodalMap.pdf

The distribution industry has already built and continues to build out its infrastructure in an Interstate-Highway-centric fashion.

But that industry has been built with underpaid and over worked drivers to keep its costs down and its profits up. Those profits did help it build. Now it is time to put all that capital to work against the retail industries that want their shipping costs to be cheaper than what well paid drivers deserve.

Here is the data in two points:

“The pay isn’t bad: Truckers earn a median annual wage of $37,930, which is $4,000 more than the median wage for all jobs, according to the BLS. The top 10% of truck drivers make more than $58,000 per year.”

“The 2017 nominal median income [for all workers] per capita was $31,786. The mean income per capita was $48,150.”

Truck drivers incomes are not far enough above overall national median incomes to attract the drivers they need. If that was not the case, they be getting more drivers instead of having so many vacancies.

All these articles keep talking about how the truck shipping industry can’t get enough drivers. Meanwhile that industry does nothing to improve the pay and operations for truck drivers in ways that would attract the drivers they need. That industry needs to quit complaining and start making changes that will attract the drivers it needs.

“Rail to distribution points and truck locally.”

Perhaps I should have said distribution hubs which could be a tri-state area or perhaps state-by-state.

You replied:”We don’t have the rail capacity to operate that way”

And I belabor the point by saying:
Maybe not 100% but I’m pretty sure every state has rail in and out of it, and I’m pretty sure you could put a couple maybe three per state and truck it within the state. Locally doesn’t mean three blocks away it could extend state-by-state or as I said, two three possibly four distribution points per state and that would reduce the amount of trucking somewhat if not significantly I would think.

Perhaps “locally” was the wrong adverb to apply to that comment. However, “regionally” would also be wrong as it could encompass in a number of states lumped together.

What really underscores the inefficiency of our current system is the fabled and adhered to “Just in Time” (JIT) Manufacturing to order.

Customers want it, and they want it now. And is the customer always right? I counter that the customer is always right, unless they are wrong. And in this particular case the customers who are demanding just-in-time manufacturing and the cost associated with delivery and the fact that we now have a trucker shortage amplifies that perhaps the theoretical application of our current logistical consumer delivery system has a flaw.

One freeper recommended that we hire 50,000 Filipinos to fill those empty trucker seats. Not a bad idea, or is it a bad idea?

The overarching issue in freight transportation is that if a load has to be moved by truck for even the last one mile, then the truck will have a cost advantage even for a much longer haul.

A very general rule of thumb is that for any commodity that can be competitively moved by truck or rail (and you'd probably be surprised at how FEW commodities this includes), it will almost always be more cost-effective to move it by truck over any distance shorter than 500 miles. Some railroads have refined their systems well enough that their intermediate-length service can compete with the trucking industry at distances as short as 250 miles, but that's rarely the case and usually only applies to corridors where the railroad is moving very large volumes between two fixed points.

Here's an example of how this works:

Suppose you're a shipper looking to move regular loads of product every week between Cleveland and a regional distribution center (DC) in the New York City metro area. Unless those loads are going directly to a rail siding at the DC, the load is going to have to be trucked from the rail terminal to the DC. So you contact your freight broker and he gives you two options:

1. The railroad can transport it to an intermodal yard in northern New Jersey, and it can then be trucked to your DC 15 miles away. They give you a price of $X, and it will arrive at your DC in 24 hours.

2. A trucking firm can transport it directly from Cleveland to the door of your DC. They give you a price of $Y, and it will arrive at your DC in no more than 10 hours.

Just look at the numbers here and see what the railroad is up against. $Y is going to be less than $X (for a whole bunch of reasons), and the truck gets it there almost 60% faster.

This is obviously a hypothetical scenario ... because the railroad probably wouldn't even bid on this load at all.

This is a very astute observation, and it gets raised all the time in every manufacturing company in the U.S. Let's start off by saying that there isn't a "flaw" in the delivery system. It's simply a matter of how industries react to constraints in different parts of their supply chains. In my experience, four things are happening to address the limitations imposed by this driver shortage:

1. The customer is willing to pay more for the delivery service (in some cases).

2. The customer is making accommodations in their own facilities (building more storage capacity, for example) to bump up their freight volumes in transit and build some slack in their supply chain. In effect, it's not so much of a "Just in Time" (JIT) concept anymore.

3. The customer is cutting deals directly with certain carriers to get the best of both worlds -- by getting discounted rates on the freight in exchange for a "preferred carrier" arrangement with the trucking firms.

4. Manufacturers are looking more closely at building their facilities close to ports and/or intermodal rail terminals where they only need to truck their loads over the last few miles of a trip that may be thousands of miles long.

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