Truck driver shortage high on list of concerns
October 27, 2006 by SwizStick
Filed under 3PL, Supply Chain Management
The results of a GE Capital Solutions survey point out fuel prices and the driver shortage as the most serious concerns facing trucking firms:
The survey indicated that roughly 70 percent of respondents think that fuel prices are putting their businesses at the most risk. Sixty-nine percent felt that driver shortages were the top concern for business, and another 40 percent said that excessive regulations were the biggest threats to business performance.
While these concerns are not new in the trucking industry, it does not present a rosy outlook for shippers, according to Serena Tse, senior analyst at GE Global Solutions.
“From the shippers’ perspective, I think that the biggest takeaways are that both shipping costs and availability of trucks are probably not going to measurably improve in the foreseeable future,†Tse told Logistics Management.  “Continuing high fuel prices and the driver shortage are creating an environment which has resulted in increased shipping rates and a scarcity of transportation.â€
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And more than one-fifth of respondents (22 percent) said the driver shortage will continue to hamper their delivery operations for getting goods to existing customers. In the U.S., the findings revealed that 20 percent of additional freight opportunities have the potential to be affected.
Availability is already a concern for drayage customers in heavy trafficked ports such as Los Angeles/Long Beach and NYC. Availability for long haul truck lanes such as NY/NJ to the West Coast and other areas can also be tough. The situation will only worsen over time and another issue to be concerned about as trucking companies attempt to find new drivers is also the shortage of good, professional drivers. As we all know there are good ones and bad ones, and with the shortage that means the bad ones are able to hang onto their jobs longer and increases the chances of less-than-professional new hires.
Shawn in Tokyo on Fri, 27th Oct 2006 5:47 am
It’s pretty interesting how similar the problems are in Japan. Except here,
most Japanese companies have been unable to pass on higher rates to clients.
As you can imagine, this kills margins and in several cases, can kill entire
companies unable to internally innovate in regards to cost structures.
opendna on Tue, 26th Dec 2006 11:42 pm
Clearly, shippers are price seekers and transportation companies don’t have the juice to resist downward pressure on prices. Wages for truckers are below replacement levels, fuel prices are rising, but prices are virtually stagnant. Maybe, just MAYBE, (and I know it’s a tremendously unpopular thing to suggest) the answer to the bleak future facing trucking companies is MORE regulations.
Back in the day the Federal government set tariffs, and the tariffs made it possible for anyone to turn a profit honestly. Tariffs make a viable transportation industry a policy concern and put everyone on a level playing field. While that’s tough for big shippers that are used to getting preferential prices and treatment for their volume, at least it could establish a sustainable price floor.
If we could remove price from the negotiating table and we’d see REAL innovation to increase efficiency – by transportation companies AND shippers – instead of deficit pricing masking operational inefficiency.
I suspect many companies are hoping to make up the slack with Mexican truckers operating under NAFTA, but… “Murphy’s Law on 18 Wheels”, eh?