Drivers Wanted: Shortage of Trucking Capacity Fueling Surge in Freight Shipping Costs

The next time a manager at a warehouse or distribution center meets a truck driver nearing retirement, he should roll out the red carpet. Showing some special treatment might be one way to keep these guys on the road for a few extra years.

 According to the American Trucking Associations (ATA), the industry faced a shortage of about 51,000 drivers at the end of 2017, and that figure is likely to climb to about 63,000 this year because of the strong economy, low unemployment rate, construction projects following the natural disasters of 2017, and the use of electronic logging devices to regulate drivers’ hours of service.

 For manufacturers, distributors and retailers, the driver shortage is leading to rapidly rising costs to move freight. Shippers are searching for operational efficiencies to reduce the number of trucks they need, and are investing in high-quality protective packaging materials so loads arrive undamaged, reducing wasted capacity stemming from return shipping. Still, the steep rate hikes are taking their toll, forcing many shippers to pass on the extra expense to the consumer.

 Trucking Companies are in the Driver’s Seat

The existing pool of truck drivers is graying fast, which adds to the problem. The ATA’s most recent report on the issue, “Truck Driver Shortage Analysis 2017,” found that the average age of truck drivers in the over-the-road (or nonlocal) sector is 49, compared with just 42 for all U.S. workers, and for private fleet drivers, the average age is 52.

 With the vast amount of retiring drivers and the eCommerce boom, the trucking industry will need to hire roughly 898,000 new drivers over the next decade – and finding nearly a million new drivers will be even more difficult considering the nation’s low unemployment rate. According to the report, replacing retiring drivers will account for about 49 percent of new driver hires, with industry growth being the second-biggest factor at 28 percent of new hires.

 The shortage of drivers and trucks, combined with the additional regulatory requirements and surging demand, has left many shippers feeling the strain of increased freight costs. This year, many companies are experiencing a 20% increase in freight-related costs. The Wall Street Journal reported in August that spot market rates rose 29% compared to July 2017, which results in 17-straight months of gains and an unprecedented stretch of year-over-year increases. The journal said that it’s the longest sustained period of pricing growth since the industry was deregulated in 1980.

“This year, many companies are experiencing a 20% increase in freight costs.” 

 Reducing Return Shipping

One simple way shippers can maximize trucking capacity is to protect their loads with quality packaging materials and ensure right-size packaging. According to an analysis of claims from the TT Club, a leading insurer for the transportation and logistics industry, 65 percent of damages to cargo result from poorly packed, blocked or secured cargo in trucks and freight containers.

 Investing in the best packaging solution to match the shipping network is one way shippers can reduce wasted capacity and save on freight costs. And beyond that, shippers should also focus on ways to reduce damaged cargo and the costs and waste associated with insufficient package protection. Another, far-less-effective strategy to aid this widespread industry issue: rolling out the red carpet for all truck drivers ages 60 and older. Hey, it might be worth a try.

For a detailed look at Pregis’ full line of protective shipping materials, visit www.pregis.com/solutions.