LandLinkBLOG_banner.jpg

Managing the Driver Shortage from a Shippers Perspective

Posted by admin on Oct 8, 2014, 8:37:00 AM

Driver shortage remains a significant problem in the trucking industry. Carriers have committed a significant amount of attention of late in increasing driver pay packages and recruiting efforts, especially on the truckload side. Sign on bonuses from thousands of dollars to Caribbean vacations are common. This summer, many well-known carriers, including Swift Transportation, Con-way Truckload and US Xpress made what amounts to a full-on press regarding increasing driver wages in an effort to secure more capacity and keep their wheels moving, as well as to prevent driver turnover at a time when it is becoming more difficult to recruit and retain drivers. These tactics will mostly help recycle existing drivers among carriers. 

Today, the industry has in the range of 30,000 to 35,000 unfilled truck driver jobs. American Trucking Associations Chief Economist Bob Costello said. “As the industry starts to haul more because demand goes up, we’ll need to add more drivers, nearly 100,000 annually over the next decade, in order to keep pace." The problem is that young people are not choosing trucking as a career today at a rate necessary to satisfy projected demand. At the recent Council of Supply Chain Management Professional (CSCMP) Annual Conference in San Antonio, Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report, made the driver shortage situation very clear with a simple sentence: “the driver shortage could be the leading problem for the entire economy.” The $100,000 annually paid truck driver may be on the foreseeable horizon. These increased costs will, of course, be passed on to the shippers.

Shippers will need to consider making significant commitments, financially and contractually, to retain future capacity. A contingency plan will most certainly be a necessity. Alternatives to over the road trucking need to be considered as well as increasing the volume and timing of shipments. A 3PL could be very effective in aiding shippers with these choices. View some actual client case studies on improving outbound efficiency by clicking here.

 

Topics: Third Party Logistics