September 2004 | Commentary | Checking In

Carriers, Customers Confront Costs, Capacity

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Motor carriers are struggling with several issues as they strive to keep customer service levels high and costs low. But two main concerns rise to the top, according to carriers and their customers: escalating costs and the current capacity crunch.

Escalating costs. There's no uncertainty about which way fuel and insurance costs are headed. Prices will continue to rise significantly this fall, and stay high for the foreseeable future.

In addition to fuel and insurance increases, watch out when the Heavy-Duty Highway Diesel Rule goes into effect January 2007. The rule creates environmental regulations requiring cleaner-burning truck engines.

Bottom line: a possible 18-percent drop in fuel efficiency and up to $8,000 extra per tractor purchased.

Capacity crunch. The new Hours of Service regulations are on hold, after a federal court ruling said the Federal Motor Carrier Safety Administration failed to consider the driver's health when drafting the HOS rules. New HOS rules will reduce capacity further, some fear.

But the real capacity worry is the driver shortage. Greener trucks are going nowhere without good drivers at the wheel, especially as the economy picks up and demand for trucking services increases.
Carriers compete for a limited pool of drivers.

Recruiting and retaining enough good drivers to keep equipment rolling remains a continuing challenge. Retaining drivers by offering new, premium equipment; shorter trips with fewer overnights; no-touch loads; improved technology; and higher pay, when successful, helps the capacity of only that carrier. Carriers who are successful at recruiting drivers have a leg up when looking for your business, that's for certain.

But suppose you come up on the short end of your carrier's capacity stick occasionally? In a zero-sum landscape, one carrier's recruitment success necessarily diminishes the other carriers' capacity. Some carriers are starting their own driver-training schools as one way to address this issue, but how about doing something collectively to increase the pool of good available drivers without resorting to importing them?

Here's an idea. Most carrier recruitment efforts are tasked with influencing current drivers. What if the American Trucking Associations planned a national media campaign, like the Army's "be all you can be" effort, to convince some of the almost 20 million people in the appropriate U.S. demographic, to consider driving as a career?

If only a half percent of the audience responds favorably, that would put 10,000 more new drivers in the pool. That won't meet all the challenges, but it would help boost capacity.

A campaign like this would also help boost the image of the trucking industry, which gets plenty of negative PR.

What do you think? Can this idea work, or is it too far-fetched? Let me know at editor@inboundlogistics.com

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