Capacity Crunch

No, capacity crunch is not a cereal. It’s what almost every third-party logistics company (3PL) is dealing with today. It’s a shortage of trucks.

Why are trucks in short supply? Let’s start with the economy. It’s pretty good right now. When the economy is good, it’s good for truckers. There are lots of goods to ship.

This truck shortage is even more pronounced. During the Great Recession, many carriers went out of business and a lot of older drivers retired or found other careers. Then there are CSA scores. If a driver has a valid license but has recent traffic tickets, it can drag down a company’s CSA score. So carriers have to let them go. There just aren’t enough violation-free drivers to go around.

To make things worse, the driver pool is old and getting older. Not enough young people are choosing driving a truck as a career choice. And why would anyone with options choose driving? Truck drivers are generally treated poorly and paid poorly. If that’s not enough, the roads are crowded; many are in very rough shape, while others are endlessly under construction. After that, you have governments that pad their budgets by issuing as many tickets to carriers as they can.

Interestingly, there is an unexpected solution coming and it’s coming sooner than most people realize. Driverless trucks could be on the road in as little as 10 years. They are already being commercially used in mining and other off road uses. Maybe the next generation of driverless trucks will be confined to the interstates, but that will be enough to change the industry. Having drivers just having to make pickups and deliveries will be much more cost efficient than having to pay for them to drive long distances.

Google already has self-driving cars and they work pretty well. Currently Google reports that they have less than one ‘incident’ every 5000 miles. An incident isn’t necessarily an accident; it’s just something that Google deems a ‘bug’. In comparison, three years ago, Google was reporting one incident every 500 miles. Google expects that when the incidents get reduced to every 50,000 miles, driverless cars should be as safe as cars with drivers. That is estimated to happen in 2018. So by 2025 driverless cars (and trucks) will be much safer than cars and trucks that humans drive. This technology has the potential to lower freight rates, make the roads safer, speed deliveries, and even reduce traffic at peak times

What can a do about the truck shortage in the meantime? Here are some ideas:

Partner with your existing carriers: If a carrier does a good job, find out what else he does that you need. Build a relationship; ask your new carriers what lanes they need help with. Build an electronic profile so you can help them when your business matches their needs. Keep asking your regular carriers too. Things change. If you are helping a carrier by getting them loads out of a tough area, they are much more likely to want to help you with other less than perfect freight.

Use technology: You can make it a lot easier for your carriers to know about your company and the freight you have that is available. Use targeted email load offers, broad-based email blasts. Draw carriers to your web site with contests or prizes.

Respect the carrier’s time: To a carrier, Time is money. Every minute a driver is delayed, it’s a mile of revenue that wasn’t earned. Make it your #1 priority to get their trucks moving.

Faster payment: Everyone likes to be paid fast. The faster the better. Many companies charge for quick-pay. If you want to stand out from the crowd, offer faster terms at no discount.

Pay more: Carriers want what you would want: Higher pay.

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