All posts tagged 'driver shortage'

It's Not Over 'Til It's Over

by Cliff Lynch
27. November 2013 10:30

When the U.S. District Court of Appeals rather forcefully allowed the new trucker hours of service rules to go into effect on July 1 of this year, I thought it was finally over. The amended regulations reduced a driver's work week from 82 to 70 hours, limited on the road hours to 11 out of a 14 hour workday, mandated 10 consecutive off duty hours after the workday ended, and required a 30 minute break during the first 8 hours of a shift. The required 34 hour break between work weeks must extend over 2 nights and include the hours from 1:00 am – 5:00 am.

These new rules had been opposed by many, including the American Trucking Associations, motor carriers and drivers; but with the court's decision the matter appeared to be settled. Now I am not so sure. There has been so much pressure brought to bear recently, the entire issue could be attacked again. A bill called the TRUE Safety Act has been introduced in Congress and would roll back the 34 hour provision back to its pre-July 1 language until the Government Accountability office can review the data and rationale. This bill is strongly supported by the ATA, and the American Transportation Research Institute (the research arm of ATA) just released a report on the operational and economic impact of the new rules. Some of the key findings were:

  • More than 80% of motor carriers have experienced a productivity loss. Schneider National has experienced a loss over 3% as have other carriers surveyed.
  • More drivers have been added to carry the same amount of freight.
  • 82.5% of the drivers reported a negative impact on their quality of life and increased fatigue.
  • Lost wages have totaled $1.6 – 3.9 billion (on an annualized basis).

Even the Wall Street Journal has gotten into the act, with an article following a driver through a trip which is made more difficult by the new rules, while yielding less pay. Over the road drivers are paid by the mile, and in this case driving miles were reduced by about 1500 per week.

And of course, all this is going on while we already are experiencing a driver shortage which will surely increase as the economy improves. Something has to give. Either the rules should be changed so a driver can log more miles, or the pay per mile must increase. Both these options have significant downsides, however. More miles could mean increased fatigue and more accidents, and increased pay will lead to increased rates. The latter option seems to be the most reasonable, although it no doubt would meet with strenuous shipper resistence.

Impact of HOS Still Unclear

by Cliff Lynch
22. August 2013 10:52

Impact of Hours of Service Still Unclear

The long awaited revisions to the trucker hours of service rules became effective July 1, and the industry is watching closely to see what impact they will have on drivers, carriers, and shippers. FTR Associates has predicted that the changes will result in a shortage of 60,000 drivers, or 3% of capacity. If this comes to pass, carrier rates are almost certain to increase.

After only one month it is difficult to gauge the impact, but both ATA and FTR reported slight decreases in volume. Both indices fell slightly which no doubt negated any effect of the new rules. Class 8 truck orders also declined 7% from June. But looking ahead, it seems clear that any significant improvement in the economy or truck volume will cause problems. Keep in mind also; there is more to the driver shortage than HOS. CSA 2010 has also taken a toll on drivers and carriers, plus when the economy improves, drivers jump ship for higher paying, more "family friendly" jobs.

Already, driver turnover for the first quarter of 2013 was 97%; and as the economy improves, it will be necessary to pay more for competent, trained drivers.

For shippers, alternatives to truck transportation are few and far between. Some are able to switch to intermodal (which continues to be the fastest growing mode) but trucks are still the mainstay of the transportation industry, hauling almost 69% of total tonnage. ATA predicts this will rise to almost 71% by 2024 when truckers will also capture 81% of revenues. Most carriers are making significant efforts to improve the quality of life for drivers; but in the final analysis, it will be primarily about salary – increased salary to be precise.

In the final analysis, one thing is very clear. There will be no way to escape higher capacity related truck rates.

CFL
8/21/13

Keep on Trucking

by Cliff Lynch
2. April 2013 08:00

Keep on Trucking

There is a continuing stream of press about the shortage of over-the-road truck drivers in the country today. Right now, the shortage is estimated at 125,000 fewer drivers than are necessary to meet demand. According to the Department of Labor and FTR Associates, this shortage will more than double by the end of 2013, the largest deficit in nine years. In 2012, turnover averaged 98% at the large carriers and 82% at the smaller operations.

Depending on which side of the fence you are sitting, the shortage is blamed on such things as CSA 2010 activity, reduced hours-of-service rules, and traffic delays caused by infrastructure. However, the most recent data shows that the average salary for an over-the-road driver in 2011 was $39,830. This is not exactly an overwhelming amount when you consider the hours, working conditions, bad food, and the impact on personal and family life. If the economy continues to improve, I suspect even more drivers will turn to other occupations where they can make an increased salary and be more like normal people.

While some carriers are trying to deal with the salary situation, it will take an industry-wide effort to make a significant impact. The carriers must be prepared to face cost increases; but more importantly, shippers must recognize that to get the service they need, they must pay more.

Bipartisan proposal may settle Keystone XL pipeline debate

by Marly Hazen McQuillen
1. April 2013 06:15

On March 22, the US Senate issued a symbolic endorsement of the Keystone XL pipeline, which would deliver crude oil extracted from Canadian tar sands to refineries in Texas. Proponents of the pipeline claim that it would provide US jobs and might lower the cost of gasoline.

Environmental groups have vocally opposed Keystone XL, asking President Obama to reject the proposed expansion of the Keystone Pipeline. On Wednesday, an estimated 1,000 demonstrators are expected to protest the pipeline during the president's fundraising trip to San Francisco.

Recently, many in Congress have expressed a desire to move past party lines. A growing group of Representatives now insists that a bipartisan solution is simple: Transport the oil without building a pipeline.

Eco-friendly alternative to pipeline construction

According to Rep. Elena Escarrà (D-CO), a member of the Natural Resources Committee, the most eco-friendly answer is to "upcycle" existing infrastructure, namely, the nation's largest waterway.

The proposal calls for the crude oil to be poured directly into the Mississippi River, where the current would carry it to collection stations in Illinois and Louisiana. Because oil floats, it can be skimmed without disturbing the river's ecosystem, asserted Escarrà. "Organisms living in the river will begin the process of digesting the crude. This extra step will provide us with cleaner oil at a lower cost."

More details of the proposed bill, nicknamed "Oil and Waterway" by several media outlets, are expected to surface later today. The unorthodox proposal is already receiving tweets of support as legislators from both parties rush to cosponsor the promising piece of legislation.

Rep. Glen Wilborne (R-IA), a member of the Committee on Transportation and Infrastructure, emphasized potential benefits for other areas of the logistics industry. "At its current depths, the Mississippi River is a rusty machine. Once we've oiled its surface, our barges will float with ease," said Wilborne. Consequently, dredging could be postponed "until actually needed."

Sustainable job creation

Calming the tide of environmentalist concern is only half the battle. How does the proposal stack up, jobwise?

Oil and Waterway proposes to create jobs to construct and operate the two oil collection centers. However, critics claim that the proposal could fall short of Keystone XL's job creation potential.

A spokesperson for the proposed bill says that its job creation would be driven by the transportation industry. The bulk of the new jobs would be added to deliver the collected oil to refineries in Texas.

Because no new pipeline will be built, Oil and Waterway proposes to bring the oil by tank trucks. One legislator reasoned that this pipeline-alternative proposal would create many new jobs for truckers, some of whom may have lost jobs in the aftermath of the Recession. "We pledge to end the truck driver job shortage," said Rep. Kelly McCroy (R-OH).

Editor's Note: Happy April Fool's Day!

Satirical post foreshadows industry technology

by Marly Hazen McQuillen
22. March 2013 12:32

Long-time readers of The Link may recall last year's April Fool's Day post: Truck driver shortage officially over. I had a little fun with this prankster holiday, describing how three (non-existent) trucking companies were dealing with the growing shortage of available truck drivers.

One of these (rhetorical) carriers addressed the problem by adopting a system of "Remote Tractor Operation," recruiting users from online video games to operate tractor-trailers from home and incentivizing good driving with digital badges.

The tongue-in-cheek post outlined potential controversies:

As veteran industry commentator Buck Carville noted, "Many of these remote 'drivers' have never been behind the wheel of a rig." Many have expressed concern that the position of vehicle operator will complicate industry regulations, ultimately leading to a revision of CSA rules. Others assert that because no one is driving these trucks, the FMCSA would have no authority to define operator hours of service or whether an operator would be allowed to use multiple monitors to control multiple vehicles.

Since publishing that post, projects such as Google's driverless cars have gained traction in the news, and Florida and California have joined Nevada in passing laws approving driverless cars.

We may wish to describe this passenger transport system as passive driving, as the person in the driver's seat is not relieved of all responsibilities; for example, Nevada stipulates that the person behind the wheel "may not 'drive' drunk." Beyond potential for consumer use, there has been little debate in the US over the commercial potential of driverless or passive-driving vehicles.

In Japan, a prototype of a truly driverless operation of freight trucks is undergoing testing. On February 25, NEDO, Japan's largest public R&D organization, demonstrated a convoy of four tractor-trailers, which was an update of the three-vehicle convoy it unveiled in 2010. These vehicles, which would not be guided remotely by human operators, can communicate with each other within 20 milliseconds. NEDO plans to have a driverless transport system functioning by 2020.

As new transportation models test a shift from active driving (the current system) to passive and even driverless driving, how do you think the supply chain industry will be affected?


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