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Driver Shortage Tempers Optimism about Improving Market

The annual Truckload Carriers Association's conference was held on March 23rd through March 26th. While the majority of the news coming out of the conference was positive, there was a sense of worry regarding the issue of the truck driver shortage. This issue was the dominating topic of the meeting.

The outgoing TCA Chairman, Tom Kretsinger Jr., summed the issue up in the following statement. "This is the year of the driver. A couple of years ago, we would all say customer is No. 1. Well, today, driver is No. 1, driver No. 2, driver No.3, customer No. 4."

There are few sides to the driver shortage topic. A few of those issues are: the aging of the current driver market, the lack of new drivers entering the market, and the increasing requests for capacity. Each of these issues has a multitude of complexities that do not allow for a quick or simple solution.

There isn't too much that can be done about the aging of the current workforce. You obviously cannot stop the drivers from aging; they only thing a carrier can really do on this is to hope to retain their drivers. If carriers are able to make things easier on their drivers, they may find that some of the drivers will want to stay longer at their respective companies.

Not only is current driver age increasing, but tenure is decreasing at the same time. Average tenure has decreased to less than two years for male drivers and about one year, three months for female drivers.

The lack of new drivers willing to enter the field is of the most concern. Truly, there aren't too many things that are desirable about being a truck driver. Carriers will need to change this perception if they wish to recruit more drivers into the field. Things that can be done include: higher wages, avoiding long detention times, find ways to allow drivers to make a sufficient living but not be away from home all the time, and review the methods/target audience for these open job requests.

Shippers can also play a part in retaining/helping to lure new drivers into the fold. Simple things like cleaning up the path the driver takes to the dock, help drivers to avoid detention/extraneous loading times, and just overall give any and all possible support to your current drivers.

While this issue is extremely serious and must be addressed as soon as possible, it certainly is not too late. Just understanding the issues above is a step in the right direction. This issue cannot be avoided. The next steps in addressing the issue are hopefully coming. This will be a dominant discussion in Transportation for some time to come.

Feutsch, Michele. "Worries Over Driver Shortage Outweigh Improving Market." Transport Topics. 31 Mar. 2014. Web. 3 Apr. 2014

The Driver Shortage Is Here!

After years of talk of a pending driver shortage it may finally be upon us. At the recent NASSTTRAC conference in Orlando, FL the topic of the Driver Shortage was on everyone's mind. The driver shortage in many ways is already showing its effect in the truckload industry. While fuel has been at a relatively stagnant level costs continue to rise in the truckload sector due to lack of capacity. This lack of capacity has created serious demand for trucks in many lanes that are driving the cost per mile to historically high levels.

Looking at what is causing this driver shortage and capacity shortage there are many factors. First the industry lost 20% capacity during the downturn in 2008-2009 and that capacity lost has not been replaced. Financing has been scarce for many smaller carriers to replace or upgrade their fleets. Second FMCSA Regulations on safety have forced carriers to raise their qualification standards on the hiring of drivers to avoid liability issues. Lastly, the driver shortage is also hampered by a lack of desire of the youth of this country to want to become a truck driver.

In looking at this last issue it was discussed that the current workforce of truck drivers is aging and not in good health. The average age of America's drivers is in the mid 50's. Driver's average weight is 250 pounds and the life expectancy of a truck driver is 10-11 years shorter than the American average.

What are companies doing to combat this shortage? Many companies are offering higher salaries in the range of $60,000- $70,000 but higher salaries does not appear to be a great motivator. Companies need to find ways to recruit drivers that is different from their current or past ways of doing so. With unemployment at 6.8% one would think it would be easy to fill these jobs but the unemployed appear not willing to want these positions or are not qualified.

The ATA says we need 96,000 drivers each year to be added to the workforce to combat this driver shortage moving into the future. With just over 70% of the Americans consume being moved by truck we need to find ways to either fill these jobs or find alternative ways to ship our product. With all of this in mind one can expect costs to rise in both the LTL and TL markets as the driver shortage continues to take hold.

Bids: The Good, the Bad, and the Only

Providing Accurate Information will Streamline the Process

In today’s challenging and ever-changing business environment, the number of companies who decide to outsource their logistics and supply chain management is growing. Some of these companies are outsourcing for the first time; others are changing supply chain partners for a variety of reasons.

In either case, customers use RFPs to try to obtain an objective means of evaluating potential providers. They need solid proposals – and, often, they need them fast. Realistically, how long does it take to secure “good” bids? And what steps can be taken to streamline the process?

The time it takes will vary based on the complexity of the proposal as well as the availability of accurate information that can be used by prospective providers. For example, in complex situations, site visits will provide valuable insights (for example, about the management team, implementation approach, and all kinds of risk mitigation) that mere facts on paper won’t.

One of the most time-consuming activities in the bid process is analyzing the information on which the bid is based. Companies who provide accurate information at a summary level – instead of leaving the data analysis up to the 3PL provider - will enable providers who perform network modeling to do so more quickly. This suggests that reviewing and cleaning data before it is sent out to providers will save valuable time. One of the biggest obstacles to a “good” bid is basing it on incomplete or inaccurate information. In fact, it’s an operational or financial disaster waiting to happen.

Beyond good hard facts, agreeing upon assumptions and making a clear statement about what is to be achieved also will result in better bids and provide a level playing field for comparison.

The time allotted for response to a 3PL bid can realistically be between two and eight weeks, depending on the complexity. Larger projects that are more strategic in nature will take longer because data is not the only factor that should be considered. A truly successful relationship also should be based on a cultural alignment and a partnership approach that facilitates cooperation and communication. I’ll write more about this absolutely critical aspect of choosing a supply chain partner – and about evaluating the provider a company has now - in my next blog.

Six Questions to Assess Whether your Outsourcing Relationship is On Track

In my last blog (See Bids: The Good, the Bad, and the Only), I wrote about taking steps to make certain that RFPs are based on complete and accurate information. Surely, data is a key component of a “good” bid. But not every indicator of a successful supply chain partnership can be found on paper.

Choosing the right supply chain partner can be one of the most important business decisions a company can make in this environment of constant and unpredictable change. Exploring and understanding the culture of the two potential partners – as well as the management approach – is essential.

Companies also need to keep evaluating the relationship they have with their existing provider. In some cases, if the relationship is working well, the company may need to consider ONLY one proposal – from the partner that knows them best.

Successul supply chain management requires:

Here are some questions a company can ask about its current 3PL provider:

If the answer is “yes” to these questions, the partnership is on track. If the answer is no, seeking a better partner may not be a bad idea.

Agree or disagree with our expert’s perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the web site. Upon request, comments will be posted with the respondents name or company withheld.

Author: Ann Drake © Copyright Supply Chain Digest. April 7, 2008. All rights reserved.

NASSTRAC Carrier of the Year Award Winners

NASSTRAC recognizes annually transportation providers on a quantitative scale in five key areas: Customer Service, Operational Excellence, Pricing, Business Relationship, Leadership and Technology.

Simplified Logistics is pleased to congratulate our LTL carrier partners on their recent selection of NASSTRAC Carrier of the Year:

National Category - ABF Freight Systems
Multi-Regional Category - Old Dominion Freight Line & FedEx Freight (Tie)
Regional Northeast Category - New England Motor Freight
Regional Southeast Category - Southeastern Freight Lines
Regional Midwest Category - Dayton Freight Lines
Regional West Category - Dependable Highway Companies

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Carrier Profile - "Standard Forwarding"

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