Fleet owners are busy trying to run their businesses and often spend their days putting out fires and focusing on the day-to-day details of operating a trucking company. While it’s easy to get caught up in the whirlwind of running a business, industry leaders report they worry about some of the top big-picture issues. We looked at the results of two pieces of research designed to identify the most pressing concerns of fleet owners as they navigate through the next quarter.
According to Commercial Carrier Journal’s July 2016 Market Pulse report, driver availability is the number one concern of the 200 senior executives of for-hire trucking companies. And they are not alone. Talk to almost any fleet owner, and you will hear that finding drivers is a big concern. A report issued by the American Trucking Associations pegs the current driver shortage at 48,000, a number that is projected to increase to 175,000 by 2024. Ranked near driver recruiting is driver retention. Driver turnover rates continue to be much higher than turnover for other industries, which add costs for recruiting and training.
Speaking at the 2016 FTR Conference, Noel Perry, FTR economist for the transportation intelligence company, said the combination of electronic logging devices, greenhouse gas emissions standards and an increase in fuel costs could “push the trucking industry into a full- fledged capacity crisis as soon at late next year.” Confirmation of that can be seen in the behavior of some shippers as relayed by one of the participants in the CCJ Market Pulse report who said, “We are experiencing an increased Request For Proposal environment during the summer months which typically is experienced during 4Q. I feel this is due to the shipping community preparing for tighter capacity in 2017 because of several issues including: government regulations, increased labor costs and increased equipment and insurance costs.” Some think the shipping community is trying to not only lock in prices for 2017 and into 2018 but also ensure their goods get shipped.
Infrastructure and congestion
There is a real concern about the cost of congestion, especially with the additional pressure of HOS rules. According to ATRI (American Transportation Research Institute, a group which conducts trucking industry related research), congestion on U.S. highways cost the industry $49.6 billion dollars in 2014. The estimates come from factoring 728 million hours of lost productivity while trucks idle in traffic. That works out to nearly 264,500 commercial drivers sitting idle for an entire year. While Congress continues to toss infrastructure costs back and forth, the costs continue to mount.
A whopping 61 percent of the executives in the CCJ report said business in July 2016 was worse than in July 2015. As one respondent said, “There is no consistency in freight volume from week to week or even day to day some weeks.”
Among the ATRI respondents, worries about their Compliance, Safety and Accountability scores showed up as the second most pressing concern. There is ongoing worry that the Behavioral Analysis and Safety Improvement Categories (BASIC) used to judge fleets are not good predictors of a carrier’s crash risk. Another issue is uneven enforcement by various states as well as disparities in reporting CSA scores.
The U.S. economy continues to grow at a very slow pace, but is weighed down by an overvalued U.S. dollar, a growing trade deficit, high retail inventories and sinking commodity prices, says Dan Meckstroth, economist at Manufacturers Alliance for Productivity and Innovation, speaking at the 2016 FTR Conference. He thinks those factors are enough to push the economy into a recession. But even if that does not happen, Noel Perry says, “Late in recovery cycles, transportation tends to perform below the level of GDP.” His advice: “Don’t bet the farm on growth unless you’re ready to steal market share from competitors.”
Hours of service
While the 34-hour restart provision in HOS rules has been suspended, fleet owners are still concerned over its possible reinstatement pending FMCSA’s release of the results of its second field study, according to ATRI’s Critical Issues in the Trucking Industry report. A majority of fleets want to see the suspension of the restart provision continued until there is proof of the economic and safety benefits of the rule.
Tied closely to HOS, “The growing scarcity of available truck parking creates a dangerous situation for truck drivers who are often forced to drive beyond allowable HOS rules or park in undesignated and, in many cases, unsafe locations,” the ATRI report said. Some fleets are reporting productivity losses: When looking for a legal place to park, 39 percent of drivers said they spent more than one hour and 83 percent said they took longer than 30 minutes doing so, according to a group that is seeking funding for a Regional Truck Parking Information Management System. Put in monetary terms according to a study, “Taking the roughly $120 per hour operational cost of truck and applying it across the nearly 400,000 national parking events that occur on a daily basis, the economic cost of 83 percent of drivers spending 30 minutes or more each day looking to find parking is over $7 billion annually.”