Trucking Updates: Costs Rise as Driver Shortage Tightens With No End in Sight

Driver Shortage: 

According to the American Trucking Associations, the industry is short nearly 63,000 drivers with that number expanding to over 270,000 for the entire Class 8 truck market according to FTR Transportation Intelligence.(1,2)  Capacity tightened this year with enforcement of the ELD mandate in April and is expected to worsen by 2020 when carriers must comply with the online driver drug testing database.(3) Within the next 10 years, the industry is expected to be short 890,000 drivers.(4)

DRIVE-Safe Act: 

With the average truck driver being 49 years old, it’s no surprise that there is a hard press on recruitment efforts focusing towards the younger generation.  The Developing Responsible Individuals for a Vibrant Economy Act (DRIVE-Safe Act) was introduced to Congress back in March, seeking to lower the driving age for interstate transport from 21 to 18.  Under this act, the driver would not only have to meet CDL requirements, but also complete a two-step program which includes a minimum of 400 hours of on-duty time, 240 hours of behind the wheel with an experienced driver present, have safety technology installed on the truck, and “demonstrate core competencies in driving and maneuvering skills” before they can travel interstate without supervision.(4)                                                                                            

Trucks and Technicians Hard to Find as Rates Rise:

With drivers in demand, carriers are increasing driver pay in an effort to recruit and maintain employees, raising pays by 15-18% from 2013 to 2017 and escalating even higher this year.  Additionally, the cost of insurance for carriers has doubled, with premiums that used to average $6000-$7000 reaching highs of $20,000, ranking insurance as a carrier’s largest increase in operational costs.(5)  Not only that, but technician costs are also on the rise (that is if you can find one who is available) along with truck prices, which John Kearney, CEO of Advanced Training Systems, notes is in part due to the high technology embedded in them, and even so, demand/backlog is so high that carriers can’t expect to be in possession of a new truck for at least 9 months.(5)  As expected, increasing costs of doing business are driving spot rates as well.  Read more at Fuel, Labor, Equipment and Healthcare Are All Driving Up Trucking Costs.

Infrastructure:

The American Trucking Associations’ John Kearney believes that the “$1 trillion federal infrastructure spending plan proposed by President Trump will pass in 2019” and along with it, a $0.20/gallon fuel tax increase over a four year period to help pay for it.(1)

Hours-of-Service:

The Federal Motor Carrier Safety Administration is seeking comments on potentially revising the hours-of-service regulations. Read the Notice of Proposed Rulemaking here.  The deadline to comment is Sept. 24.

Stay tuned to roadscholar.com as we bring you the latest in industry news.

 

(1)https://www.trucks.com/2018/08/20/ata-president-spear-5-top-issues-trucking/

(2)https://www.gobytrucknews.com/driver-shortage-constrains-economy/123

(3)http://www.palletenterprise.com/view_article/5176/Coming-into-Focus:-Economy,-Other-Factors-Put-Pressure-on-Trucking

(4)https://www.foodsafetymagazine.com/enewsletter/drive-safe-act-can-help-keep-food-moving-across-americae28099s-highwayssafely/

(5)https://markets.businessinsider.com/news/stocks/ats-insurance-technology-driving-up-costs-for-trucking-industry-1027505610