Resources

As with so most industries, the transportation and logistics industries are undergoing enormous changes. Between more frequent and increasingly smaller orders, rapidly changing technologies, and receivers’ demands for shorter lead times and delivery windows, shippers and carriers alike frequently find themselves scrambling to adapt. Amid these changes, few have been affected more than the less-than-truckload (LTL) carrier — trucking companies serving the transportation needs of smaller shippers or those whose orders do not require a full trailer. Let us take a look at 6 challenges LTL carriers currently face in today’s market.

1. LTL carriers fight higher costs.

Simply put, the cost of fuel, tolls, and wages for one truck making multiple stops is higher and less efficient than sending the entire load to one destination. In addition to higher costs, LTL carriers rarely either weigh out or cube out the trailer. Frequently, there is additional unused capacity in the trailer despite the best efforts of the LTL carrier.

2. LTL carriers also face fluctuating and unpredictable costs.

Due to a greater number of variables impacting less than truckload orders, LTL carriers have a difficult time predicting from week to week and month to month what their capacity needs will be, putting additional pressure on their overhead expenses. Yet the marketplace expects pricing to be consistent in order for LTL customers to know the transportation costs to build into their pricing.

3. Delivery windows are shrinking.

Due to increased shipping volumes and static receiving capacity at most of their receivers’ dock, LTL carriers face the increased challenge of having to wait for an open door at their destinations. When this occurs at any point in a multiple delivery load, drivers have difficulty meeting the remaining delivery appointments. This increases the risk of non-compliance in an environment where carriers are expected to meet tighter and tighter delivery windows.

4. LTL carriers face higher risks of damaged goods.

Logistically speaking, the more stops a carrier makes and the longer products sit in the trailer; the more likely product will be damaged due to shifting and/or crushing. Likewise, when an order passes through multiple LTL terminals on its way to its destination, the pallets face additional handling. Every time an order is handled it increases the risk of damage.

5. Longer transit times can cause backups both at the shipping and receiving points.

When LTL carriers cannot meet today’s delivery demands, it can result in higher inventories raw materials, work-in-process, and finished goods at the manufacturer’s plant or the distribution center. This will eventually impact the shipper’s or receiver’s bottom line, making LTL carriers a less attractive shipping option.

6. The above challenges result in faster rate hikes for LTL carriers.

Shipper pressure to maintain pricing, the rising costs of recruiting and retaining drivers, and the tightening windows of delivery appointments are putting pressure on the least efficient carriers to raise prices or get out of certain lanes or the LTL business altogether.

While these challenges are significant, they are not insurmountable. Shippers need to look for carriers with available capacity (drivers and equipment) who have a history in the lanes or region they need handled. Overcoming this requires looking for alternatives and/or new transportation models in order to compete. Many shippers are discovering third-party logistics (3PL) companies which may offer a number of options to address these challenges. To learn more about Colonial Cartage, contact us today.

Motor Carriers are facing an increasingly daunting challenge these days — namely, the challenge of employing enough truck drivers to transport their clients’ products. The shortage of available drivers has been an ongoing problem, but in recent years, the shortages have reached record highs nationwide. How can these companies improve their driver retention rates so they can produce better results? How can they attract more drivers and keep them happy in their jobs? Before we can answer these questions, we must understand why the shortages are happening in the first place.

The Challenges of Truck Driver Retention

Driving a truck for a living is a challenging job in and of itself, requiring long hours and frequently long periods away from home. Like anyone else, drivers are willing to face these conditions if they have sufficient incentive to do so. The driver shortage is forcing the industry to face the root causes of the shortage and create incentives to not just maintain the driver pool but to grow it. The following issues are common among truck drivers today:

• Despite the new regulations on hours of service and electronic logs, drivers are often pressured or feel the pressure to bend the rules to make tight deadlines to transport and deliver products. This creates an unsafe work environment.
• Inadequate pay and benefits. The median pay of truck drivers nationwide is just under $43,000 per year, according to the Bureau of Labor Statistics.
• Delays in loading and unloading even when the drivers are on time for their appointments creates a “no win” situation for drivers.
• The lifestyle is not as attractive to millennials and generation Z individuals as it was to their parents. Depending on the carrier and length of haul, driver do not have enough time home or time home with family.

Ways to Improve Driver Retention Rates

Understanding the problem more clearly, what are some solutions? Today, more carriers make a point of treating their drivers right, personally and professionally. Here are a few things Colonial Cartage is doing to keep good drivers and to attract new drivers :

1. Fair compensation and benefits. Drivers work hard. They should be paid fairly and provided a highly competitive benefits package. Colonial offers a highly attractive package for drivers that includes excellent pay, generous healthcare benefits for both the employee and his family, company-paid life insurance, paid vacation, retirement savings plans and more.
2. Reasonable expectations. Drivers should not be pressured into unsafe driving to meet deadlines. Colonial maintains a reasonable driving schedule that allows drivers to make appointments and still have time home.
3. Respect. Everyone wants to be respected. and treated respectfully. At Colonial, we recognize that without drivers, we do not have a business.

Learn more about driving careers with Colonial Cartage.

Autonomous vehicles are getting a lot of buzz in the logistics industry lately. Since Uber ran its first test of a self-driving beer truck on a Colorado highway just two years ago, new articles about self-driving cars and trucks are released every day. Autonomous trucks will supposedly transform logistics and make transportation safer by eliminating driver fatigue and error. But how realistic are these expectations? Are autonomous trucks really in our future? Ask the experts, and they will tell you it is only a matter of time. However, do not expect self-driving trucks to start filling the highways anytime soon. Autonomous technology has a lot of hurdles before it goes mainstream — and one of the biggest hurdles is liability.

More Questions than Answers

Why is liability such a factor in the evolution of self-driving technology? Simply put, manufacturers and end users alike have legitimate concerns that malfunctioning (or worse, hacked) equipment could cause product damage, property damage, injury, and death — and neither want to assume that liability, particularly the manufacturer. While the technology itself is moving forward rapidly, market release is not close because there are still too many unanswered questions. For instance:

• How well will automated trucks navigate through inclement weather conditions (i.e., rain, hail, sleet, snow, wind)? Most publicized testing done today has been in near perfect driving conditions.
• How will automated trucks be able to predict and anticipate the actions of other drivers?
• What happens if the technology gets hacked? How secure are the navigational and communications systems against cyberattacks?
• What happens if a part fails (e.g., a blown tire or dropped axle), causing a crisis condition?
• And perhaps, most importantly, who will be financially responsible when something goes wrong?

Until these and other questions are answered, liability will remain the largest hurdle before automated vehicles become a reality on our roadways.

Warehouse Automation Will Come First

While still on the horizon for most carriers, warehouse automation has found its place in the logistics industry before autonomous vehicles. The reason, partially, is reduced liability, but it’s more about the ability to control the technology and apply “fixes” while still operating. As with so many other emerging technologies, the emergence of autonomous trucks is a matter of “when,” not “if.” However, until the concerning issues of safety, adaptability, and liability are addressed, they may still be a decade or more down the road. To learn more about Colonial Cartage, please contact us today.

The transportation industry is facing a growing problem: a significant shortage of truck drivers. The New York Times reported in July that the truck driver shortage has hit a record deficit nationwide, with approximately 50,000 more drivers currently needed to meet the ongoing and increasing demands of a thriving economy. The Safety Resource Center reports the actual demand, not just openings, is enough to fill 120,000 driver positions. While this is by no means a new problem — the trucking industry has been struggling to employ enough drivers for some time — these numbers mark a potential tipping point that could have a ripple effect through the economy. Let us explore this issue and how these shortages are and will impact businesses in general.

Why the Shortage?

There are a variety of factors affecting the driver shortage, but they can generally be boiled down to two issues that go hand-in hand:

1. The job itself is physically challenging. Truck drivers work long hours. They are also frequently faced with shifting deadlines based on conditions at both pickup and delivery Safety can sometimes become an issue.
2. The pay is frequently inadequate. The Bureau of Labor Statistics places the median wage for truck drivers at $42,480 a year. There is more pressure to pay as much as $50,000-$70,000 for good drivers, but today, competitive freight rates do not have that type of margin to cover that level of driver compensation.
3. Truck driving as a profession can require long hours and extended time away from home.

A Ripple Effect

Over time, the driver shortage has had a cascading effect, impacting almost any business that either sells or uses physical products. For example:

• Delays in delivery can create scarcity and put upward pressure on prices for the products.
• Transportation costs also go up by creating additional though inefficient transport to make up for missed or short deliveries.
• An increasing number of companies (Walmart, for example) are insourcing their transportation, manning their own fleets, and paying very attractive wages to their own drivers rather than outsourcing to third-party logistics companies.
• Those outside carriers now face an even greater shortage with more drivers gravitating to the wages paid and operating model (drop and hook) by companies insourcing their logistics.
• …and the cycle continues.

Solutions

There are no easy answers to this ongoing problem, but thought leaders are working on ways to alleviate the truck driver shortage. Some possibilities that may help:

• Easing of government restrictions that make drivers’ jobs more difficult or make the entry points too steep. The federal government is considering, for example, reducing the driving age from 21 to 18 for interstate drivers.
• Working toward autonomous trucking. Self-driving trucks could theoretically reduce the demand for truck drivers. However, safe applications and insurance-related issues for this technology are still a long way off, so we do not anticipate seeing these trucks hitting the mainstream anytime soon.
• Since the above two possibilities are out of the hands of many companies, we believe the best options is to create greater incentives for drivers, either in the form of higher pay, better benefits or working to change the appointment to delivery model.

While there are admittedly no instant solutions on the horizon for the national driver shortage, most progressive carriers are working multiple fronts to make sure they have the drivers required to legally and safely deliver their customers’ product in an expanding economy. Contact us today to learn more about how and why we are expanding our pool of drivers.