North American Transportation Survey 2018 by Transporeon

Tank truck on the road

For the past few years, Transporeon Group has queried its extensive network of North American carriers on the state of the industry in order to gather insights on the issues that carriers are facing and how they see the transportation market evolving.

Shippers and carriers alike are currently being challenged by driver shortages and tight capacity. Due to the strong economy—in combination with the growth of e-commerce orders, high driver turnover rates (at 90 percent or more) and the fact that many current truck drivers are retiring—it is estimated that the U.S. needs 60,000 drivers this year to meet the growing demand for trucking services. Some reports say that this number may triple by 2026.

As the largest global collaborative network connecting shippers and carriers, the Transporeon Group periodically surveys its base of more than 3,000 North American carriers to see how market forces are shaping trucking businesses today. Regarding the current capacity outlook, one carrier states that, “the market demands are extraordinarily high. I have never witnessed shipping demand side such as this in the years of owning my business.” Several carriers mentioned that demand for their services has grown by nearly 20% in 2018.

So what are carriers doing to address capacity?

“There is a difference between what I would plan to do and what is realistic to do,” states one carrier. “I would love to add capacity to our fleet but am unable to do so because of the driver shortage. So, my plan would be to add capacity; however, executing on that plan is much more difficult, and it is far more likely our capacity stays the same or even possibly contracts/reduces.”

Most carriers realize that, because capacity has tightened so dramatically, they must raise rates in order to buy more trucks or to hire more drivers. Drivers are also demanding higher pay and better working conditions, which can also drive up pricing.

“More and more drivers are becoming owner/operators and know there is a high shortage of drivers,” responds one carrier from the survey, “making it possible for them to reject loads at cheaper rates.”

Another carrier describes the capacity and price situation in the current market: “Capacity is tight and we have customers cold calling us to haul. We have long-term customers offering even higher rates just to cover more freight for them.”

“While there is a driver shortage, truck drivers are putting their foot down and demanding higher pay,” states one carrier. “No longer can we look at it as rate per mile, but instead we have to look at cost of goods and the driver’s time/livelihood.”

Salaries for professional truck drivers have dropped 21% when adjusted for inflation since 1980, according to a recent analysis. Historically, drivers have made up the difference by working longer hours, which is no longer possible due to the electronic logging device (ELD) mandate.

Taking carrier feedback and the current tight capacity market into consideration, the Transporeon Group recommends that shippers should plan to launch a formal RFP as soon as possible in order to secure the capacity needed to maintain customer service levels in the coming year.

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