Seventy-one percent of America’s freight and goods are successfully transferred and delivered thanks to trucks and truck drivers. Without these trucks and truck drivers, this massive percentage of America’s goods stop moving — some may even say “without trucks, America stops.”
Thankfully, we don’t see America’s trucking force ending anytime soon, but “trucks are harder to find and more expensive than ever” and there’s a definite increase in loads — namely e-commerce sales, which represented 49.4% of U.S. retail sales growth in 2017 and a 16% increase from 2016. So what happens when there’s an abundance of loads, but a limited number of trucks (and drivers) to move them? A capacity crisis.
What is the Trucking Capacity Crisis?
The trucking capacity crisis of 2017 and 2018 is the result of an abundance of loads paired with a shortage of trucks (capacity) to ship those loads. According to the American Trucking Association’s March 2018 reports, trends, and statistics, roughly 71% of our nation’s freight and goods are transferred and delivered via trucks, and each year that requires:
- 10.5 billion tons of freight.
- 3.6+ million heavy-duty Class 8 trucks.
- 3.5+ million truck drivers.
- 39 billion gallons of diesel fuel.
While this may seem like an ample amount of trucks and drivers, our industry’s current transportation capacity issues are proving otherwise. There simply aren’t enough trucks (or capacity) available to transport growing freight demands, as seen by “FTR Intel’s  estimate that trucking is at 95% of capacity.” In fact, today’s statistics are saying there are roughly seven to nine loads of freight for every one truck available (a vast increase from 2003 when there were seven trucks to every one load)!
In short, this lack of capacity is considered a “crisis” because:
- There’s no extra capacity available — logistic providers aren’t able to purchase or obtain extra capacity (as they were able to in the past).
- Freight prices are extremely competitive. Shippers risk paying higher rates, or they must be creative by finding carriers that have needs in the exact lane their freight is moving.
- Logistics providers are under intense scrutiny to manage it all.
How Did the Trucking Capacity Crunch Occur?
While the shortage of trucks and truck drivers, along with ever-increasing freight demands, are easy-to-peg reasons for the transportation capacity crisis, various logistic companies feel the following are other leading causes of the truck capacity crunch of 2017 and 2018:
- Fleet deterioration.
- Loss of truckers with CDLs.
- Poor economic conditions.
- Increasing government regulations.
- Lack of communication and proper cost analysis.
Possible Ways to Combat the Trucking Capacity Crisis
- Take advantage of availability (when you have it) by using freight matching technology! With freight matching technology, big data and predictive analysis help drivers find and secure capacity days in advance. Reducing deadhead is as simple as downloading GoLoad, the world’s first dynamic load matching engine (DLM), which works on a model that “inverts the brokerage and load board process,” says Ken Evans, chief executive of Konexial. “Instead of carriers having to search for loads, it sends relevant opportunities to carriers.” In essence, GoLoad uses location, hours, and economic factors — such as the rate the carrier or driver is looking for — to send relevant load matching opportunities directly to the smartphone app. In the end, GoLoad not only helps combat the trucking capacity crisis, but it can improve your bottom line. Learn more about our totally transparent freight matching technology, GoLoad, in the SlideShare: “GoLoad Dynamic Load Matching Combats Trucking Capacity Crisis” or contact Konexial.
- Hire more drivers. To keep up with current truck capacity demands, the trucking industry will need to hire, roughly, 898,000 new drivers over the next decade.
- Remain flexible. Shippers must be flexible in order to beat the competition for capacity. Keep products moving and make your operations more attractive (i.e. keep options open and provide advance notice whenever possible).
- Budget accordingly. Shippers should reexamine budgets, including: procurement, financing, planning, customer service, production facilities, distributions centers (owned or leased), vendors, and customers.
- Make excess demand easier for everyone. Build and maintain a strong network of committed carriers, and along with your broker friends, add a handful of reliable brokers that can work alongside your core carriers.
- Learn more at “Opinion: The 2017 Capacity Crisis: Past Lessons, Current Advice.”
ELDs + Freight Matching Tech Make Capacity Concerns a Thing of the Past
“Rather than limit capacity, as many believed the ELD rule would do, the technology seems to have put carriers in the driver’s seat by sharing the capacity they have available to shippers and 3pls days in advance. This new development could eliminate the time they spend searching for loads.”
If you are required to meet ELD compliance, why not do it with a tool that will help run your business and increase your profits? GoLoad is paired with the My20 ELD and app, which means a single tool can help you meet ELD compliance and find available loads. In addition, you’ll also receive turn-by-turn routing, fuel discounts, instant connectivity with shippers and 3pls, and more. Have a fleet? Be sure to check out our fleet management platform: My20 Tower.
The post Everything You Need to Know About the 2017-2018 Trucking Capacity Crisis appeared first on Konexial Blog.