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Inflation, driver shortage big worries for TL carriers

March 15, 2011
SAN DIEGO. A variety of challenges are bedeviling the trucking industry these days, according to comments from executives at leading TL carriers here at the 2011 Truckload Carriers Assn. (TCA) Annual Convention
left to right: Todd Amen, president & CEO of ATBS; Kevin Knight, president & CEO of Knight Transportation; Robert Low, president and founder of Prime Inc.; Richard Stocking, president

SAN DIEGO. A variety of challenges are bedeviling the trucking industry these days, according to comments from executives at leading TL carriers here at the 2011 Truckload Carriers Assn. (TCA) Annual Convention. But the biggest worries they cite stems from rising inflationary pressures within the U.S. economy combined with a driver shortage that could be epic in proportion.

“We know it is coming; you can’t print this much money without something giving somewhere in the U.S. economy,” said Robert Low, president and founder of refrigerated carrier Prime Inc., in regards to inflation during the first day of TCA’s general session. “We feel it in commodity prices and we’re living it in our businesses, for the cost of trucks, fuel, and tires are all rising.”

“There’s just no question greater inflation is headed our way,” added Kevin Knight, president & CEO of Knight Transportation. “It gets our focus back to controlling our costs as best we can. But there are also many costs within our businesses we can’t control, such as fuel, and fuel prices are really out of control right now. Our challenge will be to talk with customers and explain how [inflation] impacts us, and that if we’re not healthy, we can’t generate the capacity they need for shipping their goods.”

“We’re very concerned about inflation right now,” echoed Richard Stocking, president & COO of Swift Transportation. “That’s why when we’re asking shippers for rate increases, we need it to deal with the rising cost pressures in our business. Providing the drivers and the [truck] capacity to haul the shipper’s freight is simply costing us more to provide.”

Prime’s Low also pointed out that the growing shortage of drivers is going to create a much bigger problem for the industry than it has in the past. Knight added that the driver shortage this time around also presents more complex problems.

“We’re trying to make the job better, but drivers today are earning less because they are driving fewer miles. That’s going to be a challenge for us,” he noted.

Drivers also now rank “home time” on the same level as pay, according to Swift’s Stocking, which is putting stress on operations to create more predictability from freight patterns that still, more often than not, remain unpredictable.

“Drivers tell us that want more predictability in their paychecks and their home time, which can be quite a challenge,” he said.

For irregular route TL carriers, the demand for home time means putting more drivers on what Prime’s Low called “suboptimal routes,” getting them home at the expense of a more efficient truck operation.

“That’s the price you pay for more home time and another reason why [freight] rate increases are necessary,” he explained. “But in the end, it does no good to get a rate increase if there are no drivers available to deliver loads safely and on time.”

That’s because the growing lack of drivers is partly due to a lack of interest in a career behind the wheel of an 18 wheeler, said Swift’s Stocking.

“If you have 10% unemployment but you still can’t find drivers, you know there’s a broader issue,” he said. “There’s been a big change in the employee [pool] we see today; we just aren’t raising kids today to be truck drivers.”

About the Author

Sean Kilcarr | Editor in Chief

Sean reports and comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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