Despite a spate of profitable earnings reports from trucking companies large and small, the continuing shortage of truck drivers is still constraining the industry’s ability to sustain enough growth to keep up with freight demand.
“The continuing shortage of qualified drivers caused both a decline in [truck] utilization and a reduction in our fleet size of 129 tractors compared to the second quarter last year,” said Kirk Thompson, president & CEO of Lowell, AR-based J.B. Hunt Transportation Services.
However, he stressed that the company’s truckload operations maintained good operating profit in the second quarter this year – despite significantly higher fuel prices and that worsening driver shortage – primarily because freight rates continue to rise.
“Rates from our consistent shippers improved by 5.6 cents per mile or some 4%, while rates from unplanned activity (spot pricing and paid deadhead) improved 29 cents per mile or 15% compared to the second quarter of 2005,” Thompson noted. “That rise in pricing for unplanned activity reflects a strengthening in [freight] demand.”
“We were able to raise prices for our services by 3.6% per mile during the second quarter—strengthening our belief that there continues to be more freight demand, albeit softer than a year ago, in the truckload market than available tractor capacity,” said Robert Powell, chairman & CEO of Van Buren, AR-based carrier USA Truck.
“That imbalance is characterized by a growing shortage of qualified drivers over the past several years,” he added. “We’re one of only a few publicly held truckload carriers that added significant tractor capacity to our fleet in recent years – expanding our average number of tractors by 7.6% to 2,514 in the second quarter – but while we’ve been successful at growing the fleet, it’s become increasingly expensive to recruit, retain and compensate the high-quality drivers required to man those tractors.”
Consequently, Powell said USA Truck’s costs in those areas increased by 1.5 percentage points of base revenue during the second quarter this year.
For those reasons, finding and keeping drivers for the rest of 2006 will be the top priority for most trucking carriers, said Patrick Quinn, co-chairman of Chattanooga, TN-based U.S. Xpress Enterprises.
“Looking forward, for the remainder of the year we are expecting a solid freight demand environment … along with constrained capacity growth in the truckload market due to a very tight driver market,” he said.
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