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Trucking growing pains

May 26, 2006
Trucking experts who contend there’s a “growing but slowing” trend affecting the industry point too what’s putting the brakes on growth—the driver shortage in the near term and highway congestion over the long term

Trucking experts who contend there’s a “growing but slowing” trend affecting the industry point to what’s putting the brakes on growth—the driver shortage in the near term and highway congestion over the long term.

As to drivers, Thomas Finkbiner, chairman of the Intermodal Transportation Institute at the University of Denver and president & CEO of Tampa, FL-based bulk transporter Quality Distribution, believes large and small for-hire carriers alike are finding the perfect balance between driver lifestyle issues and controlling operating costs, allowing them to stay prosperous.

“There’s no doubt about it. The need to attract drivers and buy more expensive trucks due to the new emission control technology is going to divert capital normally used in other parts of the trucking business,” Finkbiner told FleetOwner.

“The driver issue is complicated because there aren’t many people looking for trucking jobs, largely because underlying unemployment figures are so low,” he explained. “In the LTL side of the industry, the shortage isn’t as huge because the lifestyle issues are better– most of those drivers are home every day. So I expect to see a serious expansion on the part of the LTL guys ahead.”

Additionally, more restrictive hours-of-service rules, an aging driver population, and more highway congestionare also creating higher “input costs” for truckload fleets, said Finkbiner. Yet continued strong economic growth coupled with capacity shortages—directly impacted by the lack of drivers— have propped up profitability to a degree.

“That means the pricing environment is going to stay strong – ‘core capacity’ is frozen solid to a degree because fleets can’t expand and I expect it to get tighter in both the truckload and rail markets,” he explained. “And rail can’t expand nearly as fast as trucking as it’s a far more capital-intensive business. So while inputs are going up, for sure, we’re also looking at a pretty solid business situation for good carriers.”

In the long run, the big hitch could be the dated transportation infrastructure in the United States, says John Bowe, president of the Americas for global transportation firm APL and its sister company APL Logistics.

“The U.S. economy has been transformed by unprecedented growth in containerized imports,” Bowe said in a recent speech at the annual “Innovations in Transportation” symposium held at the Massachusetts Institute of Technology. “Growth in the transportation infrastructure hasn’t kept pace. If we don’t fix this, supply chains will bog down, consumer prices will go up and the economy will suffer,” he stressed.

Solving this issue requires public-private collaboration on a national freight policy, significant new investment in the U.S. rail and road networks; plus increased productivity at U.S. ports.

“We’ve worked with shippers on temporary solutions,” Bowe said. “But there’ll come a time in the not-too-distant future when even these measures won’t be enough. We’re pushing too much cargo through a pipeline that is not growing fast enough. Eventually it will be overwhelmed. We need to act now to prevent gridlock.”

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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