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ATRI identifies Top 10 concerns in trucking

Posted: October 9, 2019 by James Menzies

SAN DIEGO, Calif. – For the third year in a row, the driver shortage topped the list of industry concerns, as compiled by the American Transportation Research Institute (ATRI).

But during a panel discussion dubbed The Big Reveal, at the American Trucking Associations (ATA) Management Conference & Exhibition, the association’s chief economist Bob Costello noted it’s really an over-the-road truckload problem. He said the driver shortage could reach 160,000 drivers by 2028, which would be catastrophic.

“I do not think we will get there,” he said. “If we do, not only is the industry in a world of hurt, so is our economy. There will be real shortages at stores and so forth.”

Other industry concerns ranked:

#2 – Hours-of-Service

Gary Helms, a professional driver with Covenant Transport and an America’s Road Team captain, said more flexibility is needed. Even more than the latest proposal from the Federal Motor Carrier Safety Administration is suggesting.

“We need more flexibility across the board in that 14-hour clock, that 11-hour (driving) clock, and in that 30-minute break,” he said.

James Reed, president and CEO of USA Truck, also supported giving drivers more control over their workday.

“I don’t have an issue with the idea of hours-of-service, but I think it’s high time we put it back in the hands of the professional driver,” he said. “They know best.”

#3 – Driver compensation

For the first time, driver compensation appeared on the survey of the trucking industry’s 10 biggest issues. Not surprisingly, it was voted the top issue by commercial truck drivers, and did not appear among the top 10 from motor carrier responses.

Costello noted it was interesting this issue made the list when pay packages were widely raised last year.

Reed said USA Truck saw about a 6.5% increase in driver wages, year-over-year. He noted drivers seem to be wanting to earn more, so they can work less while maintaining their lifestyle, rather than running more miles.

Helms, the driver representative, said “Would I like to make more money? Absolutely. Do I need to? No.”

He said respect and home time are just as important as compensation.

“I need to feel the job I’m doing is valued,” he said. “That it has worth, is valued to my company. I need to feel that to be content.”

Costello added take-home pay for drivers has not risen at the same pace as pay rates have, because drivers are getting more home time. Also, the average length of haul is decreasing so drivers are spending more time bumping docks and less running down the highway.

#4 – Detention time

Detention time appeared on the trucking industry’s list of top concerns for the first time this year. Reed said his company recently examined accessorial charges to customers and found they were all over the map. He also acknowledged a surplus of capacity now makes it difficult to address this issue with shippers.

He said USA Truck is using dwell time as a bargaining chip when negotiating rates with customers.

“We will price lanes differently based on dwell time characteristics and how they treat our drivers,” he said. “Most of our large customers want that feedback.”

Helms pointed out that even arriving early will get a driver sent away these days. But being 15 minutes late will also get a driver sent away.

Costello said if drivers could get an extra 250 miles per week due to faster loading/unloading times, it would add more than 10% to the trucking industry’s capacity.

#5 – Truck parking

Truck parking, or lack thereof, first appeared on the list in 2012 and has remained within the top 10 ever since. It is consistently higher among drivers than motor carrier respondents.

“The reason that motor carriers don’t rate this very high is most of them want that team freight and want that truck moving at all times so there’s no need for parking,” said Helms. He also said the problem is getting worse as parking is increasingly becoming a paid requirement.

But Costello said fleets do care about the issue, as drivers can drive more if they know there’s always going to be adequate parking available.

#6 – Driver retention

Driver retention went from the third issue last year, to the sixth this year. Costello said turnover is still quite elevated for truckload carriers, with a 89% turnover rate last year among them. He said a strong freight environment tends to elevate turnover, as carriers poach more aggressively from each other.

“When the economy gets good, fleets go out there in the truckload space and aggressively go after each others’ drivers. It creates this churn in the industry,” Costello said.

But while driver turnover is still near 90%, “Fleets, you’re doing a better job,” said Costello, adding the all-time high turnover rate was 136% in 2005.

He thinks driver turnover costs the industry as much as a billion dollars a year.

Reed thinks it costs upwards of $100,000 to replace a driver.

“We need to start looking at the root causes of these drivers leaving,” said Helms. “There’s a disconnect between their expectation and the reality of the job. We need to do a better job instructing these guys what the job entails, how to budget time and money, and how to live on the road.”

#7 – ELD mandate

It ranked as the industry’s top concern in 2016, but the electronic logging device (ELD) mandate has been slipping ever since, all the way to seventh spot this year. Helms said he no longer has an issue with using ELDs, even though he was initially resistant.

“The ELD’s not the problem, it’s the hours-of-service that’s the problem,” he said.

Reed said as the industry transitions to fully-compliant ELDs, it’s the larger fleets that were early to adopt electronic logs that will face the tougher transition in December. Many have been using automatic on-board recording devices and will have another transition ahead, while fleets that were using paper logs right up until the mandate likely went straight to compliant ELDs. However, he also said any disruption to capacity this year is likely to be a “ripple, and not a quake.”

#8 – CSA

Reed said CSA is still a concern, but there’s not much happening with the enforcement regime. He’s hopeful CSA reform won’t bring in new BASIC categories.

“Our customers still ask about it all the time, so it’s never going to go away in that respect,” he said of CSA.

#9 – Infrastructure and congestion

In 2016, traffic congestion cost the U.S. trucking industry US$74.5 billion, amounting to 1.2 billion hours of lost productivity or 425,533 commercial truck drivers sitting idle for an entire year.

Costello said government should be putting more money into infrastructure.

“This is the best government spending they can do,” he said. “It has a ripple effect through the economy.”

#10 – The economy

The economy slipped from the list of top industry concerns in 2017, but returned this year. Costello said there are a couple concerns he’s watching: the slowing of the economy in other parts of the world, and trade wars.

“If we can avoid disaster with those, we’re going back to trend growth,” he said. “I don’t see a recession around the corner.”

Costello noted contract freight rates are rising for truckload carriers. LTL is a little softer, and the spot market is reeling. Spot market volumes are down about 40% and rates down 15-20%.

“If a fleet is operating primarily in that spot market, they’re going to think it’s a much tougher economy than those getting freight mainly with contracts,” Costello said. During the first half of this year, bankruptcies have doubled compared to all of 2018, which Costello thinks will continue, mainly among those chasing spot market freight.

Reed said his view from the trenches is that capacity has come online “a bit irrationally, and made things kinda blah for truckers. Not fantastic, not terrible, just middle of the road.”

 

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