August 4, 2015
The trucking industry is without a doubt one of the most critical links in the American supply chain. Trucks account for fully 70 percent of all U.S. inland freight, according to the American Trucking Association (ATA).
Since the industry is a long way from being 100 percent dependent on what futurists envision will one day be roadways full of driverless, robotic vehicles, it will need a steady supply of capable human drivers well into the next decade to keep goods crisscrossing the country.
However, ATA’s latest research indicates the U.S. is currently short 30,000 truck drivers, and that’s just part of an increasingly alarming picture. ATA research also shows that 90 percent of carriers say they can’t find enough drivers who meet U.S. Department of Transportation criteria. On top of that, the turnover rate—the rate at which drivers leave the industry and are replaced—at large truckload carriers has in recent quarters been above 90 percent (although in 2005, the turnover rate was averaging as high as 130 percent).
ATA expects a potential shortfall of truck drivers to surge to 239,000 by 2022, and estimates that the industry will need on average 100,000 new drivers each year over the new decade to keep up. The current shortage of drivers is being blamed on everything from retirements to low pay as well as those drivers switching to other industries. And when truck drivers are dissatisfied, they tend to look for another line of work.
More Efficient Yard Management Leads to Better Contract Carrier Relationships
So what does the current shortage of truck drivers have to do with more effective yard management? As it turns out, quite a lot.
It all starts with drivers who despise experiencing any kind of delays, starting at the facility guard gate. Long-haul drivers especially want to get in and out of a warehouse yard quickly since they’re paid by the mile. They don’t like wasting time because that means less earning potential. Even though trucking companies charge warehouses detention fees, the truck drivers themselves will see only a small amount of that money, if any. Most of the money goes to the trucking company or the broker.
And to make matters worse, delays of 70-90 minutes at a busy warehouse gate—due especially to excessive traffic volume, associated bottlenecks and especially an inefficient approach to yard and dock management—can translate into companies and drivers even refusing to deliver to a particular warehouse.
To help augment a remedy, 4SIGHT Logistics Solution’s yard management system (YMS) can actually help get drivers in and out of a warehouse yard more quickly and efficiently. This, in turn, allows drivers to earn more money versus sitting idle for long periods of time. In addition, increased efficiency and a reduction in detention fees has a direct impact on fostering better relationships with contractor carriers, and will help warehouses negotiate from a stronger position since drivers are able to speed up the time they spend delivering their loads.
Increased Dropped Trailers Percentage Along With a Powerful YMS Means Cost Savings
For example, consider a company’s warehouse that predominately uses live drivers and a minimal use of dropped trailers. Relying on a high percentage of live drivers also means high inefficiency and unnecessary delays at the gate and the loading dock. And due to the current shortage of truck drivers—and the spot market inching up for live drivers to haul loads out of a company’s warehouse—that only adds significant amounts of money to operational costs.
In comparison, a powerful YMS could effectively allow that same company to realize a complete reversal in the way it operates its warehouse yard. Rather than relying on a high percentage of live drivers and only minimal dropped trailers, the company could instead achieve a tremendous increase in yard efficiency and reduced operating cost relying on minimal live drivers and a high percentage of dropped trailers.
As a result, the company could also realize a strong ROI based on its savings per trailer for every trailer that’s converted from a live load to a dropped trailer. This even includes the cost for any necessary yard trucks, employees and the YMS to run the improved yard operation. Of course, the company also needs strong contracts with its carriers to keep dropped trailers in its yard and specific results in cost savings will vary, depending on company size and other variables.
Obviously, the disparity between a sufficient number of truck drivers in the market versus a lack of drivers is clearly impacting the overall level of efficiency in warehouse yards across the U.S. If there were plenty of drivers in the market, this wouldn’t be happening. A higher supply of drivers would definitely translate into a cheaper spot market for live loads, but for right now and the foreseeable future, that’s simply not the case.