Blessing in disguise?
Truckers often ask: “If there’s really a driver shortage, why are the shelves at Wal-Mart fully stocked?” Good question. For many shippers, the answer is: “Sure, products are getting where they need to go, but not as quickly as we’d like and certainly not as inexpensively as we’re used to.”
Trucking capacity is at a premium, mainly because carriers can’t get enough drivers to haul all the available freight. In a study conducted at the end of last year, nearly 90 percent of shippers said capacity was tight.
The situation has shippers gnashing their teeth in frustration. And who can blame them? They’re spoiled from years of trucks appearing at the snap of their fingers, and at bargain basement prices to boot.
But in late 2003, the tables turned. Suddenly carriers just didn’t have the trucks or the manpower to respond to every request for capacity. They started picking and choosing freight based on (gasp!) its profitability and how easy it was to get from point A to point B. Some have actually – no lie – turned down freight!
Can you believe it? And miraculous as it may seem, under the law of supply and demand, freight rates started increasing. Truckload revenue per mile this year climbed a whopping 13 percent over last.
So is there a driver shortage now? If you define a shortage as not having enough drivers to haul all available freight, then sure. The bigger question is whether that’s a bad thing. Shippers think it is, because they are finally paying a decent rate. For drivers and owner-operators, though, it’s a good thing. They are hot commodities, commanding increasingly more money.
Carriers should think it’s a good thing, too. With more freight out there than they can haul, carriers are itching to add capacity. In a September survey by Commercial Carrier Journal, 58 percent of fleet executives said they plan to grow their businesses in 2006: 81 percent by adding equipment, 57 percent by recruiting owner-operators.
About the only thing holding them back is the driver shortage. At a June investors’ conference, Russ Gerdin, president and CEO of Heartland Express, put it this way: “It seems to be a sickness within the truckload industry that we truckers have to haul all freight. It doesn’t make any difference if it pays.
“Without this driver shortage, I’m afraid we’d all be losing money because we would be hauling all the freight again. So to me, the driver shortage is a good deal.”
Amen, Russ. Long live the driver shortage. And the decent rates and higher wages that go with it.