Trucking Industry: Growth vs. Labor Problem
Even a slow order rate December could not prevent 2015 from crowning itself as the trailer industry’s best shipment year in history. According to “State of the Industry: U.S. Trailers” published by ACT Research Co., 2015 has bagged even higher sales than the previous record set in 1999.
Frank Maly, Director-CV Transportation Analysis and Research at ACT, commented on the issue that although the net trailer orders fell 31 percent month over month and 38 percent year over year, the solid order season continues into January as 2016 has started with the best order board in around 20 years.
With a fast growth in US economy, the equilibrium between truck capacity and freight demand has been thrown off balance; the demand for trailers is seeing a surge unmatched in history. Strong economic growth, however, is generally accompanied by higher transportation costs which will trouble the US shippers and might make them seek more innovative solutions for moving freight.
Despite large truck orders, the trucking industry is currently struggling tooth and nail to find and keep the truck drivers. The problem is low current shipping rates which do not allow decent salaries for the truck drivers. According to the president and CEO of Coyote Logistics, Jeff Silver, the solution to the trucking industry’s labor problem is not quick; it will take at least around four more years to get it attractive for young men to drive trucks. John G. Larkin, a managing director at equity research firm Stifel, while speaking at the NTFL event said that the real trick to hire a truck driver was to hunt a drug-free youth who failed to find a fulfilling career elsewhere.
From 2003 to 2014, Class 8 population grew only by 5% in contrast to 28% growth by US economy. According to ACT Research President Kenny Vieth, trucking industry is doing all that increased work with almost the same number of trucks.
Just in line with the conclusion of the survey of mid-market companies by GE Capital Transportation Finance conducted in the fourth quarter of 2014, the companies have ordered trailers more in 2015 than they had in 2014. While expanding, however, the trucking carriers are concerned about increasing their fleet only as much as the drivers they can find to seat them. The check will keep them from over-expanding. – See more at: http://truckernews.com/trucking-industry-growth-vs-labor-problem-p671-90.htm#sthash.VKnKOnSh.dpuf