7/6/2015 2:42:00 PM
HEADLINES
Almjeld to NFDA: Driver Shortage to Up Trucking Costs
Be prepared for trucking rates increases as much as 35%, Chad Almjeld of Logistics Planning Services warned the National Fastener Distributors Association.
“Five years ago the problem was fuel costs,” Almjeld recalled. “Now the trucking industry issue is driver shortage.”
The Council of Supply Chain Management Professionals estimate that one is six drivers is at least 55 years old and fewer young people are entering the industry.
The American Trucking Associations estimate the trucking industry has 1.7 million drivers and is already short between 20,000 and 30,000 drivers.
The Bureau of Labor Statistics projects more than 96,000 drivers will be needed over next 10 years.
Part of the shortage is a early 60’s life expectancy for truck drivers and three-quarters of drivers being obese. In addition, 87% suffer pre-hypertension or hypertension.
Drivers are overwhelming male: 94.6%. The average annual pay is $48,000.
The limited driver supply will force companies to pay higher driver wages. That is a switch from the situation with thousands of drivers lost their jobs or took pay cuts with the recession which started in 2008.
The upcoming driver shortage is part of the reason for talk about the Amazon’s drones. Drones are now on two-year temporary licenses to deliver everything from pizza to small fasteners.
Almjeld predicted same-day delivery will be a $90 billion industry within the next decade.
The University of North Dakota now has a bachelors degree in aeronautics with a major in Unmanned Aircraft Systems, Almjeld point out.
The trucking industry is challenged to meet regulations – including driver “Hours of Service” rules which impact productivity.
There will be more regulations in coming 10 years, Almjeld predicted.
More than 80% of trucking companies report they have lost productivity and almost half find that today it takes more drivers to haul the same amount of freight. Nearly 23% of companies have raised driver pay.
Saving as Trucking Costs Rise
Look for ways to limit the number of shipping days and convert to higher LTL volumes, Almjeld advised. “Instead of two or three pallets can you ship 8 to 12 at one time?” he asked.
“There are lots of efficiencies out there if you are looking at data,” Almjeld finds. “The amount of data being exchanged is ever-increasing.”
“Density-based pricing is coming within five years,” Almjeld predicted. That is a calculation of space + weight. “You are paying for air space,” he explained.
Canada and Mexico: “Choose a good customs broker,” was Almjeld’s top recommendation. “Allow extra time for border inspectio,” he added. “Have documents correct as you may have to pay warehousing costs while waiting for paperwork.”
Emphasize to receiving staff that the old 15-day deadline to submit claims has been reduced to five days.
For more information contact Chad Almjeld of Logistics Planning Services. Web: shiplps.com
Or the National Fastener Distributors Association. Web: nfda-fastener.org
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