Anyone in the logistics industry will know about and/or have experienced the current trucking shortage crisis plaguing the United States. Even prior to the implementation of the ELD mandate in December, it was already proving to be a problem. Now, with the ELD mandate restricting truck driver’s road time, the shortage has been exacerbated and as a result, trucking spot rates have soared and shippers are finding themselves with one hand tied behind their backs.

Thankfully, rate increases have not been all that significant compared to what they could be, and it’s still some distance from that point -- for now. Rates aside, logistical operations in the country have also taken a hit.

For us at iContainers, the main issue has been the additional workload that goes into finding coverage for all our truck movements. Just over the past couple of weeks alone, we’ve had several cases where truckers have confirmed that a load was good to go in the morning only for us to find out, literally just hours later, that they weren’t able to cover our move anymore. In some of these cases, the drivers may simply have decided to take on another load that’s more profitable. In large parts of the country, most truckers are reporting fully booked two to three weeks out.

Keep in mind that a lot of drivers are independent owner operators. Even though they’re contracted to one trucking company, they can easily jump ship or reject carrying a load as they wish if they’re able to find something that pays better or simply because they don’t want to. And the increasing demand for their services means they now have more options and have more say in what they want or, in this case, do not want to do.

Workarounds

Dispatchers often have to negotiate with the drivers to get them to work the loads that the trucking company have already committed itself to. In these cases, a driver who gets a relatively low revenue load today may be promised with a higher revenue one tomorrow and the day after. Given the rut we’re in now, this may be the only way to get the relatively lower mileage moves done. But this only works if you have high revenue loads on hand you can promise to truck drivers. Now, what happens if you only have short- to mid-range mileage loads?

The issue with a short- to mid-range loads is that the time taken to retrieve the container and return it is just as long for a long-range road. Throw in the waiting time while the container is being loaded and unloaded, and with a little simple math you’ll realize that these short- and mid-range loads simply do not compensate all these waiting around. And with the ELD regulations, the driver’s driving time could now also expire before he can even return the container, which essentially means he’s sacrificing one potential load to manage these short- and mid-term loads.

What we’re seeing more of these days is that many truckers have started to do local runs where one driver is solely dedicated to just bringing containers from the port to the trucker yard all day. This saves the other drivers the wait time, but it adds a lot more administration for the truckers. Some truckers have been working with such a setup for many years now. But others are starting to look at this as a sort of solution.

For the exporter, this means they have to push up their load dates to allow for at least one additional day for the container to be delivered to the port. This, in turn, adds an extra chassis day to their cost.

How do we solve this in the short term?

Unfortunately, with no easy solution on the horizon, this problem will still probably last a while. I reckon the worst is yet to come and things will not get any better until we hit that beckoning low point. The problem the industry has been facing is the fewer number of new qualified drivers joining. And the current pressure on the market will continue in order to facilitate an industry-wide rate increase.

In the short run, importers and exporters should prepare themselves to see more delays and rate increases than we’re currently seeing. Expect to lose a driver at any time. We’ve seen cases of losing up to three loads a week due to drivers bailing on us at the last minute. And what all this really boils down to is importers and exporters paying more to secure the drivers. Shippers should prepare to ship only what’s necessary or be prepared to fork out for exorbitant prices.

When routing cargo, exporters should also start consider other options. It may now be more reliable to route your cargo via a port with a smoother gating process. Though it may be more costly having to truck the container farther, you may win in the long run by avoiding delays and the additional corresponding fees.

Some may also choose to start working with trucking companies where the drivers are company drivers and the trucks are owned by the company to avoid worry about an independent owner operator jumping ship on loads. Of course, not all owner operators are likely to do that and I’d hate to give them an unfair reputation here but it needs to be recognized that this is something that happens. For the general importer/exporter, it is crucial to build a good relationship with a steady trucker which may help with minimizing the level on a local level.

On the other side of the coin, trucking companies overall should do a better job taking care of their good drivers. Better pay is obviously the easy short-term solution but the trick will be to find a good setup that leaves the business viable and the drivers content. Solutions such as having someone run the round trip to the ports can alleviate some temporary congestion. But this is an issue that the ports also should be addressing as some may need to review their gating process to speed up the turnaround of getting the drivers in and out. Perhaps an adapted solution similar to the setup at Los Angeles and Long Beach where they’re open to receive at night would help. That way, you won’t have all the truckers going in and out in a compacted eight hour window.



