Don’t Let the Truck Driver Shortage Hit Your Bottom Line

Supply Chain Supply Chain 20/20 TMS

Two years ago, American Trucking Associations was talking about a 50,000-person gap between the number of truck drivers currently working and the number of them needed to run the nation’s over-the-road (OTR) transportation network.

That gap has since widened and is expected to grow over the next few years.

In Who’s to Blame for the Trucker Shortage?, Wall Street Journal writer Lauren Weber writes about the industry’s 80-90% employee turnover levels (a number that fluctuates based on current shipment levels) and how that turnover impacts the trucking industry as a whole.

And in The Big Rig: Trucking and the Decline of the American Dream, Steve Viscelli points out that many of the 800,000-or-so long-haul truckload carrier drivers are classified as independent contractors, meaning they receive no benefits, and are often barely making ends meet.

“It’s brutal on your family, on your body, on your life.” Viscelli told SupplyChainDigest, noting that turnover at some carriers is 300 percent. In other words, those companies are hiring three people for one job over the course of a year.

Regardless of the root cause, the driver shortage directly impacts shippers’ bottom lines and is pushing them to rethink the way they approach transportation. As it gets even more difficult to secure significantly discounted freight rates, the push will become even stronger.

And because no one is jumping at the chance to become a truck driver these days, shippers can’t just rely on extra capacity and sharp negotiating tactics with carriers to lower their costs. Add in the fact that companies like Amazon continue to push the envelope on two-day and next-day delivery windows and transportation’s role in the end-to-end supply chain becomes more vital than ever.

So what’s the answer? As transportation costs continue to climb, shippers have to get more creative. They need to step out of the box and think of new ways to gain efficiencies, drive cost reductions, and offset larger issues like the driver shortage.

That’s where technology comes into the picture. By giving shippers high levels of visibility across their entire transportation networks—and connectivity among all partners—cloud-based Transportation Management Systems (TMS) are helping companies connect in one place to less-than-truckload, truckload, and parcel carriers; receive real-time quotes using direct carrier rates; and request and receive spot quotes using a single shipment management interface.

At the end of the day, freight is becoming more complicated and expensive just as technology is becoming more sophisticated and comprehensive. In the future, all companies will not only have solid visibility over their transportation operations, but also real-time connectivity with all of their stakeholders.

To compete effectively and offset challenges like the truck driver shortage, shippers will have to think beyond the “beat up carriers and get lower rates” mentality and leverage technology to work better, smarter, and faster in our changing logistics world.

Watch this video to see how easy it is to create LTL, TL and parcel shipments in Kuebix

Try Kuebix Freight Rate Calculator to get LTL Freight Rate

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