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September 2014

Trucking bankruptcies to squeeze shippers

As operating costs such as driver pay rise and federal regulations cut into productivity, hundreds of trucking companies are shutting their doors each quarter. Although most of these companies are small, collectively they are as large as a multi-billion-dollar motor carrier.

In the first quarter of 2014, 390 carriers with 10,650 tractors shut down. Their combined fleet was bigger than that of Werner Enterprises, the third-largest U.S. truckload carrier, which operates 7,035 tractors.

Most of the trucking companies that fail are anonymous truckload operators, getting little or no mention in the media outside, perhaps, local newspapers. That's because most carriers operate fewer than 10 trucks.

Read more here.
Millennials aren't replacing aging boomers  

Baby boomers are aging out of the trucking industry, leaving a void that millennials are hesitating to fill. Upcoming ATA Chairman of the Board Duane Long, CEO of Raleigh-based trucking company, says he plans to change that.

"It's one of my greatest challenges and one of the things I intend to work the hardest at. I, myself, was recruited as a young person. I intend to make it part of my platform," says Long.

The gravity of the shortage won't be felt until it starts to take longer to receive online orders and when it gets harder to stock grocery store shelves.

Read more here.

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"If you've got it, a truck brought it." 

This used to be the trucking industry's marketing catchphrase for years.

But as trucks increasingly sit idle because of a growing shortage of drivers, the slogan might morph to:

"If you can't find it, there were no trucks to bring it."

The trucking industry suffers a shortage of drivers across the board, especially among long-haulers. According to the American Trucking Associations (ATA), the industry is about 30,000 short of qualified drivers. Over the next 10 years, that number is set to rise to 200,000.

The trucking industry is a vital component to economic growth, with trucks hauling 70% of all freight tonnage moved in the U.S. And as the economy continues to improve so does demand, which is good news for the industry and the economy, but there isn't enough capacity to keep up.

Experts cite other job alternatives that don't require being away from home for long stretches, the age requirement, cumbersome regulations and the demanding work schedule for fueling the shortage.
Capacity crunch changes relationships between carriers, shippers

Partnership. Collaboration. Shipper of Choice. These were the buzzwords at this week's FTR Transportation Conference as truck and rail providers, shippers and others discussed the current capacity crunch and what's ahead for the freight transportation industry.

What you are seeing is shorter and shorter deadhead runs, and higher and higher rates. That's mostly seen in the spot market - and for shippers who don't have good relationships with core brokers and carriers.

While rates are going up, they are generally going up more for shippers that "don't behave well," that are "transactional," said the panelists -- the ones who try to get the cheapest rates out there, who make drivers wait unreasonable amounts of time to load or unload, etc.

Analyst Donald Broughton noted that "the thing we're seeing widely happening is the discernment of 'I'm not going into that shipper because it will take too long to get loaded, or I'm not going into that receiver because it will take too long to get unloaded."

Read more here.
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