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CTA Chief: Driver Shortage a Drag on Economy

The professional truck driver shortage continues to hold back the Canadian economy and solutions require a new approach to immigration policies and rethinking how long-haul freight is moved throughout the supply chain, Canadian Trucking Alliance president Stephen Laskowski told attendees at Newcom’s annual Surface Transportation Summit.

As reported by Today’s Trucking, Laskowski referred to lines of trucks parked against yard fences along nearby Dixie Rd in Toronto, pointing out they are not idled because of a lack of freight service demand, but lack of truck drivers. And, he added, the situation is expected to intensify as the trucking industry comes to terms with “massive” retirement numbers over the next five to six years.

Scott Smith, president JD Smith said the shortage is affecting growth. While the company is investing in replacement equipment, it’s not expanding the fleet. The focus, he explained, is ensuring the fleet charges the right rates and continues to be seen as an employer of choice in a tight labor market.

While 2018 was a “good year”, JD Smith certainly felt the personnel-based constraints on growth, Smith said. Gone are the days when the business could simply reach out to find warehouse and fleet workers with ease. “It really has been a significant impact on discipline for the quality of the labor.”

The capacity crunch is expected to worsen in the coming years as the workforce grows older and freight demand increases, says David Ross, Stifel Financial’s research managing director – global transportation and logistics.

The average driver in the U.S. is somewhere between 52 and 57 years old, added “That’s older than it used to be, and next year it’s going to be older than it is today.” Historically, the number of drivers has been evenly split between those under 35, those 35-50, and those over 50. In the last decade the demographics have shifted. Today just 20% of drivers are under 35, with the two older groups evenly splitting the rest, he said.

Stifel’s Ross expects truckload rates to rise 5-10% in 2019, excluding fuel. Even though he sees LTL rates moderating against the backdrop of a cooling manufacturing sector, they’re still projected to rise just under 5% in 2019.

Small fleets appear to be the most likely to realize the gains, with their revenue up 1.2% year over year in the U.S. truckload sector, Ross said. In contrast, large fleets with revenues above US $30 million have seen revenue drop 0.5%.

But there is certainly business to be had for those who can combine the trucks and drivers.

Shippers looking for other strategies to control costs will want to consider modal changes, longer contracts, guaranteed volumes, wider delivery windows, and even offering coffee and bathroom facilities for company drivers, Ross said. Collaborating with carriers and even other shippers can help, too.

“We’re looking for solutions on how to contain our costs,” said Belmont Meats president and CEO Paul Roach. He stressed that his company recognizes the challenges of limited labor and tighter capacity, but is looking for ways to fill trucks more effectively.

Laskowski emphasized the need to monitor the technologies that are changing the supply chain.

“If you’re not changing, you’re not growing.”

Full Today’s Trucking story here.

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