You may have heard about KFC running out of chicken in the UK.  Unlike Chipotle's earlier problems here in the US the concern wasn't food-safety, it was pure logistics.  A new carrier (DHL) wasn't making the deliveries on time.  That got me thinking about trucking here in the US and the shortage of truck drivers we are experiencing.

 

A Shortage of Drivers

In the US about 70% of the nation's freight moves via truck.  However as Bloomberg reports the US is Running Out of Truckers.

Companies have been highlighting freight constraints in their fourth-quarter earnings calls as being responsible for higher operating costs and lower profit margins. Hershey noted that their adjusted gross margin fell by 180 basis points in part because of higher freight costs... Food service company Sysco noted the same.

NPR touched on the driver shortage earlier in the year

According to an industry analysis by DAT Solutions, just one truck was available for every 12 loads needing to be shipped at the start of 2018, which is the lowest ratio since 2005 ... An aging fleet of drivers is one of the main reasons for the driver shortage. The Bureau of Labor Statistics estimates that the average age of a commercial truck driver in the U.S. is 55 years old.

On top of this new electronic regulations have tightened restrictions while put addtional burdens on the drivers to learn computerized logging technology.

So what can you do to help your business in the short and long term?

  • Think Local
    The era of cheap freight is over.  Focus on sourcing and selling locally to reduce your own use of freight.
  • Incentivize New Drivers
    Cost for CDL Classes can range from $3,000 to $7,000.  Consider incentives for employees interested in acquiring a CDL.
  • Prepare for Higher Freight Costs
    Review your purchasing and receiving processes.  Ensure that you would be able to notice and react to a freight cost change quickly enough to prevent selling product at a loss.
  • Invest in Accuracy
    Delivery errors waste already limited resources.  Electronic delivery confirmation and sigature capture prevent problems before the truck pulls away saving drivers time and you money.

 

Please share your thoughts with me, This email address is being protected from spambots. You need JavaScript enabled to view it..

 

 



Issue 621 - Don't Get Political

Like our subject says we won’t get political, but in my reading I came across an excellent article about the ICE (Immigration and Customs Enforcement) raid on a plant in Morristown, Tennessee. We have spoken about this before in reference to The Liabilities of Undocumented Labor?  That was 10 years ago, some things never change.

Read more ...