Tag: transportation

4 Ways the Transportation Industry is Addressing the Truck Driver Shortage

The transportation industry was short some 80,000 drivers by the end of last year, according to American Trucking Associations (ATA) Chief Economist, Bob Costello. Already at an all-time high, Costello believes the shortage of truck drivers could reach 160,000 by 2030. His sentiments are echoed throughout the trucking industry.

It’s not just a problem for the transportation industry, though. Trucking alone is responsible for moving more than 70 percent of all freight in the United States, per ATA reports. The trucker shortage is impacting the overall cost of goods and has the potential to halt commerce in its tracks.

What is Causing the Truck Driver Shortage Issues?

More than half the shortage of drivers can be attributed to retirement, according to the National Transportation Institute (NTI). Its representatives say the average age of a commercial truck driver is 54, and new entrants are 38. The industry isn’t attracting younger drivers, which many attribute to a reputation issue with the industry. The scarcity of drivers entering the field simply isn’t enough to make up for those leaving and increased demand.

The root of the issue, however, isn’t as clear-cut. Some cite difficult or downright unsafe working conditions and low pay. Others point to the pandemic and note that training and licensing programs reduced capacity or shut down during the early months of COVID-19.

Still, some contend there isn’t actually a driver shortage. “We’ve seen that what economists would call a reallocation of drivers,” Jason Miller, associate professor of supply-chain management at Michigan State University, explained to Business Insider. He believes that truckers simply moved to smaller transportation companies, became owner-operators, or moved to short-haul.

Challenges Due to Driver Shortage

The majority of truck drivers are inching towards their fifties and find it hard to keep up with the growing demand. This predicament often culminates in a high turnover rate. When coupled with extended working hours, the trucking profession can venture into the realm of unsafe occupations due to the potential for exhaustion and fatigue-induced accidents.

The root of this truck driver shortage is multifaceted. The impending retirement of a substantial segment of the workforce is a significant contributor, and unfortunately, there’s a shortage of young drivers entering the profession to fill the impending vacuum. Further complicating matters, the trucking industry’s competitive nature often leads recruiters to prioritize hiring seasoned drivers, creating an entry barrier for those new to the field. Other obstacles that exacerbate the shortage include stringent regulatory and safety standards, the repercussions of the COVID-19 pandemic, and a noticeable gender imbalance in the industry.

4 Ways the Transportation Industry is Addressing the Truck Driver Shortage

With so many causes and potential causes for the truck driver shortage, a multi-pronged approach is being used across the industry.

1. Improving Truck Driver Wages and Conditions

The median annual wage for heavy and tractor-trailer truck drivers was $45,260 in 2019, according to the U.S. Bureau of Labor Statistics (BLS). Truck driver wages climbed to $47,130 in 2020, with many reports that drivers received raises three to five times last year.

But, pay is only one part of the equation. Drivers often spend weeks away from home jutting across the country. Restrictions on hours, set to combat fatigue behind the wheel, all-too-often leave truckers with the decision as to whether they want to stop at the nearest grimy rest stop simply because it has guaranteed overnight parking that will allow them to catch a few restless winks, or press forward to the next stop that may be nicer, but could leave them stranded on the shoulder overnight due to insufficient space.

To combat this, many companies are switching to a hub and spoke system. Similar to the way airlines work with connecting flights, the hub and spoke system has truckers following a single path from a home hub to one that may only be a few hundred miles away, allowing for more work/life balance and precious nights and weekends at home.

2. Introducing Apprenticeships and Lowering the Truck Driving Age Limit

Truckers 18 and up have historically been allowed to drive big rigs in most states, but federal law has prevented them from crossing state lines. However, the Federal Motor Carrier Safety Administration (FMCSA) recently established the Safe Driver Apprenticeship Pilot Program (SDAP) to help address this. Under the three-year program, those 18-20 with an intrastate commercial driver’s license will be able to cross state lines, provided they meet specific criteria, the FMCSA reports.

Many states, such as New York, are easing restrictions on younger drivers as well. The new legislation will allow those 18 and up the opportunity to earn a CDL Class A through a specialized training program, something once reserved for those ages 21 and older, ABC News reports.

These initiatives will make it easier for trucking firms to recruit younger drivers straight out of high school, but it could take years before they provide any real relief.

3. Diversification: More Women and Minorities in Trucking

Moving beyond age, the industry is working to improve diversity on the whole. Greater efforts are being made to recruit female truckers, who presently only account for 6.6 percent of truck drivers, and minorities, who comprise just over 40 percent of drivers per the ATA. Calls are also being made to attract other underrepresented groups, such as veterans. Others, like C.H. Robinson, believe the solution lies in attracting more immigrants to the profession, CNBC reports.

4. Leveraging Technology for the Trucking Industry

When the word “automation” creeps into discussions about the transportation industry, driverless trucks are the first thing that comes to mind. They may be part of the overall truck driver shortage solution as technology improves, but it overlooks one huge problem truckers face: driver detention. While there isn’t accurate or complete data as to how long drivers wait, particularly since it isn’t often tracked unless the length exceeds contractual obligations, around one in ten stops for loading and unloading exceeds two hours, and the average detention time is an additional 1.4 hours according to the FMCSA.

The agency’s big discovery is that crashes rise exponentially as detention time increases. However, its study notes that these delays result in net income reductions of up to $302.9 million annually, which amounts to more than $1,500 for a for-hire each year. It doesn’t even touch on reduced downtime or increased stress and expense.

Through automation and leveraging technology to optimize the shipping and receiving process, the transportation industry can reduce dwell and detention times significantly, thus making the field a safer, more hospitable place to be.

Boost Your Trucking Business with Transportation Factoring Companies

Whether you run a trucking company or operate an established company, maintaining healthy cash flow is key to success. Cash in hand means you have the fuel to take on an extra load, cover maintenance costs, or even add to your fleet, but it isn’t always possible to operate this way when it takes 60 or more days to get paid. With transportation factoring from Charter Capital, you can get paid for your load right away and even get a fuel card that can help save money too. To learn more, request a complimentary rate quote.

April 14, 2022
Was 2019 Just a Pothole for Trucking? Or Something More?

Was 2019 Just a Pothole for Trucking? Or Something More?

Nearly 800 trucking companies failed in 2019, taking almost 25,000 trucks out of the industry’s capacity. Is this a sign of things to come? Or is it an overdue correction?

Celadon Group, by far, represented the biggest name to fall last year when it filed for bankruptcy in December 2019. The Indianapolis-based trucking firm’s demise was the largest in industry history. No surprise, as Celadon was one of America’s 10 biggest trucking outfits at the time. When it closed, more than 2,800 drivers hit the road not with a load to deliver, but a pink slip. Another 1,300 support staffers also lost their jobs.

Ten months earlier, New England Motor Freight shuttered, putting its nearly 1,500 truckers out of work. The company blamed labor costs, excessive regulation, toll increases and insurance rates for its decision to close. Other major carriers that went bust in 2019 included New England Motor Freight, HVH Transportation, Cold Carriers, Falcon Transport and LME.

To be fair, trucking had a banner year in 2018, so anything less than a repeat performance was bound to be a disappointment. A downturn may have even been inevitable. Some believe, even with a driver shortage, there was simply too much capacity in the market. When demand slipped a little in early 2019, it didn’t take much for companies operating with razor-thin margins and little room for error to crack.

But even big companies are hurting. Such industry stalwarts as J.B. Hunt, Knight-Swift and Schneider have revised their outlooks downward. This comes amid news that freight volumes have dropped since reaching a high for 2019 last May. The Cass Freight Index shows shipments in December 2019 at a low last seen in February 2016.

It sure seems like things are bleak. But is this grim view justified?

The United States has entered new trade deals with Canada, Mexico and China. The latter agreement puts an end to a trade cold war between the two giants that has had markets on edge. These trade deals could now spark new demand for equipment, machinery and consumer goods, all of which would absorb excess trucking capacity. Combined with the weaker trucking firms going out of business in 2019, reducing the number of rigs available, rates and revenues should increase, helping boost the industry overall.

No one can predict the future with absolute certainty. While there’s a lot of glum faces in trucking today, there are indicators that better times could be just around the corner. You just have to look for them. Keep in mind that bad news almost always makes for better headlines and generates more clicks. Sometimes you have to read between the lines to get the clearest picture of what lies ahead. Two facts are certain in good times and in bad: Things need to be transported and there’s no more popular or efficient way of getting goods from place to place than trucking.

Is your trucking company currently struggling with cash flow waiting for the turnaround to begin? Do you need the funds presently tied up in outstanding invoices? There is a solution available now. This solution lets you keep on trucking with invoices paid and cash flow problems now in the rearview mirror.

It’s called invoice factoring. With this type of alternative business funding, the factoring company advances you funds in exchange for your accounts receivable invoices. The factoring company pays you right away for your outstanding invoices and takes care of collecting on them from that point forward, freeing you of the troublesome and time-consuming chore.

Invoice factoring is also quick – you can usually get paid within just a day or two instead of waiting the usual 30, 60, 90 days or more. Utilize invoice factoring as often as needed to keep your cash flow running as smoothly as your fleet on a wide-open, traffic-free road. Invoice factoring is a convenient alternative to traditional bank loans or fee-laden online loans. To learn more about how factoring companies work, simply call toll-free 1-877-960-1818

February 4, 2020
Female Drivers Revolutionizing the Trucking Industry

Female Drivers : The next time a semi tractor-trailer truck picks up or drops off a load at your dock, you may well encounter a woman behind the wheel. Once almost exclusively the bastion of men, the trucking industry is now welcoming more and more women.

The profession has seen a 68 percent increase in the number of female truck drivers between 2010 and 2018, according to the American Trucking Association. More than 234,000 women were employed driving trucks last year, the association said. This represents just 6.2 percent of all drivers (3.5 million total), but the trend is on an upward slope.

Equal pay was a main reason more women were getting behind the wheel. Truck drivers earned a median yearly salary of $44,500 in 2017, according to the Bureau of Labor Statistics. This is higher than several traditionally women-dominated careers such as office administration ($38,990), healthcare support ($32,380) and food preparation ($25,580).

Female Drivers Revolutionizing the Trucking Industry

Driver shortages and retention problems have been plaguing trucking firms in recent years, with an estimated 60,000 driving jobs unfilled at the beginning of 2019. That number is expected to grow to nearly 175,000 by 2026. Companies desperate for more gear jammers to meet increasing customer demand aren’t eager to turn away willing, qualified candidates, no matter their sex.

As a female driver from Missouri, Deb La Bree, summed up in a Fox News story: “The steering wheel knows no gender.”

Several changes in the trucking industry have made it easier for women to enter. For example, new truck transmissions are easier to operate and are less grueling to use over a long-distance haul. In addition, truck drivers are no longer required to unload their cargo at their destination.

“New technology and equipment make truck driving a job that’s more geared toward women,” said Lindsey Othmer, a truck driver in Fife, Washington, in a recent Wall Street Journal article on the growing number of female truckers.

Rebekah Koon explains in a recent Fox News story, “I don’t think it’s all about the pay. I can say, on a personal level, that I actually just really enjoy the trucking… I enjoy the people I meet and the sights I see. I also know that the pay was a definite benefit,” she admitted.

Besides equal pay, what are some other reasons more women are jumping in the cab?

“I like being on my own and making my own decisions about how I’m going to get the job done,” driver Lanelle Devlin tells CNBC’s program Make It.

Margo Mitchell of Schneider says on her company’s website that she was born to be a trucker. “My dad raised me to be a driver,” she recalls. “He saw a God-given talent. At 15, I pointed at a tractor-trailer and asked if he thought I could drive one of those. He looked me in the eye and said, ‘You’re a Mitchell. You can drive anything.’ I started studying for my CDL before I even had a permit to drive a car.”

Schneider has a dedicated page devoted to telling women what it’s like to be a female driver for the company. Schneider driver Toni Thomas gives this advice: “Women shouldn’t be afraid to get out of the norm. I think driving can make a woman feel empowered. I also believe that women are safer drivers because they aren’t afraid to ask questions, ask for help and are willing to learn.”

In the 1970s, the Virginia Slims cigarette brand ran an iconic advertising campaign congratulating women on their progress in the business, political and social worlds. “You’ve come a long way,” the ads proclaimed. Today, not only have they come a long way, but they’re going even farther, often behind the wheel of a big rig on the open highway.

November 19, 2019
The 21st Century Trucker is as Much a Digital Jockey as a Road One

Citizens’ band radios (CBs) were once all the rage in the 1970s trucking industry. The handy communications device truck drivers once used to stay in touch with each other on long cross-country trips became a sudden trend. This was thanks to a popular culture that romanticized the stoic trucker and the freedom of the road. Hit songs such as “Convoy,” blockbuster movies like “Smokey and the Bandit” and TV shows such as “Movin’ On” fueled the hype. Regular folks began buying the sets and installing them in their cars and pickups. They dreamed of being Burt Reynolds and Jerry Reed trying to evade Sheriff Buford Justice and make the big delivery on time.

What many a daydreamer didn’t realize is that being a trucker is more than “Eastbound and Down.” It’s a hard life spent on lonely highways and in greasy diners, far from family and friends. Being a trucker takes a special breed, one that becomes accustomed to the hours of service it takes for their long hauls. This adds to truckers’ near-mythical standard in modern American culture and leads to instant understanding and camaraderie amongst their select group.

Today, the CB radio fad has long since faded. Few of the would-be Bandits of the ‘70s remember their long ago “handles” or what “10-100” even meant. But truckers still go on riding the highways, just not quite as they did in 1976 at the height of the CB craze. Lots of new rules and regulations govern the amount of time they can be behind the wheel. A driver shortage has helped lift their pay as demand for truckers exceeds supply. That’s not the only thing that’s made a trucker’s life easier today than when “Breaker, Breaker” was showing in theaters. Digital technology has turned a generation of highway jockeys into Web surfers and app junkies, and that’s been a big boon for everyone.

A trucker spends a lot of time in the cab. Innovations, new technology, and applications can now turn that cab from a place to not only control the vehicle but to also run an office. Things that once had to be done by hand or manually back at headquarters – such as logs, trip sheets, delivery reports, etc. – can now be more effectively handled directly from the truck itself by the driver. Many of these devices operate via voice command, ensuring the driver can keep his or her eyes on the road and hands on the wheel.

Apps boost driver safety in other ways. Phone and Web apps enable drivers to quickly alert the main office of truck problems, show where to get help when needed, and provide diagnostic information to speed any repairs. Other truck-mounted electronic devices relay vital safety information to the driver, such as cameras, sensors, blind-spot warning and collision avoidance systems.

Data drives the trucking business today as much as Peterbilt or Mack. Thanks to digital technology, artificial intelligence and specialized programs, truckers can quickly determine how to make each delivery more efficient and productive. GPS trackers monitor rig locations, making dispatching easier and timelier than before. Such technology especially aids the small, independent trucker, making them more competitive with the big carriers in a way never possible before. The more efficient their operations, the better they can cut down on waste and boost their bottom line.

Finally, digital technology has aided truckers and trucking companies in recruitment and retention of employees. In an era of driver shortages, the last thing a carrier big or small needs is to not have personnel available to make deliveries. This costs the company money and potential future business. Apps have been developed that function like job boards once did at interstate truck jobs. This gives drivers instant information on what loads are out there and who is hiring. Cledus Snow depended on Bandit and his Trans Am driving far in front as blocker, and CB radio for key information on his run from Texarkana to Georgia. Today’s trucker, meanwhile, has an array of electronic and digital tools at his or her fingertips that can indicate where the next truck stop is located, the truck’s fuel efficiency, tire pressure and how many hours have been logged. Whether eastbound and down, westbound or any direction in between, it’s a new, better road from the 21st century trucker.

July 12, 2019
Texas’ Strong Economy, Pro-Business Attitude Make It a Top State for Truckers

Keep on truckin’. That’s the message the Lone Star State sends over-the-road owner-operators looking to make it big in the transportation and logistics business.

In 2016, more than 3,000 trucking industry professionals throughout the U.S. were surveyed to determine the best and worst states to own and drive a truck. The survey revealed Tennessee as the nation’s best for truckers, with California “raking the leaves” at the back end of the convoy.

The survey factored several items to determine its rankings. These included cost of overnight parking, fees/regulations, if location in the U.S. mattered, and how friendly states were to drivers. Texas finished a solid fourth in the best state’s derby. Were there to be another survey, it’s likely the state could finish higher thanks to the state’s “put the hammer down” pro-business attitude and economy.

Texas benefits from a strong economic base that often booms when times are good and weathers slow times better than the rest of the nation. This creates and sustains demand for consumer and industrial goods and products, goods and products that must be transported over the road. Small trucking companies have plenty of opportunities to compete for these loads, even outfits new to the market. In addition, Texas is home to three of the nation’s largest cities and one of America’s biggest ports. It’s no surprise that Texas cities ranked among the Top 10 in several freight transportation categories in a 2018 trucking survey by DAT Solutions.

The Lone Star State also has a business-friendly agenda. This means fewer laws and regulations that add to costs, sap cash reserves and make doing business harder. These include complex labor and environmental laws that can be burdensome for trucking companies of all sizes, but smaller ones in particular.

In 2018, Texas won CNBC’s annual Top State for Business in America award. It was the fourth time Texas has won top prize in the award’s 12-year existence. Texas Gov. Greg Abbott explains:

“When given the freedom to aspire, Texans risk their own capital and invest in themselves and others by opening businesses large and small. And success is contagious. New business formation in Texas is at a five-year high. Start-ups are growing here right alongside Fortune 500 companies and more than 2.6 million small businesses. It’s no surprise that Texas is ranked by CEOs as the best state for doing business, now for the 14th year in a row. As one Texas entrepreneur puts it: ‘If you like big ideas … build your business in Texas.’”

Meanwhile, Texas placed third in a similar Forbes magazine survey of best states for business.

Texas’ low business taxes and lack of an income tax make it an attractive place to open a business of any size. It’s a top state in terms of access to the capital a business like a trucking outfit needs to expand and grow.

Texas is a big place with tens of thousands of miles of highways. The state has invested heavily in infrastructure and roads in both rural and urban areas. Better and less congested roads make a trucker’s job easier.

Whether you’re eastbound and down, westbound or any other direction, Texas should rank high on your list of places to locate a trucking firm.

Once you’ve set up shop in the Lone Star State, you may find you need to add employees, buy new equipment or improve your cash flow. If so, consider invoice factoring. Invoice factoring allows you to “sell” your accounts receivable invoices to a factoring company. The factoring company pays you upfront for outstanding invoices, giving you the cash you need today to run your business, and eliminating the worry and hassle of slow pay collections, leaving you free to run your business. Invoice factoring is a convenient alternative to a traditional bank loan or fee-laden online loans and risky crowdfunding. Each of these sources require a long-term contract. Factoring, however, gives you the money you need when you need it with no long-term obligations. You can also get cash quicker through invoice factoring – usually within a day or two. If you would like to learn more about how invoice factoring works and how it can put your cash flow into the fast lane, simply call toll-free 1-877-960-1818 or email [email protected].

May 6, 2019
Trucking Industry Holds Great Promise and Poses Great Challenges for Smaller Operators

Trucking industry great promise for small operators: Back in the 1970s, there was an inescapable popular saying you could find plastered all over t-shirts, posters, bumper stickers, and even as part of a Billboard chart-topping song. “Keep on Truckin’!” The saying certainly reflected the times. Truckers were greatly admired. They were seen as a hard-working, independent breed ready for endless adventure on the wide-open highways of America. What little boy didn’t want to be like Burt Reynolds or Jerry Reed in one of the greatest all-time trucker movies, “Smoky and the Bandit”?

Fast-forward 40 years, and little has changed. Trucking remains as popular as ever in the public lore. For those who like the solitude and the call of the road, there’s no better time to drive a big rig. If you’re one of those people who has always dreamed of “putting the hammer down,” this may be a suitable time for you to fulfill that desire with your own small trucking firm. Or then again, it may not be, depending on which side of the wheel you sit.

The good? According to the American Trucking Associations (ATA), trucking is high-balling it towards the greatest era in its storied history. ATA president and CEO Bill Graves says he “see(s) no scenario, no outcome on the horizon that is anything but great for this industry.” The ATA is robustly predicting overall industry revenue will jump 72 percent by 2022 and tonnage moved will climb nearly 24 percent in that same timeframe. Truckload volume, meanwhile, will grow 3.5% a year through 2019.

The ATA reported an all-time high in trucking tonnage hauled in February 2016. Other market research studies have indicated that higher demand and ever-rising shipments could create a capacity crunch down the road. This crunch could pave the way for those wanting to enter the industry. Indeed, one report trumpeted that small independent trucking firms are among the nation’s fastest-growing small businesses.

Sounds great, right? Throttle down and take your foot off the accelerator for a second. Before you shift into high gear, lasso up some friends and start your own convoy down the Interstate in search of trucking riches, a few other important things need to be considered.

The Advantages of Small Trucking Companies

Small trucking companies and owner-operators are carving out their own path to success, armed with a deep understanding of the pros and cons of operating on a smaller scale. Despite facing challenges such as navigating supply chain issues and balancing start-up costs, these entities enjoy distinct advantages over their larger counterparts. The freedom to choose types of freight, coupled with the personal touch they can offer in the supply chain, sets them apart in a crowded market. For those dreaming of a career in the trucking industry, becoming an owner-operator within a smaller trucking company not only provides a more intimate driving experience but also opens doors to a variety of trucking jobs that might not be available in larger firms.

With an emphasis on quality over quantity, small trucking firms are adept at offering customized solutions to shippers, ensuring that even the most specialized freight requirements are met with precision and care. This flexibility extends to their operation model as well, where drivers and owner-operators often enjoy more leeway in choosing their routes, thereby improving job satisfaction and work-life balance. Additionally, smaller companies may offer more attractive packages for drivers, including competitive wages, vacation time, and even life insurance options, addressing one of the industry’s biggest hurdles: driver recruitment and retention.

However, the journey for small trucking companies is not without its bumps. The initial start-up costs, license fees, and the need for a safety team are significant considerations. Yet, for many, the advantages of running a smaller operation—such as closer relationships with clients and a greater sense of ownership and independence—outweigh these challenges. In an era where the impersonal nature of large corporations can be a turnoff for both employees and clients, the personalized service offered by smaller carriers becomes a compelling selling point.

As the trucking industry continues to evolve, the role of small trucking companies and owner-operators will be pivotal. Their ability to adapt quickly to changing market conditions, coupled with their commitment to providing personalized service, positions them well to navigate the highways of opportunity. For entrepreneurs and career seekers alike, the small trucking sector is great ground for growth, innovation, and success, proving that in the world of trucking, size does not always dictate capability.

Trucking Industry, a Few Other Important Things Need to Be Considered.

First off, the trucking industry is undergoing a number of regulatory changes. The new regulations may put a brake on trucking’s headlong rush towards a new golden age. These include stricter limits on the number of hours a driver may be behind the wheel per day and per week. A number of governmental entities are also considering more and stricter health exams for commercial drivers, who have to sit for long periods, making them more susceptible to health problems.

So not only can drivers be behind the wheel for a shorter time, reducing productivity and profits (both for the company and the driver), but there are fewer drivers than ever. A massive driver shortage has stymied practically all haulers, big and small, with rapid turnover rates common as drivers continually jump for more lucrative offers from the competition. Not enough new drivers are entering the industry and today’s drivers are rapidly aging, creating even more significant shortages. Industry watchers speculate that the trucking industry will have to hire 89,000 new drivers every year just to keep pace.

That means wages are rising to entice people into the cab. That’s great news for drivers but not so welcome for company owners trying to fulfill more and more orders.

Finally, new technology is having a big impact on trucking. Companies slow to embrace new technologies are finding they are increasingly less efficient and are becoming roadkill for faster, more nimble haulers who swallow them in a convoy of mergers and acquisitions.

So as you can see, the road ahead for the trucking industry has some great opportunities in terms of increasing demand for service, Still, there are also several potholes to dodge in terms of finding and keeping drivers. One effective solution for small trucking companies is freight bill factoring. By working with a freight bill factoring company, trucking businesses can convert their unpaid invoices into immediate cash, ensuring steady cash flow and the ability to meet operational needs without waiting for customer payments. If you’re a small business entrepreneur looking for a new challenge, trucking could be a lucrative path to prosperity, provided you have a firm grip on the wheel, gear your expectations accordingly and carefully map out your route.

June 7, 2016