Truck Driver Supply Impacting Cargo Hauling Demand

Posted: Updated:

The U.S. unemployment rate has moved down to 3.9 percent, which is its lowest level since December 2000, according to the U.S. Bureau of Labor Statistics. Great news! Maybe not. There are business sectors that need employees due to constraints in the labor market - namely truck drivers. The level of employment in the truck transportation industry is essentially unchanged since mid-2015, according to the bureau. And the impact is being felt.

Hauling containers from ports and rail ramps to customer’s door is getting more expensive.

Steamship lines are beginning to pull back on door-delivery services because of escalating container drayage trucking rate increases. The Cass Truckload Linehaul Index, which measures pricing excluding fuel surcharges, rose 62 percent from December 2016 to 2017. This means ocean carriers door-to-delivery services are marginally profitable.

Our team regularly meets with trucking company leaders and drivers. They’re having a hard time finding good people due to low unemployment rates combined with a tough industry. Here’s what’s happening.

Rates are increasing. Why?

  • A healthy economy equals high freight demand (increased imports) and tight capacity translates to higher prices.
  • Basic economics There’s an industry driver shortage with less people to drive more goods in a strong economy.
  • There’s been an increase in wait times and congestion at container yards due to increased import volumes. Longer waits translate to fees and added cost.
  • Diesel fuel prices have increased.
  • Most truckers are reducing free time to one hour. They also charge for waiting time at the ramps or will charge a ramp surcharge when they wait over an hour to get a container.
  • The challenges for truck drivers also are increasing.

Early this year the Electronic Logging Device rule went into effect. Truckers are now limited by federal law to drive no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours. DAT Solutions, tracks freight and rates, truckers and other industry data, to learn how the ELD rule is affecting our trucking friends. According to their survey, 67.3 percent of the truckers say they are driving fewer miles since the ELD rule started late last year. This means it’s taking trucking companies more drivers to do the same amount of work they did before ELDs.

Driver demand should equal more pay, right? Drivers are making less pay because of ELDs—less time to work, less money. DAT reports that nearly 71 percent of drivers reported earning less money because they must stop driving after 11 hours.

As a result, trucking companies are raising driver pay to make of the difference. And, drivers are demanding higher wages because of the overall driver shortage. New drivers are wanted and needed. Trucking companies are having a very difficult time recruiting new drivers. During a recent conversation, one trucker said he goes to the ramps every week handing out flyers and water bottles promoting his driver jobs. It still doesn’t help much to attract new drivers.

Truckers are taking a hard look at customers who make them wait to get loaded and unloaded. Many drivers refuse to go back to warehouses that consistently make them wait over an hour. 

Steamship lines can’t find trucking companies willing to deliver to customers door at rates that were negotiated six to eight months ago. Importers are scrambling to find truckers to cover all their container deliveries; many times, this causes a demurrage fee for storage at the container yards.

This year large importers can expect steamship lines to be reluctant to include container delivery rates in yearly contracts. This will put additional pressure on importers requiring them to handle their own container deliveries by going direct to the truckers. Most importers will need multiple trucking company agreements to get this done. Sound complex?

How should companies that import or export handle this situation? Now might be the time to review your import “last mile” situation for delivering containers. Make sure you have a relationship with a local container drayage company to handle deliveries in 2018 or partner with a freight forwarder, such as Cargo Services.

We’re also reminding our client companies, be kind to the truck driver. These are people who are working hard in a tough industry. Let’s give them the kindness they deserve for a job well done.

John Rowe is the managing director and co-owner of Cargo Services.

  • Perspectives

    • An Antidote For First-Time Homebuyer Jitters

      If you're a Millennial like I am, chances are you're in the market to purchase your first home. It's exciting!  But since it's most likely the largest purchase you've ever made, it can quickly turn into a nerve-racking endeavor. Having just completed a transaction, I found that following these guidelines can ensure a smooth process. Every homebuyer's experience will be different because of a number of variables such as what state you live in and the condition of the housing mark...


Company Name:
Confirm Email:
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections


  • Most Popular Stories

    • Colts Makes Promotions, Hires

      The Indianapolis Colts have announced the following changes to its football operations staff and team. Ed Dodds has been named assistant general manager. He enters his second season with the Colts and his 16th year in the NFL. Brian Decker has been promoted to director of player development. Jon Shaw has been elevated to assistant director of pro scouting. Also, Stephanie Pemberton (pictured) has been promoted to vice president of marketing.

    • Mark Music is chairman of Ruoff Financial Corp.

      Ruoff to Acquire White County Bank

      Fort Wayne-based Ruoff Financial Corp. has announced plans to acquire SBB Bancshares Inc. in White County. Financial terms were not disclosed, however Ruoff says once the deal is complete, SBB subsidiary State Bank of Burnettsville will be renamed and operate as Ruoff Bank. The acquisition is expected to be complete in the fourth quarter. Ruoff says no job losses are expected. Ruoff Financial Corp. is the parent of Ruoff Home Mortgage, which has more than...

    • Sazerac Acquires Former General Mills Plant

      Louisiana-based Sazerac Co. Inc. has made the first step in its recently-announced plans to locate a new alcohol bottling facility in Indiana. The company has purchased the former General Mills plant in New Albany for an undisclosed sum, a move that is part of an overall $66 million investment that is expected to create up to 110 jobs by 2021. A joint venture between New Mill Capital Holdings LLC and Tiger Group sold the facility to Sazerac. The 455,000-square-foot plant closed...

    • Nonprofit to Present DCS Findings

      Officials from the Alabama-based Child Welfare Policy and Practice Group will Monday present the final findings and recommendations from its evaluation of the Indiana Department of Child Services. Governor Eric Holcomb requested the assessment in December following the resignation of former DCS Director Mary Beth Bonaventura.

    • Pogue's Run Grocer opened in 2010.

      Pogue's Run Grocer Closing

      An Indianapolis grocery co-operative says it will close Tuesday. Pogue's Run Grocer, which opened on the city's near east side in 2010, announced on Facebook that sales are at the lowest they've ever been and "the store has reached a point where it cannot sustain itself and the people who are carrying most of the burden are the employees." Pogue's Run has focused on selling local produce and organic and responsibly-sourced foods.