Trucking Industry in a Slump
The trucking industry is currently in a slump and, in all honesty, has been for a good number of years. There are a myriad of reasons as to why and there are difficulties everywhere.
Mega fleets seem to be hit the hardest with rates down, a driver shortage, and regulations on the rise.
In addition to that bad news, there are many unpaid tasks such as DOT mandated thirty minute breaks, loading and unloading time, border-crossing procedures, winter road closures, that drivers are forced to deal with every day. Does it really come as a surprise that the annual driver turnover average is 97%?
Mega Carriers with High Turnover Rates do not make Good Partners
The mega contract carriers have the most seats to fill, and during these challenging economic times they have resorted to lowering their standards. They have been hiring substandard recruits who are discrediting their companies and the industry as a whole. Some of these recruits are even a hazard to the motoring public due to their inexperience.
One might ask a question from shippers and receivers: Do you want to be serviced by the mega fleets that are experiencing a 97% turnover rate? I suspect that they do not. You see the shiny mega fleets on the interstates, but when they appear at your dock, you start to see behind the facade. You witness drivers who are unhappy with their jobs, small wonder almost every one of them seems disgruntled.
Who Can You Partner With?
If you’re looking for a carrier with a bit more stability then you might want to consider partnering with a 3PL, as they have an advantage over mega fleet contract carriers. Firstly, they have access to thousands of small fleets and independent owner-operators who are geared for service and success. These smaller carriers are nimble and have more flexibility to better serve shipper needs and they do not possess the disgruntled workforce, which is common to the mega carriers. The independent owner-operator is a common resource that 3PLs have access to, and these truckers take a great deal of pride in their equipment and service. They are directly, and even personally, involved with making each shipment a success.
The aforementioned independent truckers and small fleets operate in the spot freight market. There are no long-standing contracts here – the current market conditions determine what a load costs. The rates in the spot market are usually close to those in the contract market, but there are market influences, that cause them to fluctuate. The most common of these fluctuation factors is supply and demand. When there are only a few empty (read available) trucks, the rates will be higher. Conversely, when there’s an abundance of empty trucks, the rates will be much lower.
As in business, success usually lies just out of reach of security. The security of long standing contracts can soothe a lot of shipper anxiety. However, utilizing 3PLs who have access to service-oriented carriers focused on service and not internal problems, should be a stress-reducer for any traffic manager.