Shrinking truck capacity becomes a major issue for shippers

Dive Brief:

Transportation company Averitt Express' annual survey has concluded that truck capacity is currently of foremost concern, especially as it affects full-load transportation, Fleet Owner reported.
Averitt’s State of The North American Supply Chain survey, conducted across a broad swathe of industries, discovered that roughly one in five shippers experienced capacity issues in 2017 — approximately double that of 2016. Further, most shippers — roughly 76% of the 1,600 surveyed — expect 2018 to increase volume.
Capacity is believed to be shrinking due to three main factors: the ELD mandate, the seemingly endless driver shortage, and manufacturing growth that is putting more pressure on truckload capacity throughout the U.S.

Dive Insight:

The Cass Freight Index noted that November 2017 saw the strongest growth in a decade, with trucking shipments having increased 0.2% MoM and 6.3% YoY. Currently, there's a 14:1 demand ratio between need and availability.

Wayne Spain, COO of Averitt Express spoke with Supply Chain Dive regarding the survey results.

"Several factors are driving pressure on capacity, including the continued driver shortage," Spain said. "While the ELD mandate may lead to more tightening of capacity after the April 1st leniency deadline has passed, another factor to look out for is the effect of the new tax law. We may see a surge in companies ramping up production as they seek to grow their market share in 2018."

Regarding shipper alternatives, Spain also cited methods growing in popularity.

"Intermodal and Multimodal solutions continue to gain traction among shippers, especially as capacity tightens across North America," he said. "And with continued improvements in shipper visibility and tracking, these solutions offer a solid alternative to traditional over-the-road transportation."

As for driver shortages, Spain described his position on the matter.

"Finding qualified drivers continues to be a challenge, especially for providers like Averitt who have such high standards in terms of driving records and personal appearance," he said. "Of all the drivers who apply for positions at Averitt, we hire about 3%."