Full Trailer Trucking Sector at Risk from Shortage of 50,000 Drivers
Until last year, LTL carriers were largely immune from the driver shortage that's plaguing growth in the truckload (TL) sector. The American Trucking Associations (ATA) estimated that the industry is short about 50,000 drivers right now, with some of those shortages in the LTL sphere.
In the TL sector, sign-on bonuses as high as $10,000 are being offered for drivers who last one year with a company. Even so, driver turnover in the TL sector rose 5 percentage points to 95% turnover in last year's third quarter, according to Bob Costello, chief economist for the ATA.
"Shippers realize that capacity has tightened, but they're still fighting to keep their rates from increasing too much," says Pitt Ohio's Hammel. "Some are putting their business out for bid, but are receiving rate increases anyway."
Article in Logistics Management - John D. Schulz - April 3, 2018
The story is different in the Full Trailer Load (FTL) compared to LTL. FTL suffers from lack of drivers and they can't keep up with the demand. This is why there is not a large increase YOY like LTL. Most shippers don't sign contracts and are subjected to the fluctuating spot rate market. Strategic contracts with a pool of FTL carriers will generate stability and efficiency and lower costs in the long run.
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