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In their State of the North American Supply Chain study conducted last year, Averitt Express asked 1,600 shippers about which factors they thought would have the greatest impact on the shipping industry. Overwhelmingly, they said that diminishing truck capacity, a problem face by 20 percent of truckers, is their number one concern. This is a major problem for an economy that continues to grow at an exponential rate.
A growing economy needs a strong shipping industry in order to sustain its growth. If shippers can't meet shipping demands, that results in more products not moving in a timely manner and many shippers could be forced to raise their rates. Since shippers don't have the truckers to deal with this problem, they're turning to air and rail transportation to help alleviate some of the pressure. However, it's not a permanent solution because although air and rail are good ways to transport large quantities of goods from place to place, they can't get those goods to their final destinations. Only truckers can do that.
One could ask why shippers are having a problem with diminishing trucking capacity. The reason is that they don't have enough truckers to handle the demand because they're having trouble recruiting and retaining new talent. Even though there are plenty of trucking jobs available, people don't want to live the trucking lifestyle. Truckers can make a good living, but they also spend many hours on the road and away from home. Why does this matter? Most people value their time at home more than they value making money. Automation, or trucks that drive themselves, has been named as a possible solution to this problem, but the technology hasn't progressed enough where it's a viable option.
If the shortage of truckers is the cause of diminishing trucking capacity and automation isn't ready to fill the void, what can be done? Well, the shipping industry got lucky when Congress passed tax reform in December. There are still many details that need to be fully interpreted and understood, but the bottom line is that it will allow shippers to keep more of their money. This means they can buy more trucks, increase wages, and help make life on the road more bearable for their truckers, which should help increase trucking capacity. How this actually plays out is yet to be seen. However, one thing is clear: 2018 will be a busy year for the shipping industry.
For more information about the trucking industry, please feel free to contact us.
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