For the truckload market, finding and retaining good quality drivers remains a continuing challenge, and with more veteran drivers expected to retire this year than new drivers joining the profession, the pressure isn’t letting up. We have to be more creative, innovative, and opportunistic about how and where we look for and encourage people to become professional drivers.
Yet today, that challenge pales in comparison to the surging costs of running a business. From fuel to maintenance to parts, through labor, liability insurance, utilities, equipment costs, and health care, all are running at a pace that is unsustainable.
It’s especially tough on mid-sized carriers and small independents — they will struggle to survive. According to industry reports, there were some 7,000 carriers that shut their doors in the third quarter. These carriers are the “circuit breakers” of the business, capacity that flexes with the ups and downs of demand. As this pool shrinks, capacity will again tighten.
At the same time, shippers are coming to the table more aggressively demanding rate reductions. I recognize their costs are going up, too. But in this accelerated inflationary environment, few trucking firms, already dealing with rising costs, can afford yet more pressure on pricing in a challenging market. Ultimately that will catch up with the shipping community very quickly in the sense that you will force capacity out of the marketplace, and it will not come back.
A word of caution: shippers and carriers need to be honest with each other, share as much insight and data as possible, and speak to the facts. Ultimately, this market could flip on a dime into a capacity shortage if shippers get overly aggressive too quickly.
Until we figure out as a country how to get oil prices under control, we are going to continue to see inflation that is extremely hard to swallow. It affects everything.