People considering a career as a truck driver would be wise to look beyond the splashy headlines about supply chain disruptions. The boots-on-the-ground reality is that more truck drivers are needed to handle the spike in monthly tonnage. According to the American Trucking Associations, the For-Hire Truck Tonnage Index rose by 2.4 percent in September after a modest increase in August.
“September’s sequential gain was the largest in 2021,” ATA Chief Economist Bob Costello reportedly stated. “It is good that tonnage rose in September, but it is important to note that this is happening because each truck is hauling more, not from an increase in the amount of equipment operated as contract carriers in the for-hire truckload market continue to shrink from the lack of new trucks and drivers.”
As Costello points out, the supply chain hiccups have led to Class 8 truck and trailer manufacturers experiencing production slowdowns. The slowdown in new equipment will not necessarily impact truckers pulling loads because the industry requires an additional 61,000 to 80,000 qualified truck drivers heading into 2022. The country currently has enough equipment to field a full complement of CDL holders.
The for-hire tonnage levels were reportedly the highest ever for the month of September, and the trucking industry shows no signs of slowing down. Many retailers began ordering holiday items early this year, fearing delays would curb seasonal profits.
The DAT Truckload Volume Index declined from August to September, supporting the idea truckers are hauling larger capacity loads. The DAT generally measures the number of pickup loads regarding dry van, refrigerated, and flatbed hauls moved by carriers. This measure typically dips by 7-10 percent, but only fell by 1 percent month-over-month. The surge in freight carrier needs appears to be creating greater demand for truckers.
“Businesses are shipping early and, where possible, by truck in order to make sure they have inventory, but this means using the spot market or higher-priced carriers to cover their loads,” DAT Chief of Analytics Ken Adamo reportedly said. “If you’re accustomed to having the right truck in the right place at the right price, you can have one or two of those things but probably not all three.”
The essential question upstart truckers and consumers may be most concerned about is whether the supply chain impediments are a long-term condition. With tonnage up by both measures, compared to previous years and freight costs escalating, inflation has been an unwelcome byproduct. The good news is that freight and logistics experts are beginning to predict that some sense of normalcy could prevail after the gift-giving holidays.
“The pandemic has created unprecedented situations on both the demand and capacity sides of the ledger, and the range of plausible outcomes remains quite broad. One scenario is that spending on goods crashes in 2022 or 2023, especially if inflation continues,” FTR vice president Avery Vise reportedly said. “However, while growth in freight demand almost certainly has peaked, unprecedented levels of consumer savings and debt retirement could maintain a solid floor on freight volume. Pandemic-related constraints on driver capacity might make it harder than usual to bring demand and capacity into balance, but nobody truly knows how many drivers have left the market permanently.”
Sources: ttnews.com, logisticsmgmt.com
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