The Mountain of Possibilities (& Challenges) Facing the Future of Long-Haul Trucking In America
The transition of physical retail to e-commerce is causing seismic changes within the trucking market, disproportionately hitting OTR trucking and the driver pool that it dips in
A hearty welcome to the 40th edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
The Wall Street Journal recently ran a story on how residents across Atlanta have issues with long-haul truckers, citing the piling up complaints at the local city councils on tractor-trailers trampling their peace and quiet. At the center of the e-commerce and its associated warehousing boom, Atlanta is now home to two of the top five truck bottlenecks in the country.
While increasing traffic would be an inconvenience for neighborhoods, chastising truck drivers would be ironic, considering they are there for a reason — a reason that points fingers right back at the people who make up those neighborhoods. "The increasing trucking activity is an unintended consequence of people wanting everything delivered immediately," pointed out Dean Croke, principal analyst at DAT.
This puts a spotlight on the importance of truck drivers in powering the e-commerce engine. Where are we, as a country, in ensuring a steady pipeline of able, interested truckers over the next decade and beyond?
Where are we, as a country, in ensuring a steady pipeline of able, interested truckers over the next decade and beyond?
In a previous edition of the newsletter, we spoke of how the long-haul trucking industry needs to find ways to incentivize fleets to train their drivers. And how it's crucial to bridge the gap between government authorities and the driving community, to ensure truckers feel safe (and essential) while behind the wheel.
But there's a lot more to it for truck drivers to continue sticking to their profession — especially today, where there are a lot of jobs available within the logistics industry where they could earn just as much, with a lot less struggle. Long haul trucking requires drivers to be away from their families for weeks, sleep in questionable parking lots, and eat heavily processed food. The millennial and Gen Z workforce, for better or worse, is less likely to take up long-haul trucking with the same conviction as the generation that came before them.
Aside from obvious issues with finding people who would willingly take on such punishing schedules, there's also the steeply growing need for more trucking capacity in the country. The explosion of interest in e-commerce has made parcel sizes smaller, even as parcel frequencies climb.
This inevitably results in more voluminous packaging for what might have traveled in bulk before, inflating trucking capacity needs and straining an already-strained truckload market. In essence, the long haul trucking industry is being squeezed on both ends — be it the debatable supply of drivers or the quickly escalating demand for trucking capacity.
The long haul trucking industry is being squeezed on both ends — be it the debatable supply of drivers or the quickly escalating demand for trucking capacity.
"Long haul truckload capacity continues to remain tight, in part due to its difficulty in hiring drivers. The pandemic made it clear to people that there are many well-paying jobs close to home. If I'm a millennial with a CDL, I'd rather work for a small delivery company in my area than be employed with a large carrier firm and be away from family over the week," said Croke.
Thanks again to e-commerce, there's a lot more last-mile delivery activity today, and this market could inevitably suck up such driver talent, which, if not, would have floated into the OTR trucking segment.
"The pandemic really shook up the market and the working population. It changed the way we live, work, consume, and travel. We've shrunk our radius of operation to a large extent, and this results in warehouses moving closer to us," said Croke. "This is one of the reasons why you see a lot more 53-foot trailer activity near neighborhoods — inventories are stocked much closer to the urban population today than what was the norm a decade ago."
Meanwhile, technology is quickly catching up, developing solutions to alleviate several OTR trucking constraints. Autonomous driving technology has a great use case in mid-mile long haul trucking, considering this segment of trucking is predominantly over interstate highways where the traffic is homogenous and predictable to an extent.
While companies like TuSimple are running autonomous truck pilots, Croke contended that the more immediate use of autonomous technology would be the safety aspect it could add to the truck.
"I'm against the idea of removing drivers. I think it's an issue beyond technology, especially if it happens without a conversation about rescaling displaced workers. The government too would be cautious about the adoption rate, as they'd be worried about the impact it can create on voting numbers, as a lot of blue-collar workers will get displaced," said Croke.
"However, the technology is a nice safety net for new rookie drivers who've got no experience working long haul. Autonomous technology can help drivers get some sleep in the cab while it assumes control of the wheel — this, in turn, would make OTR trucking more attractive as a profession."
Autonomous technology can help drivers get some sleep in the cab while it assumes control of the wheel — this, in turn, would make OTR trucking more attractive as a profession.
Autonomous technology apart, there are other ways technology could circumvent the issue of keeping drivers out of their homes for days at a stretch. The relay model of trucking can help. This involves a truck driver driving from one truck depot to the next one a few hundred miles away, dropping the container and loading another, only to get back to the origin by the end of the day. By building a dynamic dispatch schedule, companies can optimize truck arrivals and departures across every transit depot in the network. For starters, this could be implemented across major trucking lanes, as there would be adequate volumes in transit and fluidity in the system for the network to work.
The government, too, can help. Starting with rebuilding worn-out infrastructure, courtesy of the Infrastructure Bill. That said, the funding might still be inadequate. While the bill allocated $40 billion over a five-year period, the American Road & Transport Builders Association (ARTBA) has mentioned that it would cost roughly $260 billion to completely overhaul damaged infrastructure. Even if only the structurally compromised bridges are rebuilt, ARTBA estimates it would cost the exchequer close to $58 billion.
Bad roads and bridges accelerate the wear cycle of the truck. Bridges are fixed concrete-steel structures with asphalt on either end. When subject to different weather conditions like heat, rain, and snow, the pavement and bridge behave differently, creating damage at the transition point.
"There's a vertical acceleration, deceleration effect on the truck every time it goes up and off the bridge. This damages the suspension, essentially exacerbating wear and tear. Then there's the damage that it causes to loads," said Croke. Bad infrastructure also takes a toll on the driver's physical well-being, with many years spent behind the wheel leading to chronic back and shoulder pain.
Bad infrastructure also takes a toll on the driver's physical well-being, with many years spent behind the wheel leading to chronic back and shoulder pain.
"While building back the infrastructure is a welcome move, it could create bottlenecks in the short term. Construction usually happens when the ambiance is warm enough to lay asphalt, which would see highways or bridges across interstates partially shut down. Traffic banks up on either side, which slows down the flow of freight. We have to suck this up, and that's going to be a feature of the freight market for the next few years," said Croke.
This is the downside — though the bill creates jobs and helps move more construction-focused freight, it also reduces freight throughput on the highways. In some ways, this will also impact the size of the driver pool available for long-haul trucking, as petrochemicals that go into constructing roads, bridges, and buildings are usually short hauls, creating thousands of predominantly domestic jobs. Executives of large trucking firms are already concerned, stating this could exacerbate their difficulties finding drivers for long haul.
And then, there's the weight limit issue over roads. Every road is designed for a specific weight limit, which will lead to its disintegration if exceeded frequently. "Navigation systems in the market can provide truck routes to drivers, ensuring they do not have issues with vertical clearances, breach widths, and road weight limits," said Croke.
But not all road regulations across states are made equal. Croke pointed out that while the gross weight allowed on most interstates is 80,000 pounds, there are states like New England and New York where trucks can run weighing significantly more. Pavement damage is extreme as trucks get heavier, especially in places where freezing and thawing of roads is an annual affair.
Pavement damage is extreme as trucks get heavier, especially in places where freezing and thawing of roads is an annual affair.
"This is aggravated by drivers who don't have all their axles on the ground to spread the weight out. If a truck has six axles, it is not surprising to see drivers have only three on the ground and the other three tucked above to save tire wear," said Croke.
"The key to prevent pavement damage from bigger trucks is by spacing axle groups, which spreads the weight out. We only need to look at Australia, where they run road trains. A good road design would allow multi-combination, heavy trailers. A five-axle truck in the US carries 80,000 pounds, while its equivalent in Australia runs 130,000 pounds on nine axles on the same powered unit. This way, you distribute weight better, reduce pavement damage, even as you reduce emissions by running fewer trucks."
In the end, the long-haul trucking industry must leave no stone unturned to attract and keep its drivers. It is about overhauling existing challenges and systemic problems that persist in the system while deploying technology to assist truckers at their job. Listening to truckers and catering to their needs has never been more important.
The Weekly Roundup
In the face of ever-increasing shipping rates, many shippers are opting to lock into long-term contracts with ocean carriers. While this may protect shippers in the face of further rate increases, industry experts warn that this could be a short-sighted effort. Both contract and spot rates are cresting at an all-time high, but any number of factors could cause them to drop precipitously. By signing contracts now, shippers could be locking in these rates for years to come.
Port congestion and capacity shortages not-withstanding, two of the biggest concerns over the state of the global supply chain are China’s Zero COVID policy and the upcoming Union negotiations with U.S.-based dockworkers. Lars Jensen, CEO of Vespucci Maritime warns of a third possible concern. The current risk of conflict between Russia, Ukraine, and Western Powers. In the event of a conflict, NATO sanctions will likely be issued, to which Russia will respond with cyber attacks the likes of which shutdown Maersk in 2017.
Concerns over U.K customs checks are continuing to mount, but not for the reasons typically expected. Border crossings across the U.K are seeing nominal if any amount of congestion that would typically be seen with customs checks. Industry rumor mill varies as to the reasoning, citing either customs officers are simply waving trucks through or carriers have found a means of circumventing the checks altogether. HMRC officials state that their systems are online and they take customs compliance incredibly seriously.
The global semiconductor shortage from 2021 has affected nearly every industry including but not limited to automotive, consumer electronics, medical, military, and aerospace. Semiconductor manufacturers around the world have increased production and sales by over 27%, fueled in part by government economic programs in both the U.S. and the U.K. Demand is expected to continue increasing as more facets of daily life go digital. All of this begs the question as to what will happen with the global supply chain as sales continue to increase.
…said who?
“We would frankly like to spend more, but we have been limited by several suppliers that are facing manufacturing challenges.”
- Greg Gantt, chief executive of Thomasville, a N.C.-based trucking firm, commenting on the difficulty with procuring equipment since the pandemic
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