The U.S. market is facing a serious shortage of qualified truck drivers. The driver shortage is impacting the carriers’ ability to deliver containers in a timely manner. The shortage is so severe in some U.S. regions that some carriers are refusing to quote new cargo opportunities where door delivery is being requested.
There are several factors that have contributed to the current shortage. Older drivers have been complaining for years about the lack of increased pay and the long wait times at terminals. The frustration has reached a point where many drivers have decided to retire or pursue other opportunities outside the trucking industry.
Owners of trucking companies understand there is a serious problem and recognize higher wages will be necessary to address the problem. They are making sure everyone understands that all stakeholders, including shippers, must share in the financial burden to minimize the problems being attributed to the driver shortage.
In the past, shippers could shop their business to other truckers if their current trucker wanted an increase. Shippers employing that tactic in today’s environment will likely achieve even higher truck rates. If the rate is not profitable, shippers should be prepared for truckers to take a pass on moving their business. After years of being squeezed, truckers realize that they now have the leverage. They are being much more selective on the business they transport.
The same can be said for ocean carriers. They have made it clear that they will no longer subsidize the trucking portion of the container transport where store door delivery is required. The trucking portion will be treated as a pass-through cost. If the trucker increases the cost to an ocean carrier, expect these increases to be passed on to the shipper.
Orders for new trucks increased sharply in January 2018. While this is positive news for the industry, it will take time before the additional capacity impacts the market. It does not matter how many new trucks roll off the production line if there are no drivers to operate them.
The International Housewares Shippers Association (IHSA) is a not-for-profit association formed to benefit companies belonging to the International Housewares Association (IHA). Through the combined leverage of members, IHSA negotiates freight contracts and partners with other logistics providers to lower supply chain costs.
IHSA’s main function is to negotiate the lowest possible transportation rates and provide the highest quality service for all participating members. Additionally, IHSA members receive valuable market intelligence and advice through regular newsletters and briefings.
IHA member companies looking to reduce their ocean freight costs or have questions about an ocean freight issue are encouraged to contact IHSA to learn about the program. Contact IHSA at +1-513-489-4743 and learn more on our website.