At this FTR Transportation Conference held this week, the issue of capacity crisis was first and foremost among the trucking providers, shippers and others discussing the landscape of the freight industry. Related to capacity is, of course, the ever present driver shortage issue.
“What we’re seeing from a customer standpoint is we’re up with our core customers, our primary customers, but the secondary shippers want more capacity and we haven’t been able to deliver on that front,” added Craig Brown of Maverick Transportation.
Donald Broughton, an analyst and managing director at Avondale Partners, noted that “the thing we’re seeing widely happening is the discernment of ‘I’m not going into that shipper because it will take too long to get loaded, or I’m not going into that receiver because it will take too long to get unloaded.”
“The ‘transactional’ customers are breaking out the P word, partnership. Frankly it’s been a long time since we sat down with a lot of transactional customers and talked about partnerships.”
Brown says more shippers are suddenly interested in talking about ways to eliminate driver irritants and waste, such as reducing bottlenecks at shippers’ facilities. “We’ve done a lot of collaborative work with shippers.”
Changes to hours of service rules and the increasing use of e-logs, detention surcharges are becoming somewhat easier to justify, but the assembled group point out that charging a fee for wasted time still isn’t enough to make carriers profitable.
“By the time you look at the truck and trailer, forget the driver, you’ve got $150,000 worth of capital sitting out there and you’re going to get paid $60 (an hour) for three hours (waiting). You can’t run a Weedeater for that,” quips Broughton.
Brown noted the administrative headaches to collecting detention. “I don’t want to get paid detention,” he said. “I want to eliminate detention.”
“Experienced and forward-thinking shippers feel the shifting plates beneath the freight market and are adapting to the new realities”, says Jim Tucker, president and co-owner of freight transportation brokerage Tucker Company Worldwide. However, he adds “there are still plenty who are getting a rude awakening the next time they put out an RFP for bids.”
“There are a great deal of our customers that have no idea what’s going on. A lot of them think they’re going to put an RFP out next year and they’re going to get better prices,” adds Tucker “They’re going to be very surprised.”