Truck Driver Wage Increase Expected to Increase Shipping Costs Lending Towards Shippers To Focus on Transportation Management
Those in the trucking industry may finally get that big pay raise they’ve been wanting for decades. But what will this mean to those on the logistics side of shipping and receiving? After all, if if there is a truck driver wage increase that money has to come from somewhere. The major concern throughout the logistics sector is that the increased pay will cause shipping costs to spike. While there is little doubt that truckers deserve a pay raise, nor that it will indeed take place, the issue for logistics firms is in understanding how to brace for impact.
The Trucking Industry in Crisis
According to the Bureau of Labor Statistics, the heavy and tractor-trailer trucking industry is projected to increase by 11 percent through 2022. The main reason for this growth is the expansion of good economic growth. However, there is the underlying reality for those in the trucking industry that is also pushing this job growth. As more DOT regulations are being enforced, followed by the physical demands of the industry and the lack of excellent pay rates, fewer individuals are getting their CDLs. As the old timers retire from the trucking industry, there are fewer young drivers with the experience and willingness to do the difficult tasks demanded of truckers. The Journal of Commerce notes that the truck driver wage increase will increase truckload rates by 12 to 18 percent in order to cover the increased cost of the drivers.
Impacts of Truck Driver Wage Increase for Shippers
For those in the shipping industry the need to find a way to cut costs is imminent. As truck driver wage increases are already happening, as noted by Conway for example, shippers need to have a plan of action in place now. The biggest area of concern for shippers is in the increased cost of shipping goods. In order to cut costs, consider going with a third-party logistics provider who is laser focused on transportation management. By choosing a 3PL you can reduce the costs in the logistics planning by outsourcing this service. In doing so you can recoup some of the cost of increased shipping. You can expect to save 4 to 7 percent on shipping costs if you go 3PL, which can quickly add up to substantial savings for your shipping needs.
Saving Money for Shippers
Other areas where you should look for saving money on shipping costs include the use of technology to handle freight management. If you are currently operating on a paper and pencil system you can bet your bottom dollar that there are errors, or at the very least time consuming and costly methods, in your logistics system. By going full tech you create a seamless and nearly instantaneous tracking system that helps you move freight with fewer chances for costly mistakes.
You are also freeing up your valuable time to work on other aspects of your logistics efforts. If you are interested in saving the installation and upkeep costs of transportation management technology, a 3PL offers the most cost effective solution. By choosing a 3PL who has access to state of the art technology that can move your freight faster you are going to save money in shipping. Additionally, a 3PL will be responsible for all maintenance and updating of such technology, which takes the guesswork out of operating such a system out of your hands.
Improving Accounting Systems
Accounting is the place to go when dealing with numbers, but have you considered trimming the fat in your accounting department? Another way you can cut costs for shipping is via a freight accounting system that helps you track and invoice all shipments in a streamlined method. Whether you are coming up short with time for freight bill auditing, or you are missing the mark with freight invoicing, freight accounting services can consolidate all of these necessities into one convenient system. Look for a 3PL to provide you with a structured and simplified method for tackling all of the accounting needs for your shipping. You will cut hourly costs, while also saving money through clerical errors and mismanaged invoices, through a third-party managed freight accounting service.
The future of trucking is solid. After all, you cannot outsource truck drivers to other countries when delivering goods to cities in the USA. Additionally, we will have to accept that a truck driver wage increase will increase shipping rates to cover the demand of supplying consumers and businesses with goods. The only thing you have control over as a shipper is the way you handle your end of the business. Save money with a 3PL service to manage your shipping needs, so you can keep up with the growing costs of shipping.