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Transportation Industry Braces for a Looming Transportation Capacity Crunch Crisis in 2017

transportation capacity 2017

Expected Transportation Capacity Issues

The concern and dialog about the transportation capacity issues for our country have bridged the past two decades and beyond. In fact, according to a released, in-depth analysis of the State of Logistics report from the Council of Supply Chain Management Professionals , (CSCMP), the United States expects that by 2017, supply chain organizers will be less concerned with paying higher trucking rates than being able to find trucking container space available to haul their freight.  We have heard so much over the years about a coming capacity crunch crisis, many argue if crisis is the proper terminology.

Among the most discussed catalysts for the next approaching transportation capacity crunch, we have to look at collaboration between all the players in the myriad of logistics layers.

3pl vs 4pl

If the many components of logistics and supply chain management do not engage effectively with the transport workforce and manufacturing skills gap of the U.S., crisis may be an understatement rather than an over statement. One of the essential pieces to working this out smoothly will be active listening. An example would be hearing out reasons behind the needs each side wants to address.

What we (Transportation Workers) Need is Not Personal, It's Economical & Common Sense...It's Way More than "Complaining"

When asked, "What We Need,” many manufacturers will understand the reasons why logistics and freight haulers say they require attention to road and freeway conditions. On the short list of upgrades and improvements:

  • Smooth pavements
  • Wide shoulders
  • Advanced warning lights at intersections, with working traffic signals

Now of course, this continues to strengthen the need for a hard look at how we handle the Highway Trust Fund and how we deal with aging infrastructure.

We anticipated the snickering, indeed. Are smooth pavements to accommodate truckers with delicate behinds? Why are they clamoring for smooth sailing routes with no stops and continuous speeds while the rest of us sit in frustrating traffic and bottlenecksnthat hold us up day after day? Well, basically, because getting freight in a smooth matter is clearly important to helping combat the capacity crunch as it is and of course, moving forward.

Economically, these requests make financial sense, considering the changes in freight regulations that has occurred in recent years. There would be less breakage and loss of the delicate, high-tech equipment being hauled cross-country these days if the road and freeway surfaces were resurfaced and smoother to reduce vibration. Keeping certain routes open and free flowing also has nothing to do with the tender undersides of haulers. Rigs regularly relied on to transport livestock animals need to ensure they have consistent and proper airflow and circulation to keep their cargo healthy and in excellent shape for market.

Some additional immediate needs should be self-explanatory:

  • Highway safety innovations
  • Training for maneuvering over-sized vehicles through roundabouts
  • Improved National communications for real-time road conditions, approaching storms, detours, other hazards

4 Drivers of the Looming Transportation Capacity Crisis of 2017

transportation capacityIt is not hard not to understand why all disciplines in these logistics and transportation industries need to shave off any costs possible; some critical facts ahead put additional burdens on a stressed alliance.

  1. Governmental Regulations - Currently there are no less than 20 laws threatening deep impact on transport costs. From the impending "Driver Coercion Law", CSA Compliance, Hours of Service, and e-Logs, to name a few, some changes in these laws affect various businesses in different and unique ways. In some instances, a broken law will carry hefty financial penalties on shippers, motor carriers, as well as logistics operator. These regulation infractions possibly could add cost by revoking operating authority of the freight brokers, forwarders, and carriers. The trucking company, trucker transport shortage is already being felt with an already critical loss of 5,000+ trucking companies and 400,000 trucks now off the route.
  2. Loss of Truckers with Commercial Drivers Licenses, (CDL's) - This is the time retirees are leaving in droves, and there is a shortage of trained and licensed truckers willing to replace them. Trucking schools are actively recruiting and the going is tough. The most likely candidates are singles with no young children or families, which offers the freedom to live on the road, hauling across the country. One resource for a new workforce that is being tapped is single African American women seeking good incomes, and independence that comes with a promise of a new future ahead.
  3. Deterioration of Existing Fleets  - In the aftermath of our economic issues since 2009, corporations in the U.S. sought to keep their businesses by down scaling, and could not afford to pour money into upgrading and repairing their equipment, trailers, and rigs. Many vehicles have been reassigned to less rigorous work.
  4. Lack of Cross-communication and Proper Cost Analysis - Profit management is intertwined with proper benchmarking and transportation cost analysis. So much more now than ever it is required that shipper's direct transportation costs and each carrier's operating costs must be effectively calculated and reductions applied. Per mileage costs for LDL, for FTL & LTL Carriers, benchmarks like setting fuel costs at 39 percent of total carrier costs, driver wages at 26% and payments and loans at 11 percent, shippers, manufacturers, and haulers, can no longer look at past simple matrix calculations to completely understand costs and profits.

One significant asset to improving the predictable outcomes for transportation and logistics operations will be the overall use of Transportation Management Systems that use constantly available data to manage every aspect of variables in freight costs and transport rates, optimal use of logistics, and continual monitoring of industry compliance everywhere in the U.S.A.

What do you think will happen by 2017 in this transportation capacity issue? Let us know in the comments below.

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
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  • Jim Morehouse

    There are a couple of ideas that can be looked at to try and help mitigate this impending crisis. Unfortunately they all require Congress and the states to pony up the bucks.
    First, absolutely infrastructure needs to be addressed. Roads and bridges need to be repaired and improved. Truck routes need to be clearly marked several times before the actual turn. Any time road improvements are made where there is known truck traffic then more room for safe wide right hand turns need to be taken into consideration just to name a few. The problem is getting Congress and the states to pay for those improvements when not only do they constantly rob the transportation trust funds to pay for other pet projects but also vehicles are getting more fuel efficient and voters don’t want to hear about a raise in the gas tax will be next to impossible.
    Another thing that could be done can be led by private industry but would need some federal help. Logistics across the country needs to be looked at as a big picture. What I mean is transportation in this country is more than trucking. An “interstate” network of rail needs to be developed. (Full disclosure:I DO NOT work for a rail line). There is no reason why a truck should have to make a run of more than a hundred miles (with some exceptions in extreme rural areas) much less a cross country haul. There should be a more robust hub and spoke system of rail yards that feed the trucking system. Then maybe with much fewer long hauls and more opportunity to be home most nights more people would want to drive trucks.
    There are several things that private industry can do on their own to try and lessen the impact but the bottom line is the feds and states have to get involved because they own the 80% of this Pareto chart. Otherwise everyone is just spinning their wheels (no pun intended). Unfortunately that won’t happen until either the lobbyists start caring about it or the voters decide to get involved. If they don’t get involved until after the crisis has hit then the “great recession” will look like kid’s play compared to the effect this will have on the economy.

    • Kayla Sperry

      Agree 100%

    • ron

      There are so many flaws in this response it is hard to know where to start. The trucking industry is continually under assault from the state and federal gives that font seem to understand the impact of their actions. The current situation regarding hiring drivers is so cumbersome based on dot requirement, the insurance companies acceptance

      • ron

        Rates, is already pushing drivers from the market. Unethical individuals and companies also make it one of the most challenging businesses. To think the drivers will be able to survive in an environment where they only drive in a 100 mile radius is improbable. The shipping rates to keep drivers trucks operating would push the price of product up substantially. Not to mention the building of a rail infrastructure that would be capable of moving goods

        • ron

          Would take decades, the upkeep and management would be unsustainable. Imagine a rail network that operates like the current airline industry. Now multiply I by 100 or more. Keep in mind planes fly at different altitudes with space to operate around each other. Trains run on fixed rails with a large number of cars
          Being driven by one engine. Shippers would need to allot more time to get good from manufacture to warehouse to market and would have to undo much of the streaming of the supply chain just to guarantee their products get to market. If we want to impact the looming transportation issues that are racing toward us, we need to look at relaxing some of the CSA regulations. It is forcing good drivers out of the system. The grading system for companies and drivers are so complex you need to be Albert Einstein to understand it. Also, the negative points are held against the companies well after corrective actions have been made and just paralyze the safety departments and make it difficult to get a driver approved… Truckers also need lower fuel prices to ensure they can run profitably and have enough money to pay their bills and fix their equipment to ensure safety. I guess what I am trying to say is, rail is not and probably will never be the fix for the transportation industry. It is currently one critical component to a very complex system that requires millions of people to keep it functioning. Without this system, manufacturers would not be able to get their product to market, people would not be able to purchase the items they want and need, and the economy would come to a grinding stop. There needs to be common sense adjustments that can help improve the industry. Everything else is just utopian fodder that can not be build and wil never happen.

  • Good research, nice post sharing we keep reading your blog and get some amazing things here.

  • GeeGee

    The problem with the lack of drivers is the citations given to drivers, the drivers with old DUI/DWI with first time offenses are being treated like they have committed a felony.
    Felons, with first offense are being treated like they are not worthy of forgiveness, and a second chance to demonstrate rehabilitation.
    Women’s aren’t really designed to cover all the areas of the commercial truck driver industry, drivers are getting overcharged to be operators in the industry.
    Why is everyone acting like they don’t know why there aren’t more freight operators, beats me. There’s too many chiefs & not enough Indians. No offense. It’s just a figure of speech. When you’re constantly looking to judge potential candidates, you’re not going to be left much of choice to choose from. When you’re looking to be maticulas in every way LAW says, you see the crises transportation is going into. There should be forgiveness for any first time offenders whether misdemeanor or felony, you scar their records 7-10 years’ & cry you don’t have operators. DOT & law makers have gotten rediculis on how long they can scar an individual, your average Joe isn’t going to want to take the challenge the transportation industry is offering, and your first time offenders to not so serious crimes get crucified when their more than willing to comply with rules, regulations, DOT LAWS, and diligently provide a service that’s in demand!
    Can I get an AMEN!

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