Predictions for transportation management in 2016 highlighted growing stress and concern. Carriers and shippers had to focus on compliance with regulations, optimizing existing and new resources and dealing with the trucking driver shortage. These trends held true throughout the year and led to innovative solutions, including greater emphasis on new technologies and software applications. As a result, you need to understand where the industry stands now compared to this time one year ago and why today’s facts might indicate easing tensions in the industry are around the corner.
Trucking Regulations Exploded in 2016.
There were many trucking regulations set to come up for discussion and possible passage by Congress in 2016, but the actual number supersedes even the modest of predictions. The electronic logging devices (ELD) mandate, which some thought might be repealed or delayed further, was only reiterated with a set compliance date of December 18, 2017, reports the Federal Motor Carrier Safety Administration (FMCSA). Four-hour break rules were narrowed to only occur between 1 a.m. and 5 a.m.
A drug and alcohol testing clearinghouse, reports JOC.com, also gained attention in 2016, further increasing the trucking driver shortage. Obviously, supply chain entities providing less-than-truckload and other modes of transportation do not want drivers under the influence of drugs or alcohol. But, think about the impact that a failed alcohol clearinghouse test could mean.
Driver A has a drink on Monday, a day he is not scheduled to drive. However, testing later that day shows a positive result for alcohol. Although he is within his legal right to have a drink, it should not have an impact his ability to drive while sober.
Some drivers may have problems with alcohol, but so long as they are not under the influence, any law requiring testing for substances will reduce the number of available drivers. Additionally, the databank in the clearinghouse might imply that drivers with a history of positive test results could lose future driving opportunities when carriers check the drivers’ information against records.
The outlook for 2017 with respect to this mandate is not likely to change either. The mandate for the clearing house and other critical trucking regulations were listed in the Moving Ahead for Progress in the 21st Century Act in 2012. So, its legislative nature is likely to remain in effect. Moreover, testing for sleep apnea and other sleep-deprived disorders can soon become reality for more drivers, further choking capacity in the industry. Yet, there are other regulations that went into effect in 2016, ranging from training requirements to the unified registration system, which reflects growing pressure on the industry as well.
Big Data Became Essential to Transportation Management.
Big data analysis and the transportation management system (TMS) were set to be paragons of improvement and perfection in 2016. However, data analytics have given carriers a chance to look at how dimensional pricing models and route consolidation can be optimized to improve efficiency and the flow of products. The following graphic shows the capabilities made possible through big data:
Now, the graphic seems omnipotent, but it highlights how big data can be leveraged to improve transportation management. According to Margaret Tedlie, big data is transforming how carriers and shippers operate on a fundamental level. They are better able to adjust pricing models to reflect consumers’ demands, including less packaging for smaller shipments, a key characteristic of dimensional pricing, and it enables record-low freight shipping.
With respect to payment auditing, shippers have realized the potential savings of simple auditing. However, auditing is a task that few carriers or shippers really want to deal with. It takes time, resources and may not pay off. But, third-party logistics providers (3PLs) that offer to audit as a value-added service are reaping the rewards, up to 5-percent reductions in overall freight shipping costs, reports John D. Schulz of Logistics Management. This is due to having dedicated professionals and advanced computer systems double-check billing. Essentially, this leads to profits and cost savings for both shippers and 3PLs.
The benefits of auditing also go beyond just preventing double billing, explains Inbound Logistics. It allows shippers to have better insight into a shipment’s status before, during and after transit. Ultimately, this translates to better visibility and customer satisfaction, which increases the likelihood of repeat orders and business growth.
The Trucking Driver Shortage Grew Worse…Maybe.
So, the trucking driver shortage is bad. By some accounts, the trucking driver shortage has reached 30,000, explains Smart Trucking. Within the next few years, that estimate could easily be more than 200,000. Meanwhile, drivers’ complaints continue. They demand higher pay. They want respect and privacy. They want to take advantage of new technology within reason, explains Wes Mayes of Omnitracks.
Ironically, these demands are almost overshadowed by mounting regulations and requirements. Some of the new regulations are directly at odds with privacy and respect. After all, who wants their personal lives, including having a drink or two on the weekends, brought into the workplace? To keep up with demand predictions by 2027, more than 97,000 new drivers will need to enter the industry annually.
This does not even consider the new limitations being placed on drivers, including the ELD mandate. Part of the luster in driving a truck is the ability to control one’s hours, in effect controlling one’s schedule and sense of career. But, the new mandates are stifling that concept, creating more stress on drivers to find better paying and more fulfilling opportunities.
The outlook is not completely barren. Autonomous driven trucks, “self-driving trucks,” were tested for the first time in September, reports Jeff Champa of Omnitracs, and enhanced TMS systems will continue to reduce demand. However, the recent holiday season indicates shopping is on the rise, and no one is forecasting recession-like attitudes in 2017. Meanwhile, drone delivery is emerging with Prime Air, and the shortage may not be as gloom-filled as some believe.
The Big Picture.
The pressure is on carriers and shippers to find ways to enhance capacity and address the trucking driver shortage, and more companies are doing just that. From implementing value-added 3PL partnerships to considering driverless alternatives, 2016 closed with a message of hope amidst grim tales from many.