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Trucking Trends: Remember the truck driver shortage? It's back

By Dean Croke, DAT Solutions

With more of us at home for work, school, and entertainment, demand for electronic equipment has skyrocketed. For example, global shipments of televisions hit a historic high in the third quarter of this year. According to TrendForce, a market research firm, more than 62 million TVs were shipped in July, August, and September, a 38% increase compared to Q2 and 13% more year over year. Roughly 65% of that volume landed in Los Angeles.

This is just one way the pandemic has increased demand for certain commodities and driven truckload volumes higher in specific markets and lanes in ways we're just not used to seeing.

According to the September Pulse Signal report from the Freight Market Intelligence Consortium, overall freight volumes are actually down 3% year over year. But some sectors such as retail and consumer packaged goods have seen volumes up 10% compared to 2019 while manufacturers and other industrial shippers are experiencing the exact opposite.

These supply chain imbalances affect decisions about how carriers, freight brokers, and shippers manage trucks as they try to cover new lanes and unanticipated loads.

There's another factor in the availability of capacity: truck drivers.

Tight capacity

Jason Miller, associate professor of logistics at Michigan State University, produces a monthly Trucking Capacity Tightness Index to indicate the availability of trucks. The Index was at record high levels in August, Miller said, but the lack of capacity isn't due to gains in demand so much as it's driven by a decline in trucking employment.

There are many reasons why drivers are harder to find.

The job itself involves a high potential of COVID exposure including close contact with workers at docks and truck stops. Driver training programs have limited their enrollment and put social distancing in place.

The federal Drug and Alcohol Clearinghouse, the

database of driver drug and alcohol program violations, opened in January and more than 34,000 drivers are in "prohibited status" as of Oct. 1. Three quarters of those drivers have not yet started the return-to-duty process.

Thinking local

Some long-haul drivers are shifting to regional, local, and last-mile delivery jobs where they can be closer to home.

According to the U.S. Bureau of Labor Statistics, employment at local trucking companies increased 7.4 percent between its low point in April through July, the last month for which data are available. Long-distance trucking employment hit its low point this year in May and rose just 1.3 percent from then through July. Compared with July 2019, unadjusted long-distance trucking employment was down 6.4 percent.

A shortage of qualified drivers may in part explain record levels of spot market activity where asset-based carriers have been unable to meet their contracted commitments on existing lanes. When carriers can't provide sufficient capacity, shippers are going deeper into their routing guides or utilizing the spot market.

How long will this capacity crunch last? The answer is on everyone's wish list at least for the holidays. Capacity will eventually catch up to demand but for the moment market equilibrium is way down the road.

Dean Croke is principal analyst at DAT iQ, the freight data and analytics operation at DAT Solutions. He brings 35 years of experience in the fields of data science, supply chain management, risk management, and human performance. For the latest market updates related to COVID-19, visit dat.com/industry-trends/covid-19 and follow @LoadBoards on Twitter.