Truck Driver Shortage Reaching Crisis Levels for Mills
Originally published by: Woodworking Network — July 9, 2018
by Robert Dalheim
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In the American Transportation Research Institute’s annual industry issues report for 2017, driver shortage topped the list of critical issues facing the industry for the first time since 2006. The industry was around 51,000 drivers short in 2017 - up from 36,000 in 2016 - and that number is projected to increase to a whopping 174,000 by 2026.
As virtually every segment of the economy grows, and online sales continue to soar across many industries, the demand for truck drivers is extreme. Shipping expenses are at an all-time high: it costs more than $1.85 a mile to ship a dry, non-refrigerated good. That's an increase of nearly 40 percent from a year ago, according to data from DAT Solutions.
Businesses are compensating by increasing driver wages and getting them home more often.
"It's as bad as it's ever been to find drivers," Bob Costello, chief economist at the American Trucking Association, told the Washington Post. "Companies are doing everything they can to make drivers happy: increasing pay and getting them home more often, but that means they aren't driving as many miles."
Many wood products companies have reported that the shortage of drivers is directly responsible for their own fourth-quarter shortages, according to the Hardwood Distributors Association (HDA). Some are seeing significant impacts to capacity levels due to inability to efficiently transport materials.
Montreal-based Resolute Forest Products' lack of drivers impeded its ability to ship lumber from its sawmills to its paper plants, said now-retired CEO Richard Garneau. Garneau said truck driver shortages caused production slowdowns, which along with restructuring in its specialty operations, reduced volume and increased distribution costs.
Arkansas-based Anthony Timberlands CEO Steve Anthony told Arkansas Business that its product is just sitting on the shelf. Anthony said he can't find any trucks. Anthony said that despite seeing the strongest market in his lifetime - with robust prices and surging demand - he has been unable to reap rewards.
Low unemployment, uninterested young people, the advent of self-driving trucks, and new and required implementations all seem to be factors.
New requirements could also be playing a role.
HDA says the required implementation of electronic logging devices (ELDs) in fleet trucks has been on the minds of both suppliers and customers across many industries. As of December 2017, drivers are required to use ELDs instead of traditional paper logging devices. ELDs monitor duration of engine operation and mileage driven, among other information.
The change to ELD as a standard has certainly introduced some new challenges. HDA says they include installation costs, a learning curve, productivity loss and longer lead times. Advantages however, include a safer work environment, fewer errors, and increased customer service over time.
So what does this mean?
"In the short term, hardwood lumber is moving slower," says the HDA in a website blog. "Whether a company is running their own fleet or using independent drivers, everyone is still adjusting to the changes that accompany the new ELD requirements. In addition, we are seeing trucking costs increase as low trucking availability works against a learning curve for everyone involved.
Over time, this should lead to positive opportunities for those who choose to look for ways to use ELDs to work smarter and more efficiently over time. In the meantime, no matter your role in the hardwood lumber industry, have patience while we all learn together."
The HDA projects that the wood product industry will need to hire 898,000 drivers over the next decade to keep up with demand and to replace a retiring workforce. That means attracting a younger demographic is critical.
That, or self-driving trucks will eliminate the need for real drivers. We will see.