Fleet Trends that Will Shape 2018
The year 2017 brought a lot of changes and challenges to the transportation industry and others that relied on distribution. Overall, the electronic logging device (ELD) implementation, driver shortage, and weather events affected multiple facets of transportation. Rates rose significantly and companies struggled to obtain the necessary capacity. Those challenges are still big players in 2018, setting the course for another interesting year in transportation. We recently sat down with Brian Webb, senior vice president of J.B. Hunt Dedicated Contract Services (DCS), to discuss how fleets are affected by these changes.
1. It seems like every day there’s a new article about the driver shortage. What’s your viewpoint on the driver shortage and the industry?
Any business that uses or operates a fleet is feeling the effects of the driver shortage, but this isn’t a new problem, so the issue is more than a driver shortage. It’s a lack of qualified drivers in a changing economy and regulatory environment. The current driver workforce is aging with an average age of 49, and the industry isn’t as appealing to younger generations as it once was. With a stronger economy, there are more jobs closer to home that don’t involve driving a truck. The gig economy is also attracting potential drivers for other work where they can set the hours. All of these factors are affecting the ability to recruit and retain quality drivers.
2. Electronic logging devices (ELD) are a major topic right now; what is the biggest adjustment companies are making while working toward compliance?
The impact of ELDs goes beyond having or not having one. Some companies thought they were compliant with hours of service and after implementation of ELDs then discovered that was not the case. Companies that evaluated routes and hours of service before installing ELDs are in a better spot than others; however, the mandate is causing most companies to rethink fleet strategy, regardless of preparedness. Companies are realizing fleet capabilities have changed, and recovering hours is a lot different in the transportation world. A driver can’t easily cover a shift or pick up where another left off. Each driver has a set limit of hours per day, and once that time is up – that’s (legally) it whether you’re 30 minutes from home, stuck at a receiver, or in the middle of a delivery.
3. The capacity market hit unprecedented tightness recently. How does the current freight environment affect the capacity market?
At some point, most fleets require additional capacity, and the 2017 capacity market hit record high load-to-truck ratios due to the ELD mandate, lack of qualified drivers, and weather effects. Those challenges were part of a perfect storm that is still going. As a result, the capacity that is available comes at a higher cost. At the same time, customer volumes and service expectations are increasing. Capacity will further worsen once the phased-in approach for ELDs is over, and more drivers will be struggling to reach pre-ELD productivity levels. One thing is for sure – shippers should adopt best practices to minimize driver load, unload, and wait times. This helps mitigate the effects of a tight market by improving productivity. It’s a win-win situation, because drivers can get moving faster and businesses can become a shipper of choice. In a world of two-day consumer deliveries, speed and precision are everything. Companies are requiring an unparalleled level of visibility, communications, and empathy with the end user.
Providers are being tasked with more responsibilities in an environment with less flexibility. This level of precision is best achieved by a fleet, whether it’s private or outsourced. Adopting a private fleet or eliminating the hassles altogether with outsourced transportation is a big talking point for 2018 and beyond. Many companies are considering the use of dedicated fleets as part of their overall supply chain strategy. Contact the J.B. Hunt DCS team – 1.800.325.1068 or firstname.lastname@example.org – for more information about our outsourcing strategy.