By Jack Porter, TPP Managing Director & “The Trucking Activist”
As I see it, it looks like we are going into one of those new “roller coaster” trucking capacity situations for the transportation and shipping community to manage through. If you have been around trucking for more than four years, you have lived these wild oscillations of supply and demand in trucking. While we can review the supply and demand charts going back to deregulation in the 80’s, however, the most recent historical imprint is reflective from the 2016 freight recession to the 2018 freight boom, and now coming out of another freight recession in 2019.
Often the transportation pundits, and many of the carrier shareholders blame the wild swings on truck capacity in the market. These wild capacity swings are usually linked to truck and trailer purchases. I will submit that this is a human challenge, and most directly linked to our professional driver community.
Let’s first review the truck driver job description. Imagine posting this job description for any member of staff.:
“Job requires up to 70 hours of work per week, in addition work from home and living in an 8’ x 12’ room is mandatory. You will be monitored electronically for compliance to a strict work and break schedule, in addition your performance will be documented by cameras. You will be compensated by full commission according to miles traveled, not hours worked. Most importantly, you need to be drug free.”
How many receptionists will apply for that description? However, every day these professional truck drivers do their job, and they also act as humans when the supply and demand is in their favor.
During the high supply and low demand markets, the drivers, and especially the independent contractors, need to drive more hours to meet their monetary needs due to reduced freight rates in the market. Then the reverse happens when the shift moves to higher rates, thus less need to drive the 70 hours/week, every week to meet their monetary needs. I submit to you, that the capacity in trucking is the driver community, and the result of just plain human reactions to hard work. If I can make 25-30% more money in a peek market, I can work less hours and be more particular about the loads I chose. When the reverse happens during the trough market, I need to work more and have less opportunity to choose my loads. This is a self-fulfilling economic truism in trucking, that leads to the huge swings in supply and demand and freight rates. Inside the walls of the carrier, this availability metric is key to their success in fulfilling their shipper needs, however, inside the 93% of the Fleets that have less than 20 trucks, this is a lifestyle work-life balance decision.
The driver has always been the capacity thermostat. They have an extremely hard job; they are not robots. They have families, dreams, goals, and a passion for their career choice! The more this industry; Fleets, Shippers, Receivers, 3PL’s, Brokers, Software Engineers, Truck Manufacturers, Truck and Trailer Dealers, Truck Stop Personnel, Insurance Agents, Doctors and Nurses, Law Enforcement, Lawyers, and Congress realize the importance of these folks, the higher these freight swings will continue. Some solutions in future commentary.
