Shipping costs continue to increase throughout the country in 2018, even affecting industry giants like Amazon, General Mills, and Walmart. These increases are being passed down to the consumer via increased prices of everyday goods. One of the main reasons for increased shipping costs – a nationwide driver shortage that shows no signs of getting better.
While the economy is doing well, the trucking industry cannot keep up with the demand. Ask any transportation company why costs are going up they will tell you the same thing. Regardless of how much a load pays a driver, there just are not enough available to move the freight customers need as quickly as they need it moved. Driver shortages in America have been an issue for years, but never to this degree. With low national unemployment rates the pool of potential drivers is at a low point, and many are not interested in the job.
Most millennials are not interested in being truckers because of the long hours, stressful work environment, and isolation that can come with the job. Along with these factors, many do not see a future in the industry, as self-driving trucks from Waymo and Uber inch closer and closer to becoming a reality. While these trucks are still years away from being a regular occurrence on the road, inroads are being made, as Waymo just launched a self-driving tractor pilot program in Atlanta.
The Electronic Log Mandate going into effect across the country is also causing existing drivers to drive fewer miles, as they are now federally mandated to be able to be on the road for no more than 11 hours at a time. New required electric logging devices also stop less scrupulous drivers from lying about their drive time on the road. While these devices increase safety, they have cut down on how much freight is moved across the country.
With the driver shortage as it is, one of the most effective tactics companies have to hire and retain new drivers is to raise driver pay and provide additional benefits. While this is good for the driver, it is bad for everyone else, as the higher driver pay causes an increase in operating costs for the trucking company, which causes higher shipping rates for trucking company clients, which causes higher prices for the everyday person shopping at the grocery store or local mall.
While no one is a fan of higher store prices, it is the reality of today’s world. Online shopping and the retail industry continue to outpace the rest of the economy, especially the transportation industry. This is the reality of the world we live in, and higher prices of everyday goods may just be the new norm. Inflation has remained low over the past decade because companies found ways to be more efficient in their daily operations, offsetting their rising operating costs. That is not something that can continue to happen forever, and we are now only beginning to understand how that will affect the rest of the economy.
-Ian Bell-Tags: logistics, transportation, trucking