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Wednesday, February 1, 2023

In This Shippers Market, Truckers Hold The Power


Thanks to surging freight demand and a shortage of drivers, trucking carriers are turning the tables on shippers.

Going the way of The Dodo are the days when shippers used reliability scorecards to reject some truckers and kept others waiting for hours with no place to take a break but portable canopies and grimy restrooms.

The increased leverage that trucking companies have is applying added pressure to cargo costs, bolstering demand as a driver shortage looms. With first-quarter trucking spot rates up 27 percent from a year earlier, according to Bloomberg Intelligence, freight expenses are crimping profits at companies from 3M Co. to General Mills Inc.

The U.S. has about 280,000 fewer truck drivers than it needs, a shortfall that’s grown rapidly from 78,000 about two years ago, according to estimates by FTR Transportation Intelligence. The number of available trucks got worse in April as regulators stepped up enforcement of limits on driver hours.

Such pressures have prompted customers to go the extra mile to make sure they can get drivers when they need them, whether by sprucing up break areas or taking steps to speed truck turnaround.

Some say part of the solution lies with the shippers. If shippers processed cargo more quickly, they could free up freight capacity as much as 20 percent, said Bob Costello, an economist with the American Trucking Associations trade group.

Another way to speed up the process is to enable a driver to drop a trailer at a shipping yard and hook up another that’s already loaded, even before the first is emptied. That requires customers to provide space for parking the extra trailer and its own drivers to maneuver equipment into position.

Nestle boosted such drop-and-hook operations at its U.S. water unit and, along with other efforts, such as putting radio transmitters on trailers to locate them more quickly and making signage consistent across its yards, helped cut loading and unloading time by 18 percent.

“We need drivers to be driving and not looking for trailers and not waiting at locations to get unloaded or loaded,” said Ken Rogers, the unit’s director of transportation. But not all Nestle facilities have the space for drop-and-hook operations, so the Swiss food and beverage giant also has made driver waiting areas more pleasant, with coffee, bottled water and a television.  Wouldn’t it be wonderful if all shippers treated truck drivers as this, the truth is most shippers/receivers haven’t got the memo. 

“We don’t ever want to lose a carrier because they feel like they’re being abused on the receiver side,” Rogers added.

For shippers, the costs of improving operations pay for themselves, said Ben Cubitt, chief of engineering and procurement for Transplace, a logistics consulting firm. “If you’ve been a good partner through thick and thin, you’re definitely suffering less in this tough market than other shippers.”