Good News For Us

Posted on 09-02-2006

I almost quoted the entire article it was so good.

Driver shortage creates quandary for trucking.
On the one hand, a lack of drivers is restricting the ability of
trucking companies to expand and meet current freight volumes. Yet that
same lack of drivers results in tight capacity, which is allowing
fleets in many cases to get higher rates from customers and reject
unprofitable business.

“We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers,” he continued. “Assuming a continuation of the current freight environment, where growth in freight demand has exceeded increases in truckload capacity, we believe there will be opportunities to continue to raise freight rates faster than cost increases. Consequently, we continue to be confident in our ability to move to a 90% operating ratio or better.”

“A solid U.S. economy and a favorable relationship between shipping demand and truckload capacity contributed to a 5.9% increase in our average revenue per loaded mile,” noted Kevin Knight, chairman & CEO of Phoenix-based Knight Transportation.

Bottom line of the article - Rates are going up, salaries are going up. It’s definitely worth a read. Of course they couldn’t leave without mentioning the Driver Shortage -

“The driver recruiting and retention market remains more challenging
than ever,” said Clarence Werner, chairman, president & CEO of
Omaha, NE-based Werner Enterprises. “The supply of qualified truck
drivers continues to be constrained due to alternative jobs to truck
driving that are available in today’s economy. Yet we believe that a
solid freight shipping market … combined with extremely tight truck
capacity is [maintaining] a strong freight market.”

So, they’re saying the dreaded driver shortage is stopping them from making more money, but the driver shortage enables them to make more money. After years of whining about a driver shortage, everyone is beginning to see the light.

I’m now announcing I’m available for consulting positions. Want to know how to raise rates? Solve the Driver Shortage? How about solving your driver retention problems? My email is on the left side. The earliest I could find where I said that on the web, was my first post about the Driver Shortage about my letter to the editor of RoadstarOnline in 2003. I need to stop giving away the solutions for free!

They either don’t realize or maybe they forget that more drivers will drive rates down. Or maybe they’re just greedy bastards that want it all.

Comments

Mike Masters on 21 February, 2006 at 6:44 am #

Over 12,000 trucking companies went belly up after the summer of 2000… mine was one of them, Trism, Inc., the companies remaining today have a lot of making up to do… a barren treasure chest to fill for another rainy day… and they are going to milk it for what it’s worth.

The good thing is — it’s nice that the trucking companies are controlling their capacity & they are driving the Bus. Now, the shippers are pleading & begging for capacity and behaving much, much kinder & nicer– it’s kinda like when the Southern Colonel’s lost their rights to own slaves… they had to be nice to their slaves in order to keep them from running off to Greener Pastures elsewhere.

Capacity is the Achilles Heel that broke many of us… we were too vain & stupid to respond earlier to the market conditions.

In other words, if my main diet is Fur Seals and I am a Great White… and some event diminishes my Fur Seals down to half or less of their population— then my Great White Brothers & Sisters had better Move On or be Eaten by the Clan… or worse yet, by Killer Whales as the likes of CIT, Merrill Lynch, & Wall Street.

Cheers!
M

wayne on 21 February, 2006 at 10:39 am #

Glad to see someone that knows way more than I do agree with what’s going on here. I agree with everything except that I don’t think any company is purposely controlling capacity. I believe they’re still as greedy as ever and if there were enough drivers to support their stupidity we’d be back where we were several years ago.