Loaded and Rolling: House Hearing on Driver Shortage, Operation Open Roads, Class 8 Used Truck Inflation

House Transportation Committee hearing on truck driver shortages

In remarks to the House Committee on Transportation and Infrastructure, MIT Professor David Correll recently outlined yearslong research conducted by the MIT Freightlab, detailing a chronic underutilization of the American truck driver. 

Below are some highlights and reporting from the event. Interestingly there was additional research regarding whether electronic logs can predict if a driver will quit. While the work is preliminary, it indicates long-haul drivers who stay with their employers do most of their driving on Tuesdays, Wednesdays and Thursdays, with fewer hours on weekends. 

Additionally, if you increase the pay or put them in a market with higher prices, drivers are incentivized to drive more on Fridays, Saturdays and Sundays, reflecting a possible surge capacity on the weekends. Anecdotally, however, many warehouses and distribution centers do not offer weekend freight appointments, or offer them in limited capacity. 

More bullet points

• Adding 18 minutes of drive time to each driver's day would erase the 80,000-driver shortage, per MIT's Correll.
• 40% of America's trucking capacity is left on the table each day, Correll told Congress. 
• "This chronic underutilization problem does not seem to be a function of what the drivers themselves do or don't do, but rather an unfortunate consequence of our conventions for scheduling and processing the pickup and delivery appointments," Correll said.
• Dwell remains a top problem, and MIT and U.S. Xpress teamed up to study driver efficiency.
• Correll, a research scientist who spent the past four years observing and talking to 4,000 OTR drivers, concluded that despite drivers having a potential 11 hours of driving time per day, the average driver he observed drove just 6.5 hours.
• Leaking hours — time when drivers cannot drive because they are waiting to be loaded or unloaded — is a core issue.

The bottom line

Utilization is key, but a major bottleneck may be the efficiency of shippers and receivers. I've frequently seen situations where unfavorable pickup or delivery times can waste half a driver's day in waiting (dwell) at the expense of his or her income.

I liked the recommendation of a standardized system of evaluation for American shippers that measures detention time and working conditions for truck drivers, allowing carriers to identify underperforming shippers and receivers. 

(Photo: Jim Allen/FreightWaves)

Operation Open Roads

Fourteen Republican governors signed an initiative to press the Biden administration to reduce federal regulations to fight supply chain delays. The governors are from Tennessee, Arizona, Florida, Georgia, Idaho, Iowa, Maryland, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina and Texas. 

Key points:

Participating governors call on the Biden administration to join in Operation Open Roads by suspending what they consider burdensome regulations, including, at the federal level:

• Lowering the age requirement for a CDL holder to move freight across state lines to 18 years old. 
• Suspending the federal mandate for COVID-19 vaccines for all private employees, specifically for trucking and transportation. 
• Reviewing and revising any federal policies that deter use or domestic manufacturing of essential transportation equipment, including intermodal containers, chassis, and automobiles, trucks and tractor trailers. 

State actions:

• Modifying weight, size or load restrictions on state roads and adjusting hours-of-service constraints to provide truck drivers more time and flexibility.
• Deregulating education and occupational licensure barriers. 
• Improving connectivity and data sharing among shippers and receivers at ports, distribution points, storage facilities and other intrastate corridors for the expedited loading, unloading and transport of freight. 
• Coastal port states committing to increase tonnage capacity, and accepting more Panamax ships waiting off the West Coast.

My take: 

The supply chain is fragmented and chaotic, with a major challenge being the lack of labor, as well as bottlenecks at ports, warehouses and distribution centers causing additional delays. 

Adjusting the CDL age to 18 years for hauling across state lines could introduce more capacity into the market; however a CDL school takes on average seven weeks, can cost upwards of $8,000 and requires a finishing program at the trucking company to be upgraded to drive without a trainer present. 

Overall, I believe the biggest challenge is time itself, with tractor utilization taking a hit due to delays at pickup or delivery, delays due to lack of spare parts, and delays with trailers due to detention or using loaded trailers as storage. Increase utilization, and you increase shipments hauled and restocking of inventory. 

Market Update: Used truck price inflation continues to rise

(Source: ACT Research)

J.D. Power's benchmark for truck costs increased 89.9% year over year at auction. Large backlogs, longer lead times and a supply chain shortage of semiconductors stretch delivery times a year from the date an order is placed. 

Steve Tam, vice president of ACT Research, told FreightWaves: "Many of the fleets we have spoken to are in an excess-capacity situation" with no one to drive trucks they do have. That said, they have equipment on order and are frustrated with the delivery delays. Some fleets who are not traditionally used truck buyers are turning to the secondary market to find equipment." 

Compared to September 2021, October's average Class 8 prices are below: 

Model year 2020: $134,178; up 2.6%.

Model year 2019: $107,725; up 3.3%. 

Model year 2018: $86,401; up 1.3%. 

Model year 2017: $72,682; up 3.8%.

Model year 2016: $55,904; up 0.3%.

The Routing Guide: Links from around the web

Ocean shipping extreme consolidation could prolong the supply chain delays (FreightWaves)

ELD update: 3G-reliant ELDs set to be phased out per FMCSA (FreightWaves)

Challenges of trucking tech, TrailerTails and fuel savings (Commercial Carrier Journal)

Article on over-the-road trucking turnover (MIT Freightlab)

Supply and demand, how Today's Shortages Could Soon Become Tomorrow's Gluts (The Wall Street Journal)

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Image Sourced from Pixabay