ILMA Compoundings - June 2021 - 25
T
he driver shortage, consumer spending on goods, a
red-hot housing market, a reaccelerating manufacturing
sector and pent-up inventories are increasing
freight demand, creating tight capacity in the trucking
industry and driving shipping rates higher.
" There are some substantive capacity constraints in the
market right now, " said Kenny Vieth, president of ACT
Research. " The bad news, if you're a purchaser of transportation
services, is your costs are going to be up as we move
through 2021 and even into 2022. "
Bob Costello, chief economist for American Trucking
Associations (ATA), said that both the contract and the spot
markets have experienced increased rates. " However, it is
important to note that most of the gains are being given to
drivers in the form of higher pay, " he said.
Costello said capacity remains tight due to solid freight
demand and a limited driver market. " In general, I expect
freight volumes to be good for a host of reasons, including
additional economic stimulus and more vaccinations, " he said.
Sean Hillard, business development manager for trucking
company BRT Inc., said the past nine months have been
the tightest capacity he has seen. " This has put some upward
pressure on rates in the spot market, " he said.
THE FREIGHT MARKET
Even without injecting stimulus or infrastructure into the
discussion, there is a lot to like about freight, the carrier
profit outlook and the commercial vehicle demand landscape,
Vieth said.
IHS Markit expects trucking to see strong gains this year
and said the economy could expand year-over-year by as
much as 5.7% due to consumer spending, the third stimulus
bill and increased COVID-19 vaccinations.
" E-commerce helped to support freight, avoiding a larger
collapse in Class 8 than would have otherwise been the
case, " Andrej Divis, director of global heavy-truck research
at IHS Markit, said during a virtual presentation on March
9. " We see strong gains and consumer spending, even
exceeding the top-line GDP numbers. Obviously, this is
going to drive freight. "
However, Divis cautioned that uncertainties remain.
" There are new variants that are out there. It's unclear how
quickly they're going to spread in the United States. It's
unclear how those are going to interact with the vaccines
over time. "
Ricky Adkins, senior supply chain logistics manager,
manufacturing, for Idemitsu Lubricants America Corp.,
said he has started to see the market ease slightly, but it is
still severely tight. He said the market started tightening last
year with changes to Department of Transportation (DOT)
regulations and the electronic logging mandate.
" This change, of course, revolved around the safety of the
truck drivers and other drivers on the road. The unintended
consequences are drivers can run less miles, which ultimately
reduces equipment availability in the market. This was also
the start of a reducing driver pool, " Adkins said, adding that
typically drivers are paid by the mile. " If you reduce the
number of miles they can run in a week, you reduce their
income opportunity. In order to attract new drivers, you
need that draw of the income opportunity. "
THE DRIVER SHORTAGE
ATA's Costello said the driver shortage is as bad as ever. " We
continue with the traditional shortage issues, like the high
average age of drivers and too few females. But we also have
new developments over the past year, including the Drug
and Alcohol Clearinghouse taking 50,000 drivers out of the
market, " he said.
Vieth said roughly two-thirds of those drivers who left due to
the clearinghouse have not started the return-to-duty process.
" I think that shippers will
begin to feel that pressure
in not just spot rates, but
contract rates as well, as
the industry brings wages
up to a level that brings new
drivers into the industry. "
Sean Hillard, Business Development
Manager, BRT Inc.
Hillard said high-quality drivers are definitely getting
harder to find, and the fleet is increasing wages to find them.
" We haven't needed to do too much in the way of wage
adjustments for [where] our over-the-road fleet was - we
already are above market - but we have seen significant
upward pressure on our local fleet, " he said. " We do expect
that to change in the near future, though, as the rest of the
industry catches up to us. "
BRT is working to find other areas to cut expenses so the
effect on shippers will be minimal, but the fleet is running
out of options. " I think that shippers will begin to feel that
pressure in not just spot rates, but contract rates as well,
as the industry brings wages up to a level that brings new
drivers into the industry, " Hillard said.
25
ILMA Compoundings - June 2021
Table of Contents for the Digital Edition of ILMA Compoundings - June 2021
ILMA Compoundings - June 2021 - Cover1
ILMA Compoundings - June 2021 - Cover2
ILMA Compoundings - June 2021 - 1
ILMA Compoundings - June 2021 - 2
ILMA Compoundings - June 2021 - 3
ILMA Compoundings - June 2021 - 4
ILMA Compoundings - June 2021 - 5
ILMA Compoundings - June 2021 - 6
ILMA Compoundings - June 2021 - 7
ILMA Compoundings - June 2021 - 8
ILMA Compoundings - June 2021 - 9
ILMA Compoundings - June 2021 - 10
ILMA Compoundings - June 2021 - 11
ILMA Compoundings - June 2021 - 12
ILMA Compoundings - June 2021 - 13
ILMA Compoundings - June 2021 - 14
ILMA Compoundings - June 2021 - 15
ILMA Compoundings - June 2021 - 16
ILMA Compoundings - June 2021 - 17
ILMA Compoundings - June 2021 - 18
ILMA Compoundings - June 2021 - 19
ILMA Compoundings - June 2021 - 20
ILMA Compoundings - June 2021 - 21
ILMA Compoundings - June 2021 - 22
ILMA Compoundings - June 2021 - 23
ILMA Compoundings - June 2021 - 24
ILMA Compoundings - June 2021 - 25
ILMA Compoundings - June 2021 - 26
ILMA Compoundings - June 2021 - 27
ILMA Compoundings - June 2021 - 28
ILMA Compoundings - June 2021 - 29
ILMA Compoundings - June 2021 - 30
ILMA Compoundings - June 2021 - 31
ILMA Compoundings - June 2021 - 32
ILMA Compoundings - June 2021 - 33
ILMA Compoundings - June 2021 - 34
ILMA Compoundings - June 2021 - 35
ILMA Compoundings - June 2021 - 36
ILMA Compoundings - June 2021 - 37
ILMA Compoundings - June 2021 - 38
ILMA Compoundings - June 2021 - 39
ILMA Compoundings - June 2021 - 40
ILMA Compoundings - June 2021 - 41
ILMA Compoundings - June 2021 - 42
ILMA Compoundings - June 2021 - 43
ILMA Compoundings - June 2021 - 44
ILMA Compoundings - June 2021 - 45
ILMA Compoundings - June 2021 - 46
ILMA Compoundings - June 2021 - 47
ILMA Compoundings - June 2021 - 48
ILMA Compoundings - June 2021 - Cover3
ILMA Compoundings - June 2021 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com