There is a problem brewing at your warehouse and threatens to create huge problems in a few short years. No, it is not a matter of automation or the lack thereof. Nor is it related having the correct rack products, although the right racks do improve efficiency at the loading dock and in the warehouse.
No, the problem starts at your company’s loading docks and the vehicles there to transport loads. It is the future of truck transportation.
The trucking industry is facing a serious two-fold threat to its industry and the consequences send shudders all the way to the corporate boardroom.
Not enough trucks
The current demand for trucks is at or near an all-time high. A Wall Street Journal article from July indicated truck orders reached an unheard of 42,200 in June, considered by many in the industry as a down time for purchasing.
This has created more than a six-month backlog from time of order to delivery. The soonest most will see any of these trucks is early 2019.
That creates problems for a strong economy. The overseas supply chain compounded the shortage earlier this year.
Most small items used in the manufacture of the large trucks such as bulbs, screws and similar products still come from outside the United States. Many supply the same manufacturers here.
When the demand picked up from all truck manufacturers at the same time, these overseas companies were unable to ramp up production quickly enough to satisfy demand.
That delay snowballed creating bigger backlogs for trucks.
Bigger problem: finding drivers
While this issue will cause short-term problems, a larger, more potentially devastating issue continues to grow with little hope for any fix. That problem is the shortage of long-haul drivers.
There are more loads waiting on loading docks for shipment than there are drivers available. Fleet Owner, the trade publication of the trucking industry stated the industry had more than 50,000 open positions and that was a year ago.
Projections are that in five years that number will reach 250,000. The age of the typical truck driver is 55 years and getting older.
Because of the shortage, today’s truckers often have the luxury of choosing the load they want. This is particularly true of flatbed truck drivers where there are a dozen jobs for every qualified driver.
Those jobs requiring them to waste precious driving time or other less-than-desirable traits can go undelivered for weeks.
Efforts to hire more truckers have been ongoing for the past several years. But the economy is affecting that too.
The hours are long, very regulated and the pay now is comparable to that of many factory workers. Therefore, many opt to stay at home instead of being on the road for days.
The shortage in the trucking industry affects every commodity from food to manufactured parts. On-time delivery of products transported around the country changed from “I want it now,” to “when can I get it.”
The industry is trying to find short-term workarounds, but the bottom line is delivery times will be longer.
Many trucking companies are increasing the pay to attract more drivers.
Companies are concentrating on veterans leaving military service and women as possible sources of new employees.
Some are even relying on the Uber-style driverless trucks, but unfortunately, that has many obstacles to overcome.
So what is a company to do?
First, identify, the type of shipping you need. Do you regularly ship full loads or are most less-than-load (LTL) shipments? Both offer advantages and challenges.
If your product is time-sensitive and you are able, try to work with the same trucking companies and become a preferred customer.
These companies look for customers that ship regularly and often give preferred treatment as opposed to those who have a need once or twice a month.
Look for establishing long-term agreements with shipping companies. These agreements not only provide preferential treatment, a contract also insulates you from spikes in rates over the agreed period of time.
Finally, make it easy for the trucker. Have the order on the loading dock, ready to go.
The less time spent at your dock means more money for them. Doing this may require a serious look to streamline the warehouse for optimal racking and storage.