The national unemployment rate in the United States has been at a steady 4.8 percent since January. Last year, trucking companies added nearly 19,000 jobs between the months of June and December. However, roughly 1,400 positions were dropped by for-hire trucking companies, and the trucking industry saw an overall decrease of roughly 4,000 jobs at the beginning of the year. Hiring truck drivers is a big challenge for the freight industry as a whole, this year. Yet the lack of truck drivers has even larger consequences.
Increased Demand For Hiring Truck Drivers
With a decrease in truck drivers, there is a greater number of orders looking for shippers. The shipping industry is feeling a strain to cover these orders, but the lack of drivers means stacking trips and pulling longer hauls in order to prevent a loss in sales. But the increase in demand for truck drivers might also negatively impact shippers.
The Cost Of Shipping
Keeping truck drivers on the payroll while expecting them to haul more, in order to meet the demands of customers also has its own set of problems. The pay rates may increase for the truck drivers to deliver the overflow of shipments on time, but the cost may get shifted to the customers. In an extremely competitive industry, keeping shipping prices low for private sector deliveries allows fleets to make sales. If the cost of operations increases due to a lack of available drives, the money has to come from somewhere.
An Increase In Unpaid Invoices
Open invoices are still a major hurdle for the trucking industry, at large, and fleets need working capital to keep things moving until jobs are filled across the country. In order to ease the strain on cash flow, more fleets are turning to freight bill factoring to free up working capital to pay existing drivers to make more deliveries. Instead of waiting on payments from customers, freight fill factoring converts bills of lading into cash within 24 hours. This allows fleets to move onto the next job without having to worry about a strain on finances.
There Is Hope!
By and large, many analysts believe this decline in truck drivers is very temporary. Previously, when the construction and retail industries saw and increase, the shipping industry shortly followed. In January, the retail industry added 46,000 new jobs, and the construction industry increased by 36,000 jobs – a record high since 2008. These increases should ring in a new group of truck drivers with the right qualifications to offset the strain the shipping industry is currently experiencing, and lead to signs of growth starting in the next quarter.