Capacity and Pricing Issues

For the last few months we have been bombarded with an increased number of quote requests, work orders and clients begging us to take freight at a premium price.  On January 10th, 2018, Jason Hilsenbeck, from and, wrote in an email to many drayman in Savannah "If you phone and email have been blowing up, Savannah metro is 2nd highest in demand for entire country."  Many people are interested in understanding what is going on.  Below is a summary of the reasons we are experiencing capacity issues.

1) Driver shortage - The for-hire trucking industry is facing a shortage of drivers.  Estimated shortages are roughly 50,000 drivers.  Reasons include regulatory issues, lack of home time, stagnant pay, lack of respect, rigid delivery schedules and inadequate equipment.

  • Regulatory Issues - On December 18, 2017 every driver that travels more than 100 air miles in a day or has a 2000 model or newer truck is required to have a device installed in the truck that tracks all of their drive time.  Prior to this, drivers kept paper logs.  Many drivers are not familiar with this technology and chose to exit the business because they lack the training necessary to work with the new system.  Many drivers see this as an invasion of privacy and have chose to find other work.  Many drivers believe that this will prevent them from being as productive and chose to leave to pursue other opportunities.  In some cases, drivers feel that the rigid computers will cause them to spend more time on the road and if they aren't going to have adequate home time then they prefer to driver over the road domestically and make more per mile than regionally with containers.
  • Stagnant Pay - in the past 11 years a McDonald's employee has seen a 94% pay increase, the minimum wage has increased over 45% and for-hire drivers have seen a 6.3% pay increase.  The failure to increase wages has created a situation in which new drivers have no incentive to enter the industry, thus a pool of qualified individuals to enter the industry has not be available to replace the drivers that retire or leave.  Add to this that drivers often have times of irregular income from month to month and it makes it difficult to stay dedicated to the industry.  Take into account that most companies will not utilize drivers unless they have 18 months of experience and you are looking at a long time before we can recover from the low wages and lack of new drivers.  
  • Rigid delivery schedules - Many shippers and receivers schedule the trucks based on labor and if a driver is delayed shippers and receivers are often not very accommodating and sometimes require the driver to wait overnight or even days to be unloaded.  This causes down time and lost wages.  As much as a driver can plan properly, they are moving on 18 wheels and tire issues are frequent and trucks can break down.  Traffic issues are increasing every year as more drivers are on the road driving down productivity. 
  • Chassis Shortages - Over the last few months our drivers have frequently sent us pictures of a bare chassis field at GPA.  We have had times where drivers have waited over an hour to find an available chassis and many drivers refuse to go into the port and look because they know there just isn't equipment available and they are wasting their time.  Besides heavy volumes, the other reason this is an issue is that many customers consider "demurrage" a dirty word and would rather have the container pulled out and held on the yard to incur per diem than stay in the port past free time.  I assume they prefer this method because demurrage must be paid before a container can be picked up where as the trucker gets the per diem invoice so it buys them time since the trucker often doesn't get invoiced for per diem for 30 days and then after the trucker invoices the client they get another 30 days to pay creating a 60 day delay in spending the funds for storage.  The issue with this is that it causes chassis to be stagnant waiting for containers to be delivered and not turned to make the next move.    

2) Record Import and Export  Volumes

  • In December 2017, the U.S. imported $210.8 billion of cargo, increasing 2.88% from November. The November imports of goods ($209.3 billion), foods, feeds, & beverages ($11.9 billion), capital goods ($57.2 billion) consumer goods ($55.5 billion) and non-petroleum imports ($193.5 billion) were the highest on record. (Source: US Census)
  • In December 2017, the U.S. exported $137.5 billion of cargo, increasing 2.54% from November. The December export of capital goods ($47.4 billion) were the highest on record. (Source: US Census)
  • Total annual container trade at the GPA has increased 31% from 2,949,449 TEU (twenty foot equivalent units) in 2013 to over 3,851,743 TEUs in 2017.  

3) Truckload Rates Increasing

  • When truckload rates increase we see a shift of drivers working with the intermodal industry to chase the money in the domestic sector.  Within the last year we have seen rates within the domestic sector increase over 30%.  

More Resources

New Report Says National Shortage of Truck Drivers to Reach 50,000 This Year - Industry Needs to Hire Roughly 90,000 New Drivers Annually to Meet Demand  - October 20, 2017 -,000-This-Year

Drivers Shortage, ELD Rule Top Trucking Industry Concerns - Jerry Hirsch October 23, 2017 -

Logistics Industry Report 2017-2018 - Nov 20, 2017 -