Estimated 25,000 truck driving positions to go unfilled in 2013, who can fill them?

Take a look. Almost anywhere you look in the transportation industry, you will see some sort of report concerning the projected truck driver shortage. With the trucking industry well on the road to recovery from the recession, 2012 showed some favorable gains. According to the American Trucking Association, truckload activity was up 1 percent, truckload intermodal loads were up 20.1 percent and less-than-truckload tonnage increased 4.3 percent from 2011.

Predictions for 2013 show continued increases, but at a slower rate than 2012.

Overall, though, the shortage of truck drivers still looms. The industry will need more than 96,000 new drivers every year for the next 10 years, according to ATA, to offset lost drivers and older drivers getting out of the business. Fewer and fewer young people are moving into the industry as a way of life. An estimated 20,000 to 25,000 driving positions could go unfilled this year, according to projections.

So, where can the industry turn to fill the void?

Women.Rosie Riviter

According to statistics from 2008, 8.8 million people participated in one way or another in the trucking industry. Of those, only about 15 percent were female, of 1.3 million. That, however, involves the entire trucking industry, from offices to drivers.

There were about 3.4 million truck drivers in the United States in 2008, of which only about 166,000 were women. That comes down to about 4.9 percent of the total driver population.

The trucking industry has always been thought of as a predominantly male-dominated industry. The female presence in the industry, though, has been increasing over the past decade with more women drivers, owner and managers.

Several studies indicate that women are well-suited for leadership roles within companies. Those studies show that women are better at communication, engaging employees and overall planning than men. The same, I believe, would be true for the trucking industry and truck drivers. While the stigma of the industry stereotypically places a male behind the wheel of a big rig, women are well suited and perfectly capable of doing the same job.

The image of men being behind the wheel of big rigs, though, is perhaps the first and most difficult hurdle to clear when talking about women filling the gap. Another issue that could have an impact on women driving is the time away from home. This has also become an issue with male drivers, who want to spend more time with their families. The same would be true with female drivers and may develop the industry to consider shorter routes and delivery schedules to reduce the time spent on the road.

One area that will help in getting women more involved in the trucking industry, though, comes from the Women in Trucking Association. In 2012, WTA formed a separate, charitable organization known as the Women in Trucking Association Foundation, a nonprofit organization designed to provide funds for members seeking training in areas vital to the trucking industry.

After spending a year obtaining funds, the organization is now ready to award its first scholarships. The $500 scholarships will be awarded in four categories: leadership, safety professional, technical skill and professional driver. Applicants for the scholarship are able to submit a request for funding online at www.WomenInTruckingFoundation.org. To be awarded a scholarship, you must be a member in good standing with the organization.

Scholarship applications will be accepted through the end of July and scholarship recipients will be notified in August. Funds will be dispersed to the educational facility of the woman’s choice on behalf of the grant recipient.

It is a good start. Women and the trucking industry are a great fit. It is an employment pool the industry can draw from to overcome some of the shortages that are predicted and would benefit both the industry and women in the long run.

 

About the Author
Larry Hurrle is the editor of IT Magazine. Hurrle, 51, has been a professional journalist for more than 30 years at both daily and weekly newspapers in the Northwest. He attended Boise State University and has served as editor of the Kellogg Evening News in Kellogg, ID; the Argus Observer in Ontario, OR; and the Independent-Enterprise in Payette, ID.

Surprise, Surprise… the Manufacturing Sector Remains Choppy

By Jeremy West, Internet Truckstop Economist

Over the past few months, it has seemed like U.S. manufacturers are treading water. Factory output isn’t dramatically sinking, as occurs whenever the economy is entering a recession. But, on the other hand, we’re not seeing any production gains worth cheering about either.

Manufacturing Orders and Production

Two basic metrics are tracked for manufacturing output: the quantity of current production and the volume of orders for future production. Last Thursday, the Census Bureau reported that new orders in August for factory production fell 5.2% month-over-month and 2.5% year-over-year. This was the first year-over-year decline in new orders since November 2009.

Much of this decline resulted from a 101.8% drop in orders for commercial aircraft. As shown in the figure, orders excluding transportation equipment increased by 0.28% YOY. Regardless, the message is clear: manufacturing production is stalling.

Separately, the Institute for Supply Management reported that the Purchasing Managers’ Index (PMI) increased to 51.5 during September. This was positive news: any value above 50 indicates manufacturing growth, and the index has been below 50 since May. The next few months will show whether this represents a temporary spike in manufacturing activity or a reversal of the contraction seen in the manufacturing sector during 2012Q2.

So, the production picture isn’t entirely gloomy, and some regions of the country are performing better than others. During September, manufacturing output improved in Texas and in the Central Atlantic regions, worsened in New York and in much of the Midwest, and remained largely flat in the Philadelphia region.

Taken together, these reports offer a mixed outlook for total manufacturing—and, subsequently, trucking—with aggregate production activity trending to the downside. The next Federal Reserve Industrial Production and Manufacturing report is scheduled for October 16th. Don’t be surprised to find that factories continued to slowly churn.

How Much is Policy Uncertainty Hindering the Economy?

By Jeremy West, Internet Truckstop Economist

Consider the following situation:

You operate a small carrier and are considering adding a few trucks to your fleet. There is a (hypothetical) politician who is campaigning for a U.S. Senate seat on a platform of further expanding the FMCSA regulations to require any commercial truck that crosses state lines to have two drivers in the cab with combined driving experience of at least twenty years. (You may think this hypothetical rule sounds ridiculous, but some opinions of the current CSA regulations indicate that such a proposal would not be that big of a leap). Suppose that this politician has a sizeable chance of winning his campaign. Are you going to buy any new trucks today, or wait (at least) until after the November election?

The above situation illustrates the role of “policy uncertainty” in shaping economic decisions. In this case, whether or not you invest in expanding your fleet will be partly determined by the outcome of the upcoming election. As a result of this uncertainty, you forgo making the decision until after the election outcome is known.

It isn’t just elections that create policy uncertainty. As was mentioned in a post to the Industry Economic Update LinkedIn group, this practice of delaying investment decisions is currently widespread in the economy. In a recent article on political uncertainty, the Washington Times notes, “[if] there’s one thing investors and employers hate, it’s not knowing what lies ahead.”

Two groups of academic researchers have attempted to quantify the effect of policy uncertainty on the economy. In their article, “Measuring Economic Policy Uncertainty” (pdf), Scott R. Baker, Nicholas Bloom, and Steven J. Davis link several measures of political uncertainty (such as the frequency of media references to policy uncertainty) to declines in real GDP, private investment, and aggregate employment. Separately, Sylvain Leduc and Zheng Liu find that uncertainty about future economic conditions is substantially responsible for the sluggish economic recovery that has followed the recession.

With an upcoming national election, a looming “fiscal cliff,” and continuing instability in the Eurozone, the economic climate is quite unclear. The outlook will remain murky until businesses and consumers can better determine the political environment in which they must operate.

Press Release – Tran4Cast Powered by Internet Truckstop Market Demand Index (MDI) Decreases 10%

Tran4Cast Powered by Internet Truckstop Market Demand Index (MDI) Decreases 10%

NEW PLYMOUTH, Idaho, September 18, 2012– Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) decreased 10% to 11.83 from 13.2 the previous week as reported in the weekly Trans4Cast.

The overall average equipment rate decreased 3% to $2.09 from $2.16 the previous week. Flatbed rates decreased 1% to $1.96 from $1.98 the previous week. Reefer rates decreased 6% to $2.16 from $2.30 the previous week. Specialized truck rates decreased 3% to $2.41 from $2.49 the previous week. Van rates decreased 2% to $1.82 from $1.86 the previous week.

“The economic climate remains tumultuous for trucking. On Friday, the Census Bureau reported that August retail sales increased nearly 1% from July, while the Federal Reserve reported that manufacturing activity shed 0.7% over the same period. Trucking activity should be seasonally strong through November, but broader instability continues to temper volumes and rates.”
Jeremy West, Internet Truckstop Economist

About Internet Truckstop
Founded in 1995, Internet Truckstop is the first and largest freight matching service on the web. Internet Truckstop offers more tools than any other freight matching service available. These easy-to-use tools, the largest freight database, and a commitment to the transportation industry make Internet Truckstop the leader in Internet freight matching.

About Trans4Cast powered by Internet Truckstop

Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data. Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.

Precautions Ahead Of Isaac

The ATA and other organizations are advising drivers and truckers  to take precautions ahead of the soon to be Hurricane Isaac. The Federal Motor Carrier Safety Administration (FMCSA) are also warning drivers and motor carriers to be careful and are urging them to look at what trucking laws have been suspended and how it may effect you. You can view that article here http://www.fmcsa.dot.gov/emergency/disaster-relief.htm

For more information, ATA encourages people to visit Ready.gov or http://www.redcross.org/. Also, for carriers interested in assisting in post-incident relief efforts, please visit the American Logistics Aid Network at http://www.alanaid.org/ or go to trucking.org.

Press Release: Broader economic barometers are marginally improving, but it remains to be seen whether this will translate into improved trucking volumes and help break the industry out of its current flat pattern.

 

 

New Plymouth, Idaho August 27 2012–There was an increase in the ITS Market Demand Index (MDI) last week. Load availability and truck searching numbers seemed to increase while load searching and truck availability decreased.

The overall average equipment rate decreased. Reefer rates increased while flatbed rates remained the same.

We are seeing an increase in the fuel prices from last week. The lowest average cost of fuel is $3.89 and the highest is $4.25. There is a risk of a price spike due to Middle East tensions.

“The transportation sector continues to stagnate. Broader economic barometers are marginally improving, but it remains to be seen whether this will translate into improved trucking volumes and help break the industry out of its current flat pattern.”
Jeremy West, Internet Truckstop Economist

About Internet Truckstop
Founded in 1995, Internet Truckstop was the first online freight matching service. Listening to the transportation industry is the driving force behind all of the innovative business tools that we develop. These easy-to-use tools, the largest freight database and a commitment to our customers makes Internet Truckstop the leader in Internet freight matching.

Our success is defined by our customers’ success.

For more information on the Trans4Cast newsletter please visit www.trans4cast.com or call 1-800-203-2540 x 6180

Source:
Leigh Foxall
leigh@truckstop.com
800-203-2540 ext. 6180 

Is Construction the Economic Bright Spot for Trucking?

So far this year, U.S. manufacturing and industrial production levels have been nearly flat. On a seasonally-adjusted basis, national manufacturing has increased by only about one percent year-to-date.

To make matters worse, much of this production is merely feeding into larger inventory volumes, rather than translating into increases in shipping. At the retail level, total sales have now declined for several consecutive months.

Consumer Sentiment is also faltering, with most Americans anticipating a lethargic economy during the second half of 2012.

Despite all of this bleak news, there is at least one bright spot for trucking. Private and total construction spending have increased for several consecutive months. Most of this increase was driven by private construction spending, which is (as of June) up more than 13% year-over-year (6.4% year-to-date).

Building construction is very material-heavy, closely tying construction spending to demand for trucking: it takes a lot of truckloads to move the materials required for a single construction project. Clearly, both residential and non-residential construction volumes are substantially down from their peaks of a few years ago, but the current trajectory is promising.

This is not to say that manufacturing and retail consumption are losing importance. But, it is reassuring to have at least one source of growth in shipping demand to help keep the trucking industry moving.

Note: Current numbers for several of these outcomes will be released this week. July Retail Sales will be announced on Tuesday (August 14), July Industrial Production on Wednesday, and (preliminary) August Consumer Sentiment on Friday.

 

Thanks,
Jeremy West

512.426.1327  |  Jwest1@gmail.com

Trans4Cast

The ITS Market Demand Index (MDI) decreased 3% to 11.64 from 12.01 the previous week. Load availability saw a decrease while Load searching increased by 7%. We also saw Truck availability and Truck searching decrease from the previous week.

Fuel prices increased 2% to $3.88 from $3.79 per gallon the previous week.

Other than the drop in shipping rates, trucking indicators remained mostly flat for another week, especially with respect to seasonality for early August. To see a full report of the Trans4Cast please visit: www.trans4cast.com

The Divergence between Manufacturing versus Retail Sales

The major economic announcement this week was that second quarter GDP increased at a mild 1.5% annual rate, down from a 2% annual growth rate in the first quarter of 2012. In the same report, the BEA announced that personal consumption expenditures also increased at an annual rate of 1.5%. Although these values indicate that conditions are worsening for trucking—but not alarmingly so—these growth rates do not capture the whole picture.

During the second quarter of 2012, Industrial Production moderately increased. Despite this increasing production, retail sales declined in each month of the second quarter of this year. So, although manufacturers are increasing their production of goods, consumers are not buying this additional output. The below figure illustrates this divergence.

Why is this discrepancy relevant for trucking? In my previous post I discussed how inventories are accumulating at the manufacturer and wholesale level, while retailers are trimming their inventory volumes. Thus, even if industrial production is increasing, demand for trucking will be tempered so long as consumers continue to cut back on their purchasing.

Pay close attention to the retail sales numbers over the next few months as a key indicator for the current state of trucking.

Thanks,

Jeremy West

Trans4Cast

With a slight decrease in the Market Demand Index, the industry is still looking promising.

There was a 5% decrease in the ITS Market Demand Index (MDI) last week. Numbers are moving up for load availability/ searching and truck availability/searching.

The overall average equipment rate decreased with specialized truck rates being the only equipment type to increase.

We are seeing an increase in the fuel prices from last week. The lowest average cost of fuel is $3.53 and the highest is $3.88.

“The week-over-week increase in loads is a misleading artifact of the mid-week holiday during the previous week. Current loads are lower compared to volumes in June of both 2012 and 2011. With consumer confidence declining, look to this Tuesday’s upcoming Industrial Production for June as a key metric for the outlook for trucking.” Jeremy West, Internet Truckstop Economist

To see a full report of the Trans4Cast please visit: www.trans4cast.com