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1617 Terre Colony Ct.
Dallas, TX 75212
(214) 819-4180
info@narrowaisleinc.com
www.narrowaisleinc.com
try where there are so few economists
plying their trade?
AAn economist looks for the under- lying structure that guides human
behavior. That’s very helpful in understanding why things happen and how
they might change in the future. An
economist is not just looking at what
happened yesterday.
There aren’t many of us in transport
because this is an industry that is primarily worried about what happened yesterday—and today. It has very little
money and time to spare worrying about
next week. You have to be very nimble
and wear many hats to survive as a
researcher in transportation. It’s worth it,
though, because the industry is endlessly
fascinating.
QSo quantify how well, or not so well, thetruckingindustryisdoing
today.
AThe industry is smaller than we would like, still well below its 2006
peak. But it is growing at a good clip, over
4 percent for this year. This is not a time
for complaining. It is a time for grasping
opportunities.
QThe impact of the driver shortage has been discussed in more ways
than was thought possible. Put in numbers what the shortfall is today, what it
will look like two or three years from
now, and at what point it will become a
crisis for the supply chain.
ABecause fleets always add capacity after the fact, we have a shortage of
about 100,000 drivers right now. That’s
on a population of about 2. 5 million full-time-equivalent drivers. Because the
developing wave of new safety regulations will require the addition of some
400,000 drivers over the next five years, I
fully expect the fleets to stay behind in
their hiring.
The peak shortage will be in the
250,000 range by late 2013. That should
be enough to create sporadic supply
chain failures during peak seasons, but
not enough to create widespread failures.
The issue is that the shortage may per-
sist for three to four years, keeping the
industry under stress for an unprece-
dentedly long time. Such stress could
kick off significant change in driver pay
and in shipper-carrier relationships.
QIf we operate under the assump- tion that carriers now hold the
leverage in terms of pricing, how long do
you expect this cycle to run before the
pendulum swings back to shippers?
AGiven the regulatory pressure, the cycle will run until the next downturn. My guess is that downturn will
occur in 2015.
QYou have strongly advocated an increase in truck size and weight
limits as the best way for shippers and
carriers to improve productivity in a
world of scarcer resources. Yet the trucking industry abandoned any legislative
effort to get such an increase included in
the House version of transport funding
legislation. Is this an absence of will on
the truckers’ part, or an absence of effort
on the part of shippers to push the issue?
AThis is clearly a shipper issue. The carriers have little to gain from a
change. That said, there is obviously not
enough pain from shortages yet to overcome the very strong public resistance to
heavier trucks. No smart lobbyist would
dull his pick on this issue in 2012. We will
need some kind of crisis to break that
resistance. That’s unfortunate because
the facts overwhelmingly support the use
of larger trucks.
QRailroads are making a big effort to build a domestic intermodal presence, especially on short to intermediate
hauls that were once the domain of
truckers. Does that pose a threat to
truckload carriers?
AFirst off, let’s separate the short- and intermediate-haul segments.
Intermodal is earning a modest gain in
share in the intermediate-haul (900- to
1,200-mile) segment. I estimate that the
gains are about half done. So far, that
translates to about 500,000 loads, a nice
10-percent gain in domestic intermodal
volume. The railroads are rightfully
proud of this accomplishment—
principally built on improved reliability. Keep
in mind, however, that the equivalent
