DC Velocity - January 2019

inbound

One of the biggest challenges for shippers in 2018 was coping with a truck capacity crunch that’s been widely attributed to a chronic shortage of drivers.

Now, one group is pushing back against that narrative, calling the truck driver shortage a “myth.” The Grain Valley, Mo.-based trade association Owner-Operator Independent Drivers Association (OOIDA) argues that the industry’s problem isn’t a shortage of drivers; it’s widespread job dissatisfaction among drivers that leads to high turnover. “The real problem is driver churn caused by low pay and poor working conditions,” Norita Taylor, OOIDA’s director of public relations, said in a release.

“The idea of a driver shortage
has been around for decades and
is typically used as an excuse to
push other agendas that are not
beneficial to small-business truck-
ers,” Taylor said. “With turnover
numbers reaching 98 percent and
higher, we see a serious problem
that can only be solved with com-
pensation and better treatment of
drivers.”
That point of view runs count-
er to the position of industry
groups like the American Trucking
Associations (ATA) as well as most
carriers, brokers, and consultants.
But OOIDA is undaunted. The
group recently released a video in
which Todd Spencer, OOIDA’s
president and CEO, offers a detailed
accounting of the economics of
trucking and explains what it will
take to fix the problem. You can
watch it at https://www.youtube.
com/watch?v=YSzx9F45Ic4&fea-
ture=youtu.be.

Trucker group calls
driver shortage a myth

The ongoing trade war with China and a rising U.S. dollar have created serious headaches for exporters, dampening overseas demand for goods ranging from soybeans to steel.

Amid the turmoil, however, one product is flourishing: scrap paper. The Port of Oakland recently reported that exports of scrap paper were up 3 percent in the first 10 months of 2018. From January through October, the port shipped 110,400 20-foot container equivalent units (TEUs) of wastepaper— which accounted for nearly 18 percent of Oakland’s total export volume. Port data indicate that nearly all of the recyclable paper went to Asia, where the product is used primarily to make packaging for billions of dollars’ worth of Asian goods exported back to the U.S.

What makes this all the more remarkable is that the boom has occurred despite a sharp drop in demand from Oakland’s top trade partner, China. China reduced scrap paper shipments from the port by 37 percent through the first 10 months of 2018. But neighboring Asian countries have picked up the slack. Oakland’s scrap exports to Taiwan were up 522 percent in 2018, while shipments to Vietnam were up 344 percent.

“We can’t be certain if this [upward] trend will last, but the figures seem to show that there’s no loss of demand globally,” Port of Oakland Maritime Director John Driscoll said in a release. “It appears that shippers are finding new markets for their scrap paper products.”

Scrappy export stands up to trade-war headwinds

The “sharing economy” model has taken the transportation world by storm, whether it’s Uber Technologies’ original ridesharing application or Uber-inspired digital offerings like crowdsourced parcel delivery apps and freight matching platforms.

Now, the industry is preparing to introduce a new twist—a service that allows rideshare drivers to generate additional revenue through smartphone-based sales of goods directly inside the car. “Why deliver goods to stores or households when the consumer is already sitting in your back seat?” investors ask.

New York-based Cargo, which calls itself a “ provider of in-car commerce to the rideshare economy,” recently raised $22 million in funding to scale up its business and add digital entertainment services to its offerings. Since launching in July 2017, the firm has

activated more than 12,000 drivers across 10 cities, which equates to more unique stores in North America than the 7-Eleven convenience-store chain has, Cargo claims.

With its new funding, Cargo will expand on its partnerships with brands like Kellogg’s, Mars Wrigley Confectionery, The Coca-Cola Co., and Red Bull on in-car sampling and sales. The plan is to help rideshare drivers earn extra income while providing a premium experience to their riders, who can now load up on snacks, aspirin, or energy drinks without having to stop at a store.