compliance costs could seek to raise
rates to compensate. Many may fall by the
wayside. Donald Broughton, an analyst
at Avondale Partners, an investment firm
that tracks truckload carrier failures, said
the potential failure rate triggered by compliance with the new mandate will dwarf
anything that’s been seen in the past few
years, which includes the period of the
Great Recession. Perhaps unsurprisingly,
Perry of FTR projects that the driver crisis
will peak around 2016.
Hartford, the Baird analyst, said the
rules should “reinforce to shippers both
the looming restrictions of capacity and
the increased risk of legal liability from
partnering with noncompliant carriers.”
Those factors, in and of themselves, should
make shippers sit up and take notice, he
said.
The industry faces an uphill battle to
recruit qualified drivers, according to
Klemp. One reason is the deteriorating
purchasing power of driver wages. Based
on 2007 base wages, the average dry van
driver has seen purchasing power erode by
about 10 percent due to inflation, he said.
Over the past 12 years, drivers have lost
ground compared to the general wage earner, according to Bureau of Labor Statistics
data quoted by U.S. Xpress. In 2013, the
typical annual wage for tractor-trailer drivers nationwide was $40,940, 11. 8 percent
lower than the overall national average
wage of $46,440. In 2001, the differential
between the two wage scales stood at about
1 percent, the company said.
Not only is the pay substandard given
the nature of the work, but new government rules and company policies have
resulted in increased micromanagement of
drivers and have diminished the freedom
and flexibility that traditionally drew people to the profession, Klemp said.
To resolve the issue, truckload driver
pay would effectively need to double from
current levels, Klemp said. However, he
believes such a scenario is unlikely given
continued modest economic growth, a
still-fragmented carrier pie, and shippers’
intense focus on reining in transportation
costs.
—Mark Solomon
short takes
In its 12th annual “Sustainability Report,” UPS announced that
in addition to reducing overall carbon emissions in 2013, the
company also met its 2016 goal of reducing its air and ground
fleet’s carbon intensity by 10 percent three years ahead of schedule. … The number of health-care organizations using solutions
provided by Tecsys Inc., a developer of supply chain management solutions, has doubled over the last two years, according
to the company. Tecsys also acquired Logi-D, a hospital supply
chain automation company, creating a supply chain management optimization solution for health-care systems. … Packaging
company Box On Demand is opening a Ft. Worth, Texas, manufacturing facility, which will be dedicated to the production of
corrugated fanfold and other corrugated products. … Flow-Rite
was awarded a grant from the state of Michigan to support the
expansion of its Byron Center, Mich., facility
by 7,500 square feet. … Specialized shipping
solutions provider ProShip Inc. is a title sponsor
of the Succinic Semialdehyde Dehydrogenase
Deficiency (SSADH) Association’s golf event,
Chip for Charity. … Unishippers, a small-package and freight shipping reseller, has started
operating its new subsidiary, Launch Logistics,
in Salt Lake City. Launch Logistics is intended to rapidly expand
the company’s sales force and customer service expertise and
operates alongside its franchise network. … The Port of Stockton
in California will be transitioning its M-580 Marine Highway
demonstration project from a weekly service to an “as-needed”
service. … Automation and software supplier Intelligrated has
opened an expanded Minnesota district office. … Xtreme RFID,
a manufacturer of rugged RFID tags for harsh environments, has
joined the Reusable Packaging Association. … EnerSys, a provider of stored energy for industrial applications, has helped its
customers change out 5,000 lift trucks to battery power as part
of its Convert to Electric (C2E) program. … Integrated Systems
Design (ISD), an order picking, packing, and shipping integrator
and manufacturer, will speak about “Dimensional Order Packing
Trends and Tips to Increase Profitability” at the Parcel Forum
Show in Dallas. … The 186,000-square-foot multitenant industrial property at 2200–2240 South McDowell Blvd. in Petaluma,
Calif., has been sold, with commercial real estate services firm
Cushman & Wakefield representing both sides in the transaction.
… Interroll’s asynchronous drum motor has been found to comply with the U.S. Department of Agriculture’s guidelines for the
sanitary design and fabrication of dairy processing equipment.
… UPS Capital, the risk management and financial services arm
of delivery giant UPS, is expanding its Jeweler’s Elite Program to
three more cities: San Francisco, Philadelphia, and Providence,
R.I. The program combines UPS shipping with UPS Capital parcel
insurance. … Datalogic, a supplier of automatic data capture
solutions, recently celebrated the 40th anniversary of the first
bar code scanned.
PROSHIP INC.
