According to the American Trucking Association, 70% of all U.S. freight by tonnage is moved by truck, an estimated 9 billion tons annually. To move all this freight requires experienced and dedicated truck drivers, however, one of the major problems the American shipping industry is facing is the shortage of truck drivers. This shortage proved to be a challenge for U.S. shipping industry and economy.The aforementioned shortage has a trickle down adverse affect on international shipping. Below are the three major effects the truck driver shortage has on international shipping;

– Delayed shipment pickup and arrivals;

– Increased costs and fees;

– Port congestion.

The American Trucking Associations (ATA) estimates that the U.S. needs approximately 30,000 truck drivers to fill the void. Factors driving the shortfall include: governmental regulations, relatively low pay, and the fact that the industry isn’t as attractive as other professions and fewer young adults are interested in getting into the profession.

Truck drivers are the backbone of the transportation industry and they hold supply chains together. It goes without saying that no container, or straight truck, or trailer can move without a driver behind the wheel. As important as drivers are, trucking companies, especially truckload carriers, often have great difficulty finding, hiring and ultimately keeping drivers.

One reason for this shortage is that many large and small carriers had a lot of difficulty during the financial crisis, sadly some didn’t survive the financial crisis. As a result of the financial crisis independent contractors lost their equipment, and it became harder for these businesses to obtain the credit and/or capital they needed to invest in their companies.

In addition, an overwhelming number of trucking firms have said that they have not been able to find enough drivers that meet the strict criteria set forth by the Department of Transportation (DOT). This situation forced drivers to look for other work where they were able to have a more normal family life and be closer to home.

Today, drivers are leaving now because of industry growth, retirements, and switching to various other industries. Unless trucking companies, logistics providers and shippers work together to resolve trucking industry’s driver problem, transportation and logistics costs will rise substantially and supply chains will be put at risk.

Furthermore, changes to the hours-of-service (HOS) regulations in 2013 are also reducing driver productivity. New rules have reduced the hours truckers can drive and require more breaks, so long-haul drivers paid by the mile are on the road longer without extra pay. Trucking companies are reacting by stepping up recruitment, offering signing bonuses, and reimbursing driving school tuition, which can run up to $5,000.

As a result, carriers have to add more trucks and drivers to haul the same amount of freight, to make up for the shortage.

Truckers have also, recently, banded together and went on strike to complain about being wrongfully classified as independent contractors thereby preventing them from getting workplace protections like overtime and mandated work breaks, as well as receiving lower pay. Complaints also include not being paid for waiting and loading time at ports, causing many truckers to receive paychecks that are actually below minimum wage.

The truck driver shortage is expected to surge to 239,000 by 2022. Many trucking companies say they will now invest in drivers and that they will spend more on wages.

There are, of course, other factors that are causing headaches for the trucking industry; the truck driver shortage is creating congestion at the ports and ramps, and it is expected to get worse.

One of the other factors is the volume of inter-modal units moving on U.S. railroads which recently reached a record high for the railroad industry, as the peak season is still in affect. Norfolk Southern Railway does not expect rail service to start getting back to normal levels until the end of March 2015, with most customers not seeing any improvement until November 2014.

The continued strong cargo volume is surprising. A number of importers indicated in a JOC poll that they diverted the shipments to Canada and East Coast ports this summer, thus causing huge congestion problems in Canadian ports for intermodal moves.

Intermodal rail issues have plagued U.S. and Canadian seaports since the bitter winter in the eastern half of the continent grounded rail operations. Containers that can’t leave the terminals by rail on schedule are backing up, contributing further to congestion in the terminal yards.

The inability of motor carriers to attract enough drivers to handle growth in demand puts pressure on the so-called first and last miles of the intermodal legs. The truck driver shortage largely has affected the intermodal rail. Trucking’s increasing difficulty finding drivers to pilot big rigs has helped shift freight to intermodal containers, but it could also threaten future intermodal growth.

Moreover, possible strikes and work slow downs at some of the marine terminals in the U.S. has also caused congestion and, therefore, created trucking problems due to long wait at the terminals at the time of pick up of the containers. Another factor is that all terminal operators are experiencing excessive delays due to a severe shortage of chassis available for the market.  Under the carrier-owned chassis model that had been in use in the U.S. since 1960s, shipping lines provided a chassis with every container. Now that the lines have sold most of their chassis, they no longer control the equipment. Truckers must go where the chassis were dropped off, which could be a completely different terminal from where the trucker just called.

Therefore, a huge chassis dislocation issue has emerged, where one terminal may have few chassis on a particular day and another terminal has thousands of chassis. Drivers must wait in line for a container to be flipped from one conveyance to another, resulting in long turn times.

Since the Ocean Carriers have gradually stopped providing chassis, all drayage trucking community are now relying on chassis pools and leasing companies to provide the equipment needed, but there is not sufficient volumes of available chassis to satisfy the demand.

As a result, drivers are waiting in longer lines at the terminals and missing appointments which is leading to a loss in productivity and higher operating costs. The current turnaround time to pick up a container at these terminals is 3-5 days longer than usual and in some cases those delays are even longer.

Volumes of ocean containers arriving into LA/LGB ports hit an all-time high in August and exceeded all volume forecasts, therefore causing a huge strain on the entire system. If the volumes continue at this level, the chassis shortages and longer waiting times at all terminals in the LA/LGB area will continue to occur.

An internal trucking report in Los Angeles-Long Beach revealed that some drivers were experiencing turn-times of 3.5 to 5 hours at seven of the terminals in the harbor, with the remaining terminals having turn-times of 2.5 hours or less.

Terminal operators are not providing sufficient longshore labor to handle the cargo volumes and as a result terminals are having problems locating containers within their facilities. On top of these problems, they are not communicating effectively with truckers when there are exceptions, such as an unexpected need to shut off a section of a terminal due to congestion. There is an effort in place to bring in more chassis from other areas and give extra attention to repair bad order chassis but due to peak season, there are not enough chassis to handle the peak season volume of containers.

This week there have been compounding issues to the point of severe decreased productivity and increased backlog of container deliveries. Nightly, drivers are experiencing long gate and flip lines and a lack of chassis resulting in driver wait times that are so long they are asked to leave the terminal without their load.  Moreover, getting a pick-up appointment at a terminal can take up to 2 to 3 days from the day of availability.

Chassis shortages and dislocations are also a significant problem in New York-New Jersey, the nation’s second largest port complex, as well as Los Angeles-Long Beach. As a solution to this chassis problem, a chassis working group that the ports set up more than two years ago is attempting to develop a neutral or grey chassis fleet that will allow any trucker to use any chassis that is available at the time of need, regardless of which company owns the equipment.

Truckload operators are increasingly willing to pay more to secure the truck drivers needed to deliver trucking capacity to shipper customers. As a result, everyone should expect to see higher rate increases in 2014-2015, if you want to secure capacity from your truck carriers otherwise shippers would have a hard time finding trucks to move their freight.

We hope that the truck driver situation resolves itself, however everybody needs to take precaution meanwhile. Working with an experienced logistics provider is a good first step. There are many ways both logistics providers and shippers can work together and with other shippers and carriers to stay ahead of the crunch. A trusted freight forwarder can use their experience on understanding the supply chains, shipping and logistics to get you a good price and to efficiently guide you through many complications in the shipping industry.