US Trucking Impacts on Supply Chain Industry

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It is no secret that the current state of the US trucking industry has had a negative impact on the logistics and supply chain industry as a whole. The shortage of truck drivers in the United States has been a growing concern that is now reaching critical mass. According to Bloomberg, the US trucking industry represents 70% of the nation’s freight volume by weight, and with a trucking workforce that is staying stagnant, the risks are mounting. With slowed operations and prices on the rise, the industry is tense and knows all too well the impacts this will have on the bottom line.


ELD Mandate

The new US electronic logging device (ELD) mandate, which went into effect on December 18, 2017, also had a large impact on the industry, causing capacity reduction and a decrease in the number of turns a dray carrier is able to execute in a day. In addition to other factors, including e-commerce, the ELD mandate put an added strain on truckers and has contributed to a large hike in transportation prices. According to the North American Truckload Rate Index, dry van truckload rates across the United States were up 17 to 25 percent on average in January, compared with a year ago. With the full enforcement of the ELD mandate going in place on April 1, the price hikes are likely to continue and the full impacts of this situation are yet to be seen.


Ripple Effect

The delays in trucking across the country are now also spilling over into the container shipping industry. The reliability of trans-Atlantic shipping has been on shaky ground for the first few months of 2018, largely due to the barrage of devastating hurricanes at the end of 2017 and the backlog in the US trucking industry. The Journal of Commerce recently reported that the SeaIntel Maritime stated the disparity between carriers’ schedules and the actual times that vessels arrived was worse on the trans-Atlantic route than any other. Due to the lack of confidence, freight forwarders are focusing efforts on increased tracking of cargo, and in some cases, even switching to air carriers.


Market Effects

Those in the supply chain are currently gripped with what the potential effects of both the trucking and container shipping situations may have on the industry as a whole. The market has seen price increases and a decrease in customer confidence. The team at TOC Logistics is monitoring these industry changes very closely and has been committed to finding solutions to best serve our customers. We regularly post market advisories in order to inform our customers, and others in the industry, of new vital updates.

Along with the above concerns, and the many others that are likely to arise in 2018, the year ahead is sure to be interesting for those in supply chain.

07 Mar, 18

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