Worker Shortages and More Pose a Challenge to Freight Companies | Elementum

Worker Shortages and More Pose a Challenge to Freight Companies

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Transportation is one of the world’s largest industries and deeply influences how efficiently global supply chains are able to run. According to Plunkett Research, transportation revenues in 2017 reached over $1 billion in the U.S. alone. Globally, they stood at $4.8 trillion. Today, trucking, shipping, air shipping, and other logistics services are all experiencing disruption: As consumer expectations evolve, businesses are constantly pressured to deliver high-quality goods in the shortest amount of time. But issues surrounding labor and rising fuel prices pose real threats to the freight industry.

Technological solutions are helping many companies keep up and adjust to ever-changing consumer expectations. Answers to some of the transportation industry’s biggest concerns could also lie in improved technology.


Current Challenges in the Trucking Industry

Driver Shortages

To give you an idea of the size of America’s trucking industry, U.S. trucks transport 63 percent of ALL the goods that go to Canada and Mexico.  The industry, while robust, is hugely dependent on a continuous and growing workforce. However, this workforce is dwindling. According to Seaport Global Securities LLC analyst Kevin Sterling, between 60,000 and 100,000 drivers are needed to meet the demand for trucking services. Despite ramped-up recruiting efforts, this number is expected to triple by 2026.

Stricter Limits on Driver Productivity

Last April, the Electronic Logging Device Mandate went into effect.  It’s a system which requires truck drivers to log their hours digitally rather than in the standard paper logbooks. Before the mandate was implemented, drivers could squeeze in more miles by not recording waiting and traffic time, and by underreporting their hours on the road. Electronic Logging Devices record that time automatically, reducing the distance drivers can cover. The regulation is intended to improve safety standards and transparency, but it could also compromise both efficiency and driver satisfaction. Transportation companies are now tasked with holding up these safety standards, while finding new and innovative ways to boost efficiency.

High Fuel Costs

According to Donald Broughton, analyst for Broughton Capital LLC, oil will continue trading in the $45-$65 range and diesel in the $2.50-$3.25 range throughout 2018. This estimate does not include the price disruption expected from weather and other disruptions. For comparison, in 2016, diesel fuel prices were just US $2.14 per gallon.

Technology Comes to the Aid of Freight Companies

A number of companies have come up with their own ways to improve efficiency. Kuehne + Nagel, a global transport company based in Europe, recently upgraded their fleet for pharmaceutical deliveries. Temperature-controlled fleets, GPS-controlled sensors, and even printers for temperature reports all ensure timely and uncompromised deliveries.

Price quotes are just as important as the shipping process. According to Zencargo, the process of securing container quotes may cause companies billions of dollars a year in terms of hours wasted. To address this, Hapag-Lloyd, a global shipping company based in Germany, launched Quick Quotes just last month. It’s a new tool that provides instant quotations upon user login for shipping services, and has already created ROI for the company.



As external factors like fuel prices and legal mandates pose new challenges to the shipping industry, companies will have to explore new ways of driving efficiency across their operations to save costs and discover new areas of revenue generation. Technologies like IoT connectivity, GPS, robotics, and automation, all offer digital solutions to the problem of efficiency in today’s “want it now” world. But to effectively grapple with their operations to make them faster and better, companies will have to be committed to streamlining their processes — from sourcing, to loading, to manpower utilization and more.

Paula Lucero

Paula Lucero


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