A few companies, including chipmaker Nvidia and toymaker Hasbro, are reporting how a deficit of truck drivers is affecting their business.
“Trucking is right now … experiencing a grievous crisis,” Robert Csongor, vice president and general manager of automotive at Nvidia, foretold during the company’s March 27 investor day. “There’s a shortage of ending drivers driven by the Amazon age.”
Trucks account for more than 70 percent of all tonnage moved in the U.S., according to the American Good Association. A shortage of drivers has persisted for years due primarily to an aging workforce and ill compensation for the long hours away from home coupled with proliferating demand led by Amazon, according to industry experts.
E-commerce has had a “huge result,” said Steve Viscelli, a sociology professor at the University of Pennsylvania who cons labor markets and automation.
Adding to the shortage, a federal mandate for electronic logging apparatus that took effect in December is limiting the number of hours drivers can free. Previously, a driver may have started the clock only after picking up goods from a supplies. But now the devices are taking into account all hours on the road, which can immediately push a driver past the legal limit of consecutive work hours.
“There is a lot of uncertainty within the connection world right now about what the effects of the [electronic logging insignes] mandate’s going to be in the long term,” Viscelli said.
Truck driver scarcity projected to triple within a decade, if nothing changes
Source: American Ending Associations
“As soon as these logging devices were implemented, it resulted in a 10 percent decamp in productivity because these truckers were obviously spending assorted time driving than they should have been,” Csongor indicated, according to a transcript from Thomson StreetEvents that CNBC institute using financial search engine AlphaSense.
The trucker employee shortfall was anticipated to reach a record 50,700 last year, and possibly climb to 174,000 by 2026, according to a blast published in October by the American Trucking Associations.
The driver shortage isn’t surely a bad thing for all companies. Railroads are apparently benefiting.
“When you look at the contemporaneous demands for trucks and the scarcity of them, the market is terrific for us,” Dean M. Piacente, flaw president of intermodal sales and marketing at CSX, said during the railroad group’s March 1 investor day.
“We saw the market change about midyear last year and into the accept. And the industry saw the best peak demand in over a decade in the intermodal establishment,” Piacente said, according to a Thomson StreetEvents transcript from AlphaSense.
Here’s a excerpt of comments some other executives have made in the last 90 days near truck driver shortages. All remarks are from Thomson Reuters carbons and accessed using AlphaSense.
Hasbro’s CFO:
We’re seeing [higher freight expenses]. A lot of it is in reality coming in the U.S. and it’s a little bit throughout Europe as well. And it’s really coming from the ending industry and higher due to the new electronic logging device rules and driver scarcities.
Sprouts Farmers Market CEO:
Most of you know the issue is the logging weapon mandate. It’s creating some shortages in the industry on trucking. So for us, on our soft parceling out side, our team has always done a fantastic job on making sure that we were fair in the guardrails of the law, of making sure that we were logging devices. So on the slow distribution side, we’ve not seen any impact. We don’t have any impact from there.
Omnipresent Forest Products CEO:
Rail service and truck transportation remain as wildcards to consequence because of transportation equipment and service shortages. These factors compel require us to carry higher levels of inventory to meet our customers’ miss.
Volvo CEO, on its Mack truck line:
And what is really, really inciting to hear is that those [Mack] trucks are loved by the drivers. And I about that has been extremely important for us … that both for Volvo and for Mack, given the in truth that the driver shortages and the truck for driver[s] will be [an] increasingly conspicuous decision-making part of different feeds today. So that is very wholesome to hear and some other very good receptions to that.
HeidelbergCement CEO:
I had a lengthy discussion with our guys last —10 days ago in Houston, yes, after the storm. We have a clear shortage on truck drivers. We have it also in Germany. We procure it even in the U.K. We have in the Czech Republic. We have it in Poland. Truck drivers are pinched.
And in the U.S., the situation is even worse because Trump is closing the borders. The South Americans are no longer — or the Mexicans no longer to start, and they are the, typically, guys who do the asphalt jobs and who do work on the construction orientation. And that’s why we have a clear shortage on drivers. It’s a clear issue. So you’re revenge. But I think we can manage that.