Heavy Duty Trucking

SEP 2014

The Fleet Business Authority

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24 HDT • SEPTEMBER 2014 www.truckinginfo.com Quotable "The industry is going to have to figure out … how do they pay drivers going forward? Do they finally start paying drivers in a different way? I think they do." – Eric Starks, FTR, in last month's "State of Freight" webinar Trucking's Most Respected Business Report hotline Nice and cool The ALS Ice Bucket Challenge has been sweeping through the trucking industry. Volvo Trucks in North America chief Göran Nyberg, above, was only one of many supplier, fleet and association executives to post videos of themselves being doused with icy water to help raise aware- ness of and funds for ALS, the neurodegenerative disease commonly known as Lou Gehrig's disease. Visit www.alsa.org to learn more. Driver shortage starting to show up in pay packages Spot Freight: Truckload freight availability in July remained elevated compared to previ- ous years despite a seasonal dip. Same-month volume was up 32% com- pared to 2013, when freight volume was unusually robust. Spot market volume typically peaks in June, and this year's seasonal contraction was only 11% in July, compared to 10-year average decline of 19%. www.truckinginfo.com Spot Freight: Truckload freight availability in July remained elevated compared to previ- ous years despite a seasonal dip. Same-month volume was up 32% com- pared to 2013, when freight volume was unusually robust. Spot market volume typically peaks in June, and this year's seasonal contraction was only 11% in July, compared to 10-year average decline of 19%. As this graph shows, all available drivers are being utilized. This makes the market vulnerable to seasonal freight surges and, especially, any upside underlying freight growth, says FTR. The latter is distinctly possible given recent economic reports. The market is beginning to show the effects of sustained stress. The large contract-oriented dry van fleets are announcing major driver compensation increases. Expect their competitors to follow. Driver labor conditions are expected to remain at critical levels for the next few years as additional government regulations are implemented. Many of these regulations will either pull drivers out of the labor pool or negatively impact productivity. If regulatory implementation is delayed, it could alleviate some of the stress in the driver system from what is currently being forecasted. For more info visit www.ftrintel.com/hdt or contact Eric Starks at (888) 988-1699. PHOTO: VOLVO TRUCKS NA 2500 2000 1500 1000 500 0 ( DEC ) JA N JUNE JULY AU G SEP OCT N OV DEC FEB MAR APR M AY Index: August 1996 = 100 Spot Freight Index (Information provided by DAT Solutions) 2010 2011 2012 2013 2014 150,000 100,000 50,000 0 –50,000 –100,000 –150,000 –200,000 –250.000 2009.Q2 to 2016.Q2 - Current Quarter: 2014.Q2 Driver Shortage (-)/ Surplus (+) Driver shortage/surplus Forecast 2009.Q2 2009.Q4 2010.Q2 2010.Q4 2011.Q2 2011.Q4 2012.Q2 2012.Q4 2013.Q2 2013.Q4 2014.Q2 2014.Q4 2015.Q2 2015.Q4 2016.Q2 # of Drivers - Surplus - - Shortage - –207,439 Source: FTR; copyright 2014 by FTR (www.FTRintel.com)

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