Heavy Duty Trucking

DEC 2014

The Fleet Business Authority

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48 HDT • DECEMBER 2014 www.truckinginfo.com younger people have higher unem- ployment," Batts predicts. Even a regulation change wouldn't address the fact that "truck driver" is not seen as an attractive career, no matter what the pay. "Most Millennials are college graduates and would rather be a Starbucks barista or a teacher -- under no circumstances do they want to be a truck driver," says John Larkin, managing director and head of transportation and capital markets research for the investment firm Stifel. Tightening capacity 2 Acceleration of U.S. growth for several quarters would push freight growth up enough to push capacity utilization above 100% for six to nine months," says Noel Perry, transportation economist and analyst for FTR. The good news about tighter capacity is that it also helps lead to higher rates. Rate increases of be- tween 8% and 10% are expected for the trucking industry no later than the second quarter, according to the annual State of Logistics report compiled by the Council for Supply Chain Management Professionals and Penske. Kemmer foresees this leading to increased use of private fleets. "As shippers continue to hear about tight capacity and increasing rates, they could seriously consider growing their own fleet to control the capac- ity to haul their goods. Private fleets can oftentimes offer drivers a better work environment." In addition, watch for carriers to work more closely with shippers and receivers to reduce time wasted at the docks. Carriers are giving their capacity to these "preferred shippers" and either charging higher rates or turning down freight from those who don't play nicely. Shippers and carriers are also looking to intermodal to help ease capacity constraints, but the railroads have their own capacity problems – and the driver shortage causes problems getting the contain- ers to and from the rail. "Driver shortages in drayage mar- kets are the worst in the industry," says Perry. Improving productivity 3 The driver shortage and regu- latory burdens are hampering productivity. Larkin notes that for long- haul operations, "we've seen a plateauing to 2,050 to 2,150 miles per week per truck," while in the "old days, you would see 2,790 to 2,900 miles per week. But those days are behind us." Fewer miles mean more trucks for the same amount of freight – but it's hard to put more trucks on the road when companies can't find enough drivers. That means fleets are doing all they can to improve the productivity of the trucks they have, from high- tech routing software and moving to drop-and-hook operations to lightweighting and double-decking systems for freight that's otherwise not stackable. Longer combinations and heavier trucks might help. Large truck- ing companies and shippers insist that the current federal limits are outdated and are preventing pro- ductivity increases that could go a long way toward relieving highway congestion. On the other side are owner- operators, safety advocates and labor unions that say heavier trucks are an unacceptable safety risk. And the railroads oppose any capacity increase for trucks. The 2012 highway bill ordered the Federal Highway Administra- tion to do a comprehensive analysis to provide Congress the background for a decision. The analysis, origi- nally due this fall but now delayed until early 2015, will look at the safety and economic implications of changing the federal limits. Debating autonomous trucks 4 Daimler made headlines this year when it demonstrated its "Future Truck 2025" rig, showing the driver sitting back and perusing a tablet while the truck automatically maintained its lane and distance from other vehicles, even changing lanes, without a hand on the wheel. Another project, which Paccar is involved in, is working on "platoon- ing," where technology allows a group of trucks to follow each other much more closely than would be safe with strictly manual human controls, saving fuel for all the trucks in the platoon. Some believe such technology could help alleviate the driver short- age. But critics argue that autono- mous vehicles could be vulnerable to being hacked by terrorists, and that there are ethical issues to deal with, not to mention questions of liability. "So-called safety groups will stop the idea of 'driverless' trucks in its tracks," Batts says. "Ironically, they don't like drivers, but they dislike the idea of a 'driverless' truck even more." Changing wait times for new equipment 5 In recent months there's been a surge in truck orders, with an October Class 8 order spike that surprised many analysts. Some fleets are expand- ing, some are buying more top trends "So-called safety groups will stop the idea of 'driver- less' trucks in its tracks." – Lana Batts, Transport Capital Partners

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