From SCDigest's On-Target E-Magazine
- Oct. 21, 2014 -
Supply Chain News: Fascinating Panel Discussion at CSCMP on Transportation was Long on Insight - with a Bit of Controversy
Shippers Expect Sharp Rate Hikes over Next Year, While One Panelist Says Driver Shortage is Overblown
SCDigest Editorial Staff
On the final day of the CSCMP 2014 annual conference in San Antonio, one of the three "mega-sessions" available in the morning slot was titled "What's Happening in the Real World of Freight and Transportation." Moderated by 2014 CSCMP distinguished service award winner Mike Regan of TranzAct Technologies, the panel discussion turned out to be one of the best events of the conference - even if several of the panelists were not exactly household names.
SCDigest Says: |
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| Regan said he serves on the board of a publicly traded carrier, and that driver retention is clearly one of the most important issues the company faces. |
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What Do You Say?
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The four panelists were: Jeff Tucker of Tucker & Associates, Geoff Turner, CEO of Choptank, Steve Robinson, VP of Logistics at Starbucks, and Bob Volmann, current head of the Transportation Intermediaries Association (TIA). All four panelists were wisely selected by Regan - each was very insightful, in a slot usually populated by trucking CEOs and other big shots.
Early on, Regan got things going by asking the audience of some 200 people which of them believed their transportation costs were going to rise more than 5% over next 12 months. SCDigest estimates that some 75-80% of the audience raised their hands - an incredibly high number that shows where shippers believe rates are headed.
Starbuck's Robinson soon thereafter emphasized that in this rate environment, shippers need to rethink the way they interact with carriers.
Currently, "Every rate negotiation with a carrier must be accompanied by a parallel discussion about how to improve carrier efficiency in doing business with you and making life better for the driver," he noted.
The challenge is that when freight demand exceeds carrier supply, while carriers may be happy to discuss with shippers how to improve efficiency at the dock and more, will they really respond to that effort by reducing rates? Likely not - though maybe the good news is that the carriers may at least be more likely to accept a shipper's freight tender after such improvements.
By far the most interesting and frankly controversial comments from the panel were made by Jeff Tucker, who said the current mania over the truck driver shortage is "overrated."
He cited the fact that over the past 30 months, the government reports that the number of "for hire" carriers has actually increased by some 30,000. That is hardly a sign of a huge driver shortage, Tucker argued - someone is driving those trucks.
Tucker acknowledged that the driver market was "tight," but said it was not nearly the disastrous situation it is often made out to be. "The freight is moving," he said.
In fact, Tucker said the reason the situation is so dire is that a driver shortage really has hit the industry's largest carriers, where much of the media's attention is focused. While those large carriers do indeed face driver issues, the situation is much better at medium and smaller carriers, Tucker said.
He said driver retention was often much better at those smaller carriers, which take a more personal approach to driver relations, and can also often offer a better quality of life, Tucker said.
Tucker's comments frankly took a little air out of the room, given the belief that there is an extreme driver shortage has become an accepted truth in the industry over the past couple of years.
(Transportation Management Article Continued Below)
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After the panel, moderator Regan noted to SCDigest that "what Tucker did not take a look at is the exodus of drivers from the market. Yes, some new drivers have entered the market, but you have to balance that with what's happening in the total market, as well as the longer term trends."
