The logistics problems that plagued freight across the U.S. during the height of the pandemic were, some hoped, a transient problem that would iron itself out as commercial activity returned to normal. The state of shipping in 2021, however, has made it clear that it will be a long time before shippers can expect to be able to move their inventories with the pre-pandemic ease they were once used to. Here’s why freight—the trucking sector in particular—is so impacted, and what you can do about it.
In 2021, the freight picture has been an ongoing story of increased demand colliding with reduced supply. Cass Information Systems’ July 2021 shipment index, which measures intracontinental freight shipments and less-than-truckload in North America, was 1.177, or about 15.6% higher than July 2020. That number is usually in the normal range for the index, but this year, that was a five-month low.
Several factors are combining to keep trucking capacity below what it should be to keep up with demand. The first is the lack of drivers. From February to April of 2020, the Bureau of Labor Statistics recorded a drop in trucking employment from 1.52 million to 1.43 million. That number slowly rose again over the intervening year, increasing to 1.49 million as of the end of July 2021. However, that means the trucking industry is still short 33,000 drivers, compared to before the pandemic.
A lack of commercial driver’s license training is partially to blame for the slow recovery. Even when driving schools were able to operate, social distancing requirements constrained their ability to instruct multiple candidates at the same time. Estimates are that 40% fewer licenses were issued in 2020 compared to prior years.
The debut of the Federal Motor Carrier Safety Administration’s Drug and Alcohol Clearinghouse in January 2020 has also played a role in reducing the driver pool. The centralized database, which tracks drivers who have tested positive for drug use, has flagged more than 70,000 drivers since its inception for drug or alcohol violations—an undoubted good, as it removed potentially dangerous drivers from the road. Unfortunately, only 10,000 drivers among them have started the return-to-duty process to restore their ability to drive commercially, further reducing the labor pool.
Finally, the growing demand in parcel delivery and in related warehouse work is competing for those who might otherwise be employed in trucking, having spiked upward in mid-2020 and staying high in 2021. This is clearly linked to the increase in e-commerce, which is about 35% above pre-pandemic levels according to a 2021 McKinsey & Co. report.
The deficit in skilled labor is not the only problem. Trucking companies are suffering from a lack of sufficient equipment in 2021, which has been made worse by a shortage of the microchips needed to make new trucks. Manufacturers simply aren’t able to produce enough new trucks to meet demand. The result is not enough trucks and not enough people to drive them. This creates an ongoing challenge for companies needing to get their freight to its destination reliably and a seller’s market for carriers.
When you don’t have the time to track down a trucking company that can take your shipment, neglecting your core business as you try to get your goods out the door, you can depend on Clear Lane Freight Systems. Founded in 2021 by LTL industry veterans, we’ve built a sizeable network of pickup and delivery carriers around the country to give our customers reliable service at cost-effective prices no matter what challenges face the economy at large. Our LTL services for less time-sensitive goods offer both the flexibility to keep shipments moving in an unpredictable market and the visibility you need for confidence in business planning. Our technological tools and friendly, professional customer service team ensure that you always have timely, up-to-date information on your shipments. To find out more about how Clear Lane Freight’s services and competitive pricing can help you meet your business goals now and into the future, contact us here.
If you are interested in finding more about the services and pricing Clear Lane has to offer, please contact Sales