Truck driver shortage persists
The trucking industry has its own set of regulatory and industry issues. As with railroads, there also are concerns about truck safety, which has in part been addressed by legislation restricting drivers’ hours of operation. But perhaps a greater concern is a lack of truck drivers, a problem that has plagued the industry for years and is expected to worsen, and more recently, a lack of truck technicians and mechanics.
The A.T.A. cited U.S. Bureau of Labor Statistics data that said 67,000 new technicians and 75,000 new diesel engine specialists would be needed by 2022 due to growth or to replace those currently working in the industry.
The truck driver shortage currently is estimated by the A.T.A. at 35,000 to 40,000. The shortage is in part gauged by annual driver turnover (drivers changing jobs), which was at an annualized rate of 95% for large truckload fleets in the fourth quarter of 2014, down one percentage point from 2013, and was at 90% for small fleets (less than $30 million annual revenue), up 11 points. Turnover at less-than-truckload fleets (indicating shorter hauling routes) was 11% in 2014, unchanged from 2013.
“These figures show us that the driver shortage is getting more pervasive in the truckload sector,” said Bob Costello, A.T.A. chief economist. “Due to growing freight volumes, regulatory pressures and normal attrition, we expect the problem to get worse in the near term.” Although turnover declined in all three categories in the first quarter of 2015, Mr. Costello said he “would not be surprised” if turnover increased as the year progresses.
In July the A.T.A. issued a report projecting a 29% increase in freight tonnage and a 74.5% increase in freight revenues to $1.52 trillion over the next 11 years. Trucks remain the dominant mode of freight transportation, accounting for 68.8% of the total in 2014, although trucking’s share is expected to slip to 64.6% by 2026. Railroads’ total share of freight tonnage was estimated at 14.2% for 2015, and was expected to slip to 12.3% by 2026, although intermodal was expected to grow 4.5% annually through 2021 and 5.3% annually thereafter. The study said that pipelines will benefit most due to the “tremendous growth” in U.S. energy production. Pipeline volume was expected to surge 10.6% annually through 2026 with pipelines’ share of freight rising from 11% in 2015 to 18% in 2026.
“The outlook for all modes of freight transportation remains bright,” Mr. Costello said. “Continued population growth, expansion of the energy sector and foreign trade will boost trucking, intermodal rail and pipeline shipments in particular.”
The A.T.A.’s for-hire truck tonnage index was 134.2% (2000 base = 100) in August, down about 1% from July but up 2% from August 2014 on a seasonally adjusted basis. For all of 2014 the index was up 3.7% from 2013, with 2013 up 5.5% from 2012.
With the exception of hopper trailers in high demand during fall harvest, the current truck market is “loose,” said Michael Preisinger, managing director of Agforce Transport Services, Leawood, Kas., indicating there are “plenty of trucks” available to move freight at lower rates.
Ocean freight rates remain low
As with rail, barge and ocean freight transport appear relatively calm so far in the fall harvest period, other than usual disruptions for lock and dam report or accidents. As of Sept. 29, barge freight rates from St. Louis southbound on the Mississippi river were 535% of tariff (1976 = 100%), or $30.02 a ton, up slightly from a week earlier but down 39% from a year ago, according to the U.S.D.A. Year-to-date barge grain movement through Sept. 26 totaled 15,778,000 tons for corn, down 5% from the same period last year, 1,579,000 tons for wheat, down 21%, and 6,961,000 tons for soybeans, up 40%.
“As of Sept. 29, spot barge rates at most locations increased 2% to 7% compared to last week,” the U.S.D.A. said. “Barge rates have steadily increased each week during September as shippers obtained barges for the beginning of this year’s corn and soybean harvest.”
Barges typically move about 60% of corn and 40% of wheat and soybeans to ports for loading on ocean vessels for export.
The U.S.D.A. said the cost for shipping bulk grain from the Gulf to Japan was $34.44 per tonne in September, down 25% from September 2014, and for shipping from the Pacific Northwest to Japan was $18.19 a tonne, down 29%, although rates were beginning to advance later in the month.
“Grain vessel loading activity in the U.S. Gulf continues to get stronger while bulk ocean freight rates continue to remain low,” the U.S.D.A. said in mid-September. A key factor in low ocean freight rates has been excess vessel capacity.
Low bulk ocean freight rates have contributed to lower container rates as well, Mr. Preisinger said, although he noted that current rates were up $500 to $1,000 per container from a few months back as imports from Asia are at their peak ahead of the holiday season. Those rates will begin to decline in November, he said.
A number of critical issues remain for agricultural transportation, including repair, replacement and upgrade of the nation’s transportation infrastructure, a key issue at the August Ag Transportation Summit.
In the near term, though, grain movement appears to be running smoothly in all sectors. As the harvest winds down later in the fall, weather will be the determining factor affecting grain transport.