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Understanding Truckload Capacity

Posted in Shipping on Jul 15, 2016, tagged with freight shipping

The overall state of the industry affects the shipping capacity of all carriers, regardless of their size. Even the moving truck capacity of your local long-distance mover is affected—and this may impact your moving schedule and costs. Less capacity means fewer trucks available to move your items, which translates into tighter schedules and increased costs. Conversely, more trucks can translate into cost savings for shippers. But why does truck capacity fluctuate in the first place? Read on to learn more about this interesting topic.

What Causes Capacity to Rise and Fall?

Truckload capacity is based on more than simply the number of trucks on the road or sitting in the lots of trucking companies. Vital factors include:

  • Weather Conditions
    Extreme weather, especially snowstorms of the type seen in the Midwest and Northeast during the past few winters, can quickly shut down roads for long stretches of time. This affects not only the snowed-in regions, but also the entire nation, as trucks cannot travel from those regions directly affected by the weather to deliver goods to unaffected areas. Truck capacity decreases and shipping costs increase.
     
  • Seasonal Variations
    What are the peak shipping seasons? Spring through early to mid summer is the harvest season, when truckers are hauling huge amounts of produce across the country. The next peak season is between August and October, when the demand for back-to-school and holiday item shipping skyrockets. During these peak seasons, fewer trucks are available to ship other goods, so shipping costs may rise.
     
  • Truck Driver Shortage
    Currently, the shortage of drivers is depressing truck capacity. According to the American Trucking Association, the industry was short 48,000 drivers as of December 2015. Others put the number at closer to 100,000. Why aren’t there enough drivers? Driving is stressful, long hours and days on the road mean less time spent with family — and pay rates are relatively low. As more and more drivers retire, trucking firms are finding it difficult to replace them. Some companies are offering increased pay, better conditions and non-monetary incentives in an attempt to attract more drivers. But until the driver shortage issue is solved, shippers can expect to experience lower capacity and higher costs.
     
  • Increased Regulations
    A number of federal and state regulations that recently have been implemented or will go into effect soon also have an impact on productivity and capacity in the trucking industry. Let’s mention a few:
     
    • Hours of Service (HOS)
      The HOS rules mandate the maximum hours that a driver can be on the road during long hauls, and it also includes a reset requirement. While not going into too much detail here, the net result of the HOS rules is leading to decreased productivity and increased rates.
       
    • California Air Resources Board (CARB)
      Every truck operating in California is subject to strict emissions standards. In order to meet this requirement, carriers must purchase costly newer-model vehicles or after-market devices.
       
    • Electronic Logging Devices (ELD)
      ELDs, which replace paper logs for recording hours of service, will be required beginning in December 2017. While the results cannot be known at this time, it is expected that the purchase price and the ability to deploy these ELDs will further reduce truck capacity.
  • Escalating Costs
    The bulk of the cost in the trucking industry is attributable to equipment, fuel and labor. The costs of vehicles, parts, maintenance and repair rise constantly. Fuel costs fluctuate, but they generally increase over the long run. And when fuel costs rise, the increases are reflected in the rates paid by shippers. Labor costs are rising significantly as companies compete for the limited number of experienced drivers by offering greater salaries and benefits.

Why TSI?

As a national carrier, TSI is well equipped to handle all our customers’ shipping demands. We utilize several different freight carriers, matching your shipment to the carrier best suited to getting it where and when you need it delivered. We pass our carriers’ volume discounts on to our customers, so you always get the lowest rates possible — plus, you benefit from our extensive experience and great customer service.

Contact one of our a specialists for more information about our rates/services or to request a quote for your next shipment.