Consumer demands have been steadily increasing over the past few years. With the dramatic increase in online shopping and the rise of the pandemic, the supply chain has become overwhelmed. Truck drivers have especially been pushed to extreme levels and the truck driver shortage has created major problems within the supply chain.
In 2019, the American Trucking Association estimated that it would need around 60,000 drivers to offset consumer demand. However, because of the pandemic these numbers have spiked. If this trend continues, that number could increase to nearly 160,000 drivers in the next ten years. The trucking shortage remains a major concern for the supply chain in the coming year.
For third-party logistics (3PL) warehouses, the truck driver shortage creates numerous problems. So, why is there a truck driver shortage and how does this affect the 3PL industry?
Reasons for the Truck Driver Shortage
For more than two decades truck drivers have fulfilled the transportation needs of nearly every sector in America. But with the rise of the pandemic, consumer demands were too high for the already diminishing numbers of the trucking industry. The truck driver shortage has increased for a few reasons:
1. A High Turnover Rate
- A tight labor market where drivers are in demand creates a high turnover rate. As the demand for drivers increases, safe and productive drivers realize job security and can move on to other companies within the same niche often for better benefits or compensation. The slightest dissatisfaction can create a high employee turnover rate and can create unpredictability in a transportation company’s ability to deliver.
2. An Aging Demographic
- As these high turnover rates stay in effect, there is also an aging demographic of truck drivers causing some to leave the industry entirely. According to the Bureau of Labor Statistics, the average age of a commercial truck driver is roughly 55 years old. With such a high average age, many drivers are approaching retirement age, leaving the industry, and decreasing the amount of available drivers.
3. Intense Working Conditions
- Truck driving requires incredible stamina and discipline. Truck drivers are enclosed within a small space for multiple hours at a time, all while being subject to sudden weather changes. Problems with eating healthy can be prevalent especially for interstate drivers. Interstate drivers also have to deal with being away from family and friends for extended periods of time, adding to the difficulty of the job for most drivers. Among other challenges, drivers are susceptible to road accidents and increased chances for nighttime driving.
How does this affect 3PLs?
3PL warehouses work to fulfill the needs of their customers. The truck driver shortage represents a growing concern for supply chain operations and more importantly, how those supply chain hiccups affect 3PLs. According to the latest statistics from the Bureau of Transportation Statistics, more than 70% of all freight within the United States is transported by truck. With the lack of current truck drivers, 3PLs face challenges to receive and move freight to meet customer and consumer demands.
3PLs are at the heart of the supply chain. The receiving, storing, and shipping of inventory are essential to the everyday functions of a 3PL warehouse. The truck driving shortage creates uncertainty at times of when inventory might become available to deliver to a 3PL warehouse and also causing concerns about delays of outbound shipments as well. As such, mitigating the challenges that the truck driver shortage creates is incredibly important. With fewer drivers on the roads and expectations to fulfill, 3PLs will have to work harder than ever to meet customer and consumer demands.
How can 3PLs Mitigate the Risk Created by the Shortage?
In today’s supply chain, being adaptable and flexible in a changing environment is essential. One thing that supply chain issues have highlighted are how essential truck drivers are. The supply chain is hurting, and the truck driver shortage has taken a huge toll on freight transportation. But how can 3PLs manage during this difficult time?
In order to manage the current challenges, strategic plans and a strong foundation are essential. Continue being vigilant to reach peak operational status and finding new ways to boost fulfillment efficiency. Consider adopting technology best practices, including:
- Dock scheduling to create more efficient warehouse receiving operations. Dock scheduling can help you know exactly when deliveries plan to arrive so you can better manager your receiving labor scheduling and be sure to have dock doors available. From freight transport to dock loading, readily preparing your warehouse with technology and automation can create huge benefits.
- Automate the receiving process. With supply chain backlogs, you can’t always tell when you might receive a surge of inventory. By implementing barcode scanning, you can react quickly to large receipts and get inventory put away so you can start fulfilling orders as soon as possible.
- Consider diversifying shipping carriers, as this will allow you to more easily pivot when one carrier experiences more significant delays
- Adopt a warehouse management system (WMS) to allow for more transparency with inventory and storage. Real-time visibility is absolutely key when dealing with supply chain disruptions.
The truck driver shortage isn’t going away. The landscape ahead is tricky, but with automated processes and an emphasis on risk mitigation, 3PLs can minimize the impact of the driver shortage on their customers.
To learn more about labor issues and the top trends from 200+ 3PL warehouse professionals, click here to download your copy of the 3PL Central Third-Party Logistics Benchmark Report.
Written by Chad Kleiman
Chad Kleiman is a member of the marketing team experienced in various aspects of marketing and the supply chain as he seeks to share his knowledge with the third-party logistics industry at large in an easily digestible format.