Trucking Industry vs. Railroad Industry

I just had a meeting with a representative from a large trucking company. I wont say the gentleman's name or which company he works for, but the company is one of the larger intermodal shippers in the country. He stated that it was extremely difficult to recruit new drivers and that drivers are requiring more and more time at home so the truck driving market is very tight on long distance drivers. He went on to say that most of the drivers had been with the company for many years and the average age of a driver was 56 years old. This means that many of them will be retiring within the next 6 years.

I'm sure it is the same situation for the other trucking companies around as well. I knew that companies were having difficulties finding drivers, but I didnt know that it was this bleak. I'd say within the next 5 years, many of the trucking companies will look for more and more opportunities to ship via rail as the market for drivers gets even more tough.

This could be a good opportunity for the railroads if they play their cards right. Investments should be made now in the intermodal yards and capacity along their lines. With the proposed boom in freight in the next decade, I'm not sure the trucking industry will be able to handle the extra volume. If the railroads dont cooperate, look for a lot of shipments taking much longer to get anywhere.

Since this topic is not specific to New Jersey, I have moved it.

-otto-

Really nothing new............I'm in the food distribution industry, and many of our suppliers have indirectly increased the use of the railroads in the last 2 years due to lack of long haul drivers and higher fuel costs. I say indirectly because many top food manufacturers outsource their carriers. It has added lead time, but if you work within the parameters you are given and forecast effectively, its really proven to be reliable.

The Memphis and Chicago service lanes seem to be the most reliable these days. There is a need for efficiency/opportunity in the Atlantic Service Lane. When Fruits/Vegetables are ready to go out of the Southeast states come June/July...Carrier availability really suffers in the I-95 corridor.......

maybe its time for rail and road operators to cooperate more , and wrok together to use what each other does best . that is , rail for the longhaul , road for the shorthaul and delivery . I geuss to do this rail would need to leave enough margin in it for the trucker to be able to use their service , add their margin and still offer the customer a good deal .

It is highly unlikely that this is a serious issue. The trucking companies are peeved because with NAFTA they were supposed to be allowed to hire Mexicans to drive at the wages American companies tend to pay Mexican citizens, but the highway safety lobbyists scuttled the deal.

If the trucking companies need labor the solution is to pay their drivers more, supply and demand, the free market credo. Trucking companies were primarily union, they went to nonunion in order to pay less, and now they want to import still cheaper labor. Pay is the problem, not american willingness to work.

RR's should be right in this fight, it is to their benefit that lower human capital costs of their mode should translate into a price advantage for rail over road.

This could be a large problem for the shipping industry as higher pay means the trucks will have to raise prices to match. This is going to send them scrambling for ways to gain a competitive advantage and the railroads might have to be there to pick up the slack. Unfortunately without the right resources spent for capacity and yard issues, the industry will probably get slower and slower for years to come with reliablity at an all time low.

Highway freight has more exposure to energy prices and labor prices because to move a pound of freight over the road takes more gallons of fuel and more man hours. Rail is more efficient. The solution is not slave labor rates for truckers, it is make the companies compete for labor like everyone else, and if it puts them at a price disadvantage then maybe the industry is due for a fall.

You gotta love these guys...free markets are the holy grail, except when they don't like the results and then they need to be subverted.

The driver shortage issue has been around for years. A colleague of mine wrote his Master's thesis on this subject 15 years ago. Though improved over the years, the pay is relatively low and the lifestyle makes you realize how good railroaders have it. Many of the long-haul carriers have turnover exceeding 100%, meaning that if you had a fleet of 1,000 drivers, you'd need to hire 1,000 drivers a year just to maintain your workforce.

Railroads and truckers already do cooperate to a large extent. Intermodal allows truckers to take advantage of improved rail long-haul economics (where it applies), it improves driver morale (many work the local hauls from terminal to customer, so are home much more often), and lessens the need for drivers. Downsides: slower transit time and larger infrastructure needs (terminalling, etc).

Cases in point: UPS is one of the US's largest rail users. JB Hunt owns more intermodal containers (~27,000) than trailers (~23,000). Schneider, Swift, Dart, and NFI all own significant container fleets. Many LTL carriers, such as Yellow Freight, move significant volume over the rail in 28' intermodal pup trailers. Even Fedex uses intermodal, though to a lesser extent.

On occation althow rare I have seen these local trucking firms use rail as well:

Roadway
Overnight
Boston-Buffalo
Navajo
Ol'Dominion
England
Marten
TNT Red Star before the company broke up.

Interestingly, Overnite was actually owned by UP... which sold it to UPS in a few years back.

What outher trucking companys were or are owned by UP??

For a while BJ's was leaseing a number of Former Union Pacific trailers for Storage. 4 of them spent some time at the BJ's Store in Auburn, NY as well as a small number in DeWitt, NY all were full of of old junk tires.

Intermodal trailers? I believe UP has divested of effectively all its intermodal equipment, with the exception of their "Bulktainer" ISO tank container fleet (which is managed in large part by Chemlogix in PA). Not sure about years ago, but UP is strictly an intermodal wholesaler now and have no ownership in trucking companies.

well if we enter recession there wont be a shortage becaseof less shipping and also laid off workers takig the trucking jobs

I don't consider one company to be a good representative sampling of the trucker demographic. The transportation industry tends to beat up its newcomers; I suspect that an intermodal is a better job (more stablity and time at home) so they would tend to have and retain more "late stage career" employees.

A long-haul trucker probably has younger employees. I don't see too many trucks going down the interstate with a turn signal on...

I welcome the increased rail freight traffic even as I complain about gas prices.

I worked in trucking, primarily as a central dispatcher, in the years 1972-1981, just after completing college, then returned for a single year with a private fleet in 2006. I can attest to the fact that the industry changed drastically over that time.

The Interstate Highway System was just about complete by the time I started out, and the future prospects for the industry looked very bright, with whole industries, such as finished steel and dressed meat, diverting their traffic away from the rails for good.

In those days, with economic regulation still in effect, most of the major trucking lines operated in manner similar to the railroads -- that is, a shipment was picked up by a local driver, taken to a terminal in a medium- or large-sized city, combined and taken to a "breakbulk" or sorting hub, possibly transferred to another trailer, shippped to its destination terminal, and finally delivered by another local driver.

If a company didn't have regulatory authority to serve a certain point or community, it had to turn that freight over to a carrier that did. State College, Penna, for example, got most of its deliveries from three carriers.

Line-haul drivers could pick up and deliver enroute, but only for truckload shipments, and this was the exception rather than the rule. Drivers generally ran from terminal-to-terminal, logged off 10 hours for sleep, and made their next run. Senior men got three overnight round trips a week, and a few got "fast turn" status allowing them to be home every night.

With the coming of deregulation in the late 1970's, the majority of the major terminal-to-terminal common carriers found themeselves with gaps in their operating authority. This allowed the handful of firms which were already well-funded and established (Roadway, Yellow, ABF) to fill in the gaps on their own, while many under-funded firms went out of business. Of the top 100 carriers listed by Commercial Car Journal in 1971, less than ten remain in business.

Most of the prominent present-day trucking firms concentrate on truckload, door-to-door business, although a few, such as Old Dominion, are trying to develop an LTL operation. The emergence of a mobile society has made a life on the road easier, so the focus in recruitment has been toward getting the driver home for the weekend, while staying out during the week. A change in hours-of-service rules, which allows a driver to regain his full 60-70 hour per week quota after 34 hours off duty at home, is central to this strategy.

Finally, during the early phase of my trucking days, racial segregation within the industry had not yet been significantly addressed. The first firm I worked for had fewer than twenty non-Caucasian drivers out of a pool of 550. My most recent employer had a fully-diverse work force, but while a group of veteran drivers provided its most stable element, turnover among recent hires was very heavy, and the majority spoke English as a second laguage. Most suprising to me was that a handful had learned to drive in the Russian army before emigrating here.