4 Major Factors Contributing to the Capacity Crunch

Industry Insight

4 Major Factors Contributing to the Capacity Crunch

Over the last decade, trucking capacity has continued to tighten, making it increasingly difficult for shippers to find trucks to transport their bulk products. In the annual in-depth analysis of the U.S. logistics industry, “State Of Logistics” report from the Council of Supply Chain Management Professionals (CSCMP), primary author Rosalyn Wilson urged everyone “to begin making contingency plans for the day when you cannot get a truck. Wilson stated that by “every measurement, the trucking industry is compressing, [and] as a result, paying higher [trucking] rates going forward won’t be as much of a worry for shippers as not being able to find a truck to move their freight.”

While the existence of the capacity crunch is clear, the factors causing it are still being unraveled. While a multitude of factors are contributing the crunch, some of the major ones include:

Less Trucking Companies and Fewer Trucks
In 2012, over 5,000 trucking companies went out of business and close to 400,000 trucks were taken off the road. The result was about 8,000 fewer trucks available on any given day, and overall capacity no longer being able to meet the current demand.

Lack of New Drivers to Replace Retiring Drivers
With a large number of veteran drivers approaching retirement age, trucking companies are finding it increasingly difficult to find replacements. Combined with extremely high driver turnover, and growing competition for workers from other sectors such as construction, this lack of new drivers has played a large role in the capacity crunch.

Economic Factors
During the recession, many carriers held onto tractors and trailers longer than they normally would have because they couldn’t afford to replace them. However, as the economy improves, and carriers are in a position where they can finally afford to purchase new equipment, the sudden demand for new tractors and trailers has added to the issue.

Government Regulations
New government regulations such as Compliance, Safety, Accountability (CSA) and the New Hours of Service Rules are also affecting capacity. Industry analysts believe that the Compliance, Safety, Accountability program, which was designed to make roads safer by measuring trucking company and driver performance, could result in as many as 200,000 drivers losing their jobs. Furthermore, the New Hours of Service Rules is impacting scheduling and increasing prices for shippers.

 

The Solution

Capacity Management Specialists

All of these factors contributing to the capacity crunch are making it harder for shippers to run their businesses efficiently and get their products to customers on time and on budget. A promising solution for dealing with the capacity crunch is working with experienced Capacity Management Specialists, such as Bulk Plus Logistics. As North America’s premier provider of “bulk” related logistics, Buk Plus Logistics experienced team of experts help customers manage fluctuations in their business by locating and securing transportation resources throughout North America.

 

Next Steps

Request a Solution

Customers rely on Bulk Plus Logistics to secure capacity through our established network of approved carriers, eliminating the challenges your resources encounter on a day-to-day basis. Let our logistics experts analyze your situation and recommend the best solution to your problem!