During the first quarter of 2014, managing shipments to our customers has been as challenging as ever! This is predominantly due to a “great recession” in the transportation industry. Although we do everything we can to mitigate the effects to our customers, we thought it might be helpful to share with you what’s happening with US carriers.
There is no doubt that right now carrier capacity has become tight and we are currently in a driver’s market. Some of the various factors contributing to this shortage of capacity are an increase in government regulations around hours of service (HOS), the current shortage of drivers, and the lack of funds for infrastructure. Add to this the record-breaking number of truck breakdowns and missed loads due to a harsh winter and the Polar Vortex, and you’ll find many carriers are still playing catch up! In general, many transportation companies have been experiencing decreased levels of productivity and on-time deliveries.
So why is there such a shortage of drivers and trucks? There are many reasons, but the primary one is the government’s new HOS regulations. A new law was passed July 1, 2013 restricting carriers to fewer hours per day of equipment utilization, which pushed carriers to increase capacity and rates paid to drivers. CH Robinson estimates the industry will need to add 20,000 new trucks into the market each month just to keep up with current demand and the aging fleet of current trucks. Unfortunately this could lead to transportation rate increases as high as 10% for the 2nd and 3rd quarters of 2014.
Here at Gamer Packaging we will continue to closely watch this industry so as to continue to offer our customers only the most reliable and competitive freight options. We’ll work with you to plan future shipments and orders so that your packaging arrives when and where you need it!
Contact your local sales representative with any questions 612.788.4444.