Prevent Losses by Combating the Driver Shortage

The transportation and logistics industry has been struggling with the driver shortage for the past 15 years, but manufacturing companies are beginning to feel the impact of the shortfall firsthand, with the food and beverage industry being no exception. According to a recent survey from the Institute for Supply Management, food manufacturers are finding it difficult to deliver their products on time post-production. As a result, both trucking and manufacturing companies must together find a way to adapt to the trucking capacity shortage.

Driver Shortage Challenges

According to the American Trucking Association (ATA), at the end of 2017 the trucking industry was short 51,000 drivers, up from 36,000 in 2016. As companies do everything within their power to retain current drivers and attract new ones with a diverse array of recruitment initiatives and bonus incentives, the ATA still predicts 2018’s numbers will trend even higher. The effects of the driver shortage become more pronounced among carriers and shippers as, coupled with rising driver compensation and diesel fuel costs, rates to transport goods also continue to go up. Dry goods not requiring refrigeration or other special handling now cost more than $1.85 per mile to ship, an almost 40-cent increase from a year ago.

The shortage runs the risk of disrupting the food and beverage industry’s supply chain, particularly in shipping food products from manufacturers and distributors to end users, like grocery and convenience stores. The industry already runs a lean supply chain, but this becomes less manageable when service and lead times are affected. In the Institute for Supply Management’s recent survey of manufacturers, those in the food and beverage sector noted that the trucking capacity shortage was impacting delivery times and delaying product deliveries. For retailers operating with minimal back stock, these delays can lead to inventory shortages producing substantial losses. According to the Food Marketing Institute, grocers lose $75 billion a year in sales due to out-of-stock or unsaleable goods, often the direct result of late deliveries. Freight costs are now a pressing concern for major food manufacturers, with many of the top publicly traded brands discussing transportation budget increases during recent earnings calls.

Combating Driver Shortage

Transportation and logistics companies confronting issues head-on have implemented many quick solutions, such as pay raises, signing bonuses, and shorter hours where feasible. However, when looking to partner with a shipping provider, food and beverage companies should consider those that have implemented more long-term solutions for attracting and retaining drivers. Such programs include:

• Future driver apprenticeship programs targeting high school students to provide a pipeline of drivers and address the three-year career vacuum created by government regulations prohibiting anyone under 21 from obtaining a CDL Class A license;
• Dock-to-Driver programs allowing employees to progress from performing dock operations to a non-CDL driver, followed by enrollment in a Class A CDL training program; and
• Truck driving academies, certified by the Professional Truck Driver Institute, which pay employees their wages during the program and upon successful completion guarantee them employment with a company.

In addition to seeking a transportation partner with long-term recruitment, training, and development plans in place to grow its driver numbers, food and beverage companies should also seek a provider offering uniquely engineered solutions and services capable of improving the efficiency of their supply chains. Some of the solutions a partner should provide include the following.

Engineered solutions. Perhaps the most important trait to look for in a logistics provider is one that can deliver a comprehensive evaluation of current transportation supply chains and tailor a custom solution to alleviate long-term driver staffing issues.

Tracking. Select a company that is equipped with the latest shipment tracking technology, so any delays can be immediately communicated to the customer.