Driver Shortages & Increased Regulations Lead LTL Shippers to Consolidate

In an article published last week on the Logistics Management web page reporters are stating that LTL shippers may be faced to further consolidate sooner rather than later due to the looming threat of a driver shortage and the increasing federal regulations that are being put into place. The LTL industry operates in a situation where rates have stabilized leading to increased competition amongst industry players. Profits are in turn measured as cents on the dollar leading to a much lower profit margin percentage. This industry characteristic has left many just barely operating for profit with many others constantly on the edge of a loss. Interviewed was Steve O’Kane president of A. Duie Pyle who stated that the fit will survive will the rest will begin to fade our of the competitive landscape. He suggests that the best enabler in creating efficiencies to be successful in operating in such a low margin environment would be the utilization of technology systems.

O’Kane states that one of the biggest issues effecting the industry is the shortage of truck drivers due to an aging work force and the lack of new truck drivers coming into the industry. In addition to this shortage the government has put a program in place called CSA, Compliance, Safety and Accountability, which scores a driver/carrier and keeps record of their incidents and violations from the code (see video below for program overview). However, a major criticism is that not all have scores making comparison a difficult task. Pyle prides their workforce as a competitive advantage that should help shield them from major harm cased by the shortage.

 

For Further Reading Please Visit the Following:

http://csa.fmcsa.dot.gov/default.aspx

http://www.logisticsmgmt.com/article/ltls_facing_growing_threat_of_labor_shortages_increased_regulation_that_cou/

http://www.natera.org

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