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Truck driver shortage in US raises costs for shippers
来源： 编辑：编辑部 发布：2018/05/18 10:55:31
HIGHER freight and shipping expenses are cutting into shippers' profits including those of Hasbro, Kellogg, Mondelez, Coke and Monster, and such rising costs are likely to be passed on to consumers.
Some of the higher costs, which will likely to be passed on to consumers, can be attributed to the shortage of qualified truck drivers in a tight labour market, reported CNN Money.
"There are more attractive options out there for potential truck drivers in a strong economy," said PNC Financial economist Gus Faucher. "It's difficult to find new workers to expand."
Some 70 per cent of goods in the United States hit the highway at some point before they reach your home, according to the American Trucking Associations.
Companies paid six per cent more for trucking in April than a year ago, the fastest growth in almost seven years, according to the US Labour Department.
Tyson Foods CEO Tom Hayes said his company anticipates an additional US$250 million in shipping expenses this year. The company took early steps to blunt the impact but still expects to pass some of the costs on to consumers.
"Product prices must reflect the true cost because we cannot subsidise the increased freight," he said.
One hundred and forty-eight companies in the S&P 500 have mentioned "freight," "shipping," or "trucking" on their earnings calls during the last four months - double the number from a year ago, financial research platform Sentieo found.
Thousands of truckers lost their jobs during the recession a decade ago, but the industry bounced back during the recovery, Mr Faucher said. Trucking companies hired easily and gas stayed cheap, which kept costs from spiralling.
But those costs have soared since late 2016 as hiring for long haul, 18-wheel drivers has stalled. There are only around 500,000 of these drivers in the country, the industry group says. And finding new truckers is proving difficult: overall unemployment is the lowest since 2000.
An aging trucker population, low wages, and a new federal safety regulation that restricts hours on the road have contributed to the squeeze, analysts say.
Without an influx of new drivers, the industry group predicts it will be 63,000 drivers short by the end of the year. To attract new truckers, businesses are increasing pay and benefits, further raising shipping rates. Congress is also considering lowering the interstate truck driving age to 18 from 21.
The cost per mile in the spot market is 29 per cent higher than a year ago, according to DAT Solutions. The longer-term contract rates that big suppliers negotiate with major carriers usually follow the spot market, which means freight costs should stay high in coming months. Contract rates are up 15 per cent this year.
Rising gas prices are contributing to the problem, too. Petrol prices have jumped 22 per cent over the past year to an average $2.87 per gallon.
Some of the higher costs, which will likely to be passed on to consumers, can be attributed to the shortage of qualified truck drivers in a tight labour market, reported CNN Money.
"There are more attractive options out there for potential truck drivers in a strong economy," said PNC Financial economist Gus Faucher. "It's difficult to find new workers to expand."
Some 70 per cent of goods in the United States hit the highway at some point before they reach your home, according to the American Trucking Associations.
Companies paid six per cent more for trucking in April than a year ago, the fastest growth in almost seven years, according to the US Labour Department.
Tyson Foods CEO Tom Hayes said his company anticipates an additional US$250 million in shipping expenses this year. The company took early steps to blunt the impact but still expects to pass some of the costs on to consumers.
"Product prices must reflect the true cost because we cannot subsidise the increased freight," he said.
One hundred and forty-eight companies in the S&P 500 have mentioned "freight," "shipping," or "trucking" on their earnings calls during the last four months - double the number from a year ago, financial research platform Sentieo found.
Thousands of truckers lost their jobs during the recession a decade ago, but the industry bounced back during the recovery, Mr Faucher said. Trucking companies hired easily and gas stayed cheap, which kept costs from spiralling.
But those costs have soared since late 2016 as hiring for long haul, 18-wheel drivers has stalled. There are only around 500,000 of these drivers in the country, the industry group says. And finding new truckers is proving difficult: overall unemployment is the lowest since 2000.
An aging trucker population, low wages, and a new federal safety regulation that restricts hours on the road have contributed to the squeeze, analysts say.
Without an influx of new drivers, the industry group predicts it will be 63,000 drivers short by the end of the year. To attract new truckers, businesses are increasing pay and benefits, further raising shipping rates. Congress is also considering lowering the interstate truck driving age to 18 from 21.
The cost per mile in the spot market is 29 per cent higher than a year ago, according to DAT Solutions. The longer-term contract rates that big suppliers negotiate with major carriers usually follow the spot market, which means freight costs should stay high in coming months. Contract rates are up 15 per cent this year.
Rising gas prices are contributing to the problem, too. Petrol prices have jumped 22 per cent over the past year to an average $2.87 per gallon.