In today’s world of “just in time” logistics and the “I got to have it now” mentality of American buyers, have we pushed the bar so high that the trucking companies are unable to achieve realistic service capabilities? While shippers have gotten smarter and implemented policies to help them streamline their processes such as appointment deliveries, routing restrictions, and service requirements, these stricter requirements have put more and more pressure on carriers to deliver.
Over the years, many carriers have responded by shortening their transit times to meet the ever increasing demand of customers to get their products quicker. In my environment as a consultant, my company services over 100 customers and we track the on-time performance of carriers across our entire customer base. I have seen a decreasing percentage in on-time performance over the past 18 months. Having worked with most of these carriers for over 20 years I can honestly say that these drops in on-time percentages are not attributed to poor management or weak service capabilities.
To elaborate on the increasing demands upon carriers to improve service times, these times are affected by many outside factors. One particular factor is the driver shortage. We have been hearing of a driver shortage in the LTL industry for the past 15-20 years and it is finally here. Since the country has not fully recovered from the recession of 2008-2010, most carriers have not built their networks back up to pre-recession levels. Drivers have continued to age out and the attrition rate is higher than that of new drivers entering the industry. This puts pressure on their service capabilities. Another factor is the requirements that shippers put on their carriers. With delivery appointments becoming more commonplace, carrier windows of opportunity for on-time delivery are further strained as the metrics involved putting delivery schedules together become more intricate thus lowering delivery capabilities per truck.
Many shippers continue to put more and more emphasis on on-time performance while continuing to twist the delivery standards to a point that these on-time performance numbers become unattainable. At some point this levee will break. With the continued consolidation going on in our industry, we may reach a point where we will not have enough carriers to serve our needs due to increased service levels by shippers causing carriers to re-evaluate the way they do business. Perhaps the time has come when we may have to ask the question that as shippers, “Have we set the bar too high?”
About our Guest Blogger
Author: Brian Damiani, Vice President of Carrier Partnerships at Simplified Logistics. Brian is currently on the board of directors of NASSTRAC and has served on the Provider Relations Committee. He also volunteers his services in coordinating the golf outing at NASSTRAC annual conference.