The insufficient number of truckers paired with the growing demand for freight transportation is pushing the industry into a substantial capacity crunch. By the end of 2017, there were around 50,000 unfilled positions for drivers across the U.S. Experts say that the shortage can reach 174,000 by 2026 if the trend continues.
The shortage of drivers is radically shaping the current transportation landscape. It leads to a hike in freight rates as truckers expect higher salaries and benefits. They can also demand better working conditions and have more leeway to choose which shippers to work with and what loads to accept or refuse.
In the same time, new regulations such as the Electronic Logging Devices (ELDs) required of motor carriers are also tightening the grip. This may further decrease the number of available drivers, as many would not want to or be able to meet the new rules.
In this challenging setting, shippers can greatly benefit from working with established and trustworthy freight brokers. Here is why:
Access to numerous trucking options
Typically, shippers who work directly with carriers would partner with a few of them, as there is no sense to use more options. However, as the driver shortage increases freight rates, companies looking to ship their loads are losing bargaining power. They may have to succumb to very high pricing or unfavorable conditions.
Working with a freight broker can be of help in such cases. Brokers navigate large networks of hundreds and thousands carriers. This gives them flexibility and allows them to still have the ability to bargain. They can find cheaper and better transportation options among their partnerships. Besides working with the financials, brokers may be able to negotiate transportation for unpopular routes or loads.
This exclusive access is due not only to the breadth of brokers’ networks, but also because they have long-standing relations with carriers. Brokers are better tailored to understand drivers’ priorities and help them optimize their workload. In return, carriers are more likely to work with a trusted partner who caters to their needs.
Ensuring ELD compliance
As of December 2017, the Federal Motor Carrier Safety Administration (FMCSA) requires motor carriers to log hours of operation via ELDs. The goal of automatic logging is to avoid manipulation of working hours, thus decrease accidents caused by tiredness. However, for many carriers this limits flexibility and may lead to a capacity reduction. Compliance with the ELD mandate is difficult for some companies and some owner-operators are expected to retire as a result.
For shippers, it’s crucial to work with ELD-compliant carriers. This ensures their shipments will be transported without delays that can be caused by carriers who do not have the necessary devices. Brokers need to keep an overview of their partners’ ELD compliance. Many have stepped up the language in their contract agreements to include better security against motor carriers who fail in using electronic logging. In this way, they can better guarantee to shippers a seamless transportation process.
Better efficiency and valuable expertise
Besides helping shippers cope with higher freight rates, insufficient transportation options and ensuring ELD compliance of motor carriers, working with a freight broker has additional benefits. It provides companies that need to transport their loads with better efficiency, as well as more safety in the process due to security instruments such as the freight broker bond that all brokers have to maintain.
With the help of a broker’s network of carriers, a shipper’s freight can be transported in the most effective way, both in terms of time and money. In the current capacity crunch, this helps shippers avoid delays and improve bandwidth, which ultimately leads to financial savings and prevents losses.
Additionally, freight brokers can be a valuable source of expertise due to their experience and connectedness in the industry. They need to keep track of upcoming regulations and business trends so their knowledge can be used by shippers too. Working with freight brokers and 3PLs can help shippers decrease their transportation costs by improving their supply chain management.
