• ITVI.USA
    15,341.400
    78.550
    0.5%
  • OTRI.USA
    24.780
    0.360
    1.5%
  • OTVI.USA
    15,289.500
    66.220
    0.4%
  • TLT.USA
    2.690
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,341.400
    78.550
    0.5%
  • OTRI.USA
    24.780
    0.360
    1.5%
  • OTVI.USA
    15,289.500
    66.220
    0.4%
  • TLT.USA
    2.690
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
LogisticsNewsTruckingTruckload Carriers

Trucking to see ‘more of the same,’ says Ryder’s Belter (with video)

Lack of drivers a creeping concern for the industry

Changes in technology, labor regulations and emissions, as well as a potential driver shortage and rising insurance costs, are just some of the challenges facing the surface transportation industry, according to  Dave Belter, vice president and general manager of transportation management with Ryder System (NYSE: R).

Belter told FreightWaves Chief Strategy Officer JT Engstrom during a virtual fireside chat at The Future of Logistics Real Estate summit Tuesday that there are “a lot of uncertainties and a lot of changes in the industry as a whole” for carriers trying to serve their customers and grow their businesses.

The transportation veteran with more than 30 years at Ryder said heading into 2020 the expectation was for the trucking market to be more balanced after 2019, which he described as a year for the shipper. Currently, he sees a “very choppy economy” with industries like aerospace, leisure and travel still lagging broader demand. The choppiness has resulted in carriers having out-of-balance networks as they deal with volume surges and inventory replenishment that hasn’t been evenly distributed geographically.

Additionally, nontraditional freight lanes where carriers are now accepting loads at the factory instead of at distribution centers has “thrown the North American surface transportation networks into a bit of a chaos” as the retail holiday shopping season approaches, Belter added. He said this dynamic has been evident in the spot market data, which shows loads have nearly doubled compared to last year.

In the current market, Belter said carriers are being tasked with balancing between helping newer customers that were taken on to fill idle capacity during the depths of the pandemic with their traditional customer base, some of which is just coming back online. As far as shippers and third-party logistics providers, they are making sure they have “locked down” capacity for the remainder of the year, which means bringing in new carriers that they haven’t worked with before.

The market for qualified drivers has been impacted by COVID significantly. Belter said many of Ryder’s carrier partners have indicated that they have the freight demand to seat a significant number of additional drivers. Some have said that 10% of their trucks are parked due to the lack of available drivers. Belter believes driver recruitment is back to being one of the “top challenges” for carriers moving forward as driver school enrollment is down due to social distancing requirements.

He pointed to some potential driver recruitment opportunities. Dislocation in the oil and gas industry as low energy prices have driven diminished demand and overall high unemployment could attract new drivers to the market. He also noted recent driver pay increases from some carriers as a help as well.

Looking forward, Belter expects “more of the same” at a minimum for the rest of the year, noting that October will provide a “big tell.” He said unknowns surrounding future consumer spending is a concern but he believes continued inventory replenishment will keep the current market dynamics in place.

September was the highest volume month of the year for Ryder, approximately 10% higher than March, a month when consumers rushed to procure provisions as the virus spread. Seasonally, October is normally a larger volume month, which suggests a sequential step higher in freight demand as peak season takes hold. Further, he sees demand strength continuing as the industrial economy comes back online, creating some “additional demands for additional capacity above and beyond just what’s going to happen in the retail holiday season.”

Click for more FreightWaves articles by Todd Maiden.

Tags

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.

Leave a Reply

Your email address will not be published. Required fields are marked *

Close