As we all know, the transportation sector is an integral part of the U.S. economy. It employs millions of people and comprises 8.9 percent of the nation’s economic activity as measured by gross domestic product (GDP). Despite advances in automation technology, work related to transportation, logistics and warehousing remains highly labor intensive. According to the Wall Street Journal, trucking companies hired 6,700 workers in March 2018, giving that sector the strongest sector growth since 2012. In that same time-frame, parcel carriers added 5,800 jobs, and the shipping sector reported strong employment figures, as well. Not surprisingly, to meet demand warehouse and storage payrolls added 2,500 hires in early 2018.
It’s clear that companies are aggressively rushing goods to market and willing to pay the price to get products delivered. According to the Cass Freight Index, U.S. rail and road shipping jumped 11.4%. The Wall Street Journal reports that trucking companies are ordering vehicles in record numbers and yet are still not meeting demand. Orders for new rigs come at a time when shipping capacity and freight demand appear to be widening. Fleets are being called upon to deliver goods, but can’t meet demand. The WSJ reported in their daily newsletter, Logistics Report, that “Fleets ordered 133,900 heavy-duty trucks in the first quarter of 2018.” That figure is doubled as compared to the same time period in 2017. Yet the current discrepancy in capacity remains. DAT Solutions, LLC reports that shipments on the spot market “load board” rose 27% from earlier this year while the number of trucks available increased only 14%. In a Truckstop.com survey, 83% of respondents said they expected demand to increase over the next 6 months; that is a strong measure of confidence in the need for trucking capacity.
These numbers indicate that the transportation and warehouse sector is a rapid growth market. Job growth, capacity expansion, and demand are on the rise. Yet the good news always comes with a challenge. According to a survey of manufacturing professionals conducted by the American Society for Quality (ASQ), 41% of respondents say that finding skilled workers is their number one challenge for 2018. Every industry faces hiring obstacles. Large trucking fleets are facing the fear, that once the trucks are manufactured, the driver shortage will force their trucks to remain idle. There is a paradox occurring as the industry adjusts to the market and fragments. Smaller fleets are not having trouble seating their rigs, but larger fleets are.
What do all these numbers indicate? The demand for responsive delivery systems is real. The industry is a growth industry because demand continues to expand. During a recent FreightWaves webinar series, Jeff Tucker, CEO of the Tucker Company Worldwide, said, “We were talking a few years ago how awesome two day delivery was; now we prefer same day. Will that sort of demand for instant gratification continue? I think yes.”