David Savastano, Editor10.15.15
With the cost of gasoline coming down, one would think that transportation would not be an issue for manufacturers. However, transportation is becoming more of a concern for a variety of reasons, and ink companies are being impacted.
A truck driver shortage is becoming a serious issue. In 2014, the American Trucking Associations (ATA) estimated that the U.S. is short 30,000 truck drivers. Part of that is due to the turnover rates of more than 90%.
In October 2015, the ATA reported the findings of a study that showed that the shortage of truck drivers is now nearly 48,000, and is likely to get worse due to industry expansion and a retiring workforce. As a worst-case scenario, the ATA said the shortage could reach to 175,000 drivers by 2024.
“The ability to find enough qualified drivers is one of our industry’s biggest challenges,” Bill Graves, ATA president and CEO, said.
“Fleets consistently report receiving applications for open positions, but that many of those candidates do not meet the criteria to be hired,” Bob Costello, ATA’s chief economist, added. “According to our research, 88% of carriers said most applicants are not qualified.”
Ink manufacturers are seeing the results of these shortages.
“In both Europe and North America, a driver shortage has developed that is impacting both the cost and service dimensions of road transport,” said Ed Pruitt, chief procurement officer, Sun Chemical. “This shortage is driven by several factors, including regulations governing the hours that drivers can operate, the graying of the current driver workforce, and a lack of interest by the younger workforce to take up driving as a career. As a result of the shortage in skilled drivers, delivery capacity has become much tighter, resulting in markedly higher freight rates and a general reduction in service levels.”
This has led to changes in service.
“Over the past couple of years, freight companies have gone through a lot of changes in the services they are able to provide to us,” said John Hrdlick, COO for INX International Ink Co. “Our business has always been extremely service-oriented, requiring a lot of flexibility from our freight carriers. That flexibility involves late pickups and guaranteed next morning or next day delivery, as a significant portion of our orders have short lead times. Many customers have specific delivery windows as well which increases our challenges. Most of the additional freight costs INX incurs are absorbed by us to make sure our product arrives in a timely manner. Operationally we are working hard to adapt to these realities and manage our costs better.”
Adding to the driver shortage is the move by customers toward just in time shipments and reducing inventory levels.
“Even with the dropping price of fuel, transportation costs have remained high and shipping to some areas of the country have increased,” said Marc Castillo, technical director for Braden Sutphin Ink. “To compound the issue, customers are continually moving to just in time shipments. We are seeing size of the shipments shrinking and number of shipments going up.”
A truck driver shortage is becoming a serious issue. In 2014, the American Trucking Associations (ATA) estimated that the U.S. is short 30,000 truck drivers. Part of that is due to the turnover rates of more than 90%.
In October 2015, the ATA reported the findings of a study that showed that the shortage of truck drivers is now nearly 48,000, and is likely to get worse due to industry expansion and a retiring workforce. As a worst-case scenario, the ATA said the shortage could reach to 175,000 drivers by 2024.
“The ability to find enough qualified drivers is one of our industry’s biggest challenges,” Bill Graves, ATA president and CEO, said.
“Fleets consistently report receiving applications for open positions, but that many of those candidates do not meet the criteria to be hired,” Bob Costello, ATA’s chief economist, added. “According to our research, 88% of carriers said most applicants are not qualified.”
Ink manufacturers are seeing the results of these shortages.
“In both Europe and North America, a driver shortage has developed that is impacting both the cost and service dimensions of road transport,” said Ed Pruitt, chief procurement officer, Sun Chemical. “This shortage is driven by several factors, including regulations governing the hours that drivers can operate, the graying of the current driver workforce, and a lack of interest by the younger workforce to take up driving as a career. As a result of the shortage in skilled drivers, delivery capacity has become much tighter, resulting in markedly higher freight rates and a general reduction in service levels.”
This has led to changes in service.
“Over the past couple of years, freight companies have gone through a lot of changes in the services they are able to provide to us,” said John Hrdlick, COO for INX International Ink Co. “Our business has always been extremely service-oriented, requiring a lot of flexibility from our freight carriers. That flexibility involves late pickups and guaranteed next morning or next day delivery, as a significant portion of our orders have short lead times. Many customers have specific delivery windows as well which increases our challenges. Most of the additional freight costs INX incurs are absorbed by us to make sure our product arrives in a timely manner. Operationally we are working hard to adapt to these realities and manage our costs better.”
Adding to the driver shortage is the move by customers toward just in time shipments and reducing inventory levels.
“Even with the dropping price of fuel, transportation costs have remained high and shipping to some areas of the country have increased,” said Marc Castillo, technical director for Braden Sutphin Ink. “To compound the issue, customers are continually moving to just in time shipments. We are seeing size of the shipments shrinking and number of shipments going up.”