The trucking industry is recovering from the recession, but still faces significant challenges to growth, from driver shortages to increased regulations.
That’s the impression Darren Hawkins, senior vice president of sales and marketing for YRC Freight, gave to the Traffic Club of Memphis today.
Hawkins got started in the transportation industry while attending college at Memphis State University in the 1980s.
While in school, he went to the job office and got hired at a local trucking company making $6.25 an hour.
“I really enjoyed that work and found out I had a knack for it,” he said.
Hawkins stayed on that career path, eventually getting a degree in transportation and logistics. After working at several companies, he came to YRC Freight.
YRC Freight is a subsidiary of YRC Worldwide Inc. (Nasdaq: YRCW) , a company which has faced significant challenges itself. YRC, which was formed in 2003 when Yellow Transportation andRoadway Express merged, faced bankruptcy a few years ago.
“The last four years have been extremely difficult for YRC Freight,” Hawkins said.
In 2012, truckload activity was up 1 percent, truckload intermodal loads were up 20.1 percent and less-than-truckload tonnage was up 4.3 percent from 2011, according to the American Trucking Associations. While numbers were up full-year, several trucking categories saw a slight dip in fourth quarter 2012.
It’s all part of the uneven recovery from the recession for the industry. The predictions for 2013 show an improvement, but at a slower rate than 2012.
An obvious challenge for the industry is the continuing driver shortage.
“Is it real?” Hawkins asked the audience. “Absolutely it is real.”
The industry needs 96,178 new drivers per year for the next 10 years to replace lost drivers and those who are getting out of the business. Also, the average truck driver is 10 years older than the average American, with not as many young people getting into the business.
Hawkins introduced the Traffic Club of Memphis to local YRC Freight driver Arthur Cage. Cage, who started driving in 1973, was recently put into YRC Freight’s Driver Hall of Fame after driving 5.6 million miles without a preventable accident.
Another industry issue is highway congestion. Memphis ranks No. 32 in this category with 2 million hours of driving lost annually due to congestion.
Nationwide, the industry suffered $25 billion in lost productivity from trucks being in congested areas.
The trucking industry is also focusing on trying to get funding restored for federal infrastructure improvements.
Federal funding for highway improvement has decreased in recent years because it was tied to fuel taxes and there are more fuel-efficient cars on the road. The government has put in a two-year funding stopgap, MAP-21, but the trucking industry is looking for a longer-term solution. Washington has a carbon tax on car emissions which could fit the bill, but that money currently goes to home weatherization.
“It’s something the industry is spending a lot of time on,” Hawkins said.
The industry is also looking to partner with the government more to adjust the safety requirements enacted a few years ago. Called CSA for Compliance, Safety and Accountability, the regulations were developed by the U.S. Department of Transportationbut didn’t have as much input from the industry as some would like.
The regulations make the industry safer, but could use some adjustments, Hawkins said.
Hours of service is another hurdle the industry faces. The government is considering an option to limit drivers to 10 hours driving at a time. Currently, they can drive 11 hours. This small change could add to the number of drivers companies would have to employ. Hawkins said shortening driver hours might not impact safety as much as the government might think.
“The data shows we have to do more (to address safety issues) in the first two hours,” he said.