Addressing the needs of intermodal trucking

Editor’s Note: Ken Kellaway, president, CEO and co-founder of RoadOne, has been in the trucking business for close to three decades. He is known as one of the drayage industry’s strategic thinkers. The shortage of drivers and ports’ congestion issues are the challenges Kellaway addresses in his assessment of the industry. By Ken Kellaway, special to the AJOT

The state of the drayage industry is illustrated each day on Facebook’s Port Driver page where drayage truckers report port congestion.  At the top of their Facebook page, the sign posted states - Without Trucks the Port Stops – a reminder to Port Driver’s followers and maybe all of us.  Drayage port drivers are discouraged by their low rates and the lack of productivity at ports and terminals. One Facebook post said, once the bigger ships come, we can only imagine how bad this port’s congestion will be, but what we do know is that we need to restructure the way we get paid. From a system perspective, it can no longer be payment as a per move rate because we’re not compensated for delays. The inefficiency and lack of productivity at ports and terminals and within the chassis system is desperately impacting driver capacity and making driver recruitment and retention extremely difficult.  It will only grow more critical as time passes.  Further delays in productivity improvements and rate relief will only accelerate the problem.  It’s no wonder many drivers are leaving on a daily basis to target higher earning trucking sectors and better career opportunities resulting in a decline in services. The shortage of intermodal drivers jeopardizes the smooth flow of inbound shipments at marine terminals and inland rail hubs.  It is a major bump in the road that may significantly impact reliable and timely delivery of shipments, especially during peak season.   Considering rail intermodal tonnage is expected to grow 5.5% annually through 2019, and 5.1% a year through 2025, according to Forecast, ATA (American Trucking Assoc.)-IHS Global Insight reporting, it’s vital that this critical driver shortage be addressed to meet escalating demand.  If there aren’t enough drayage truckers to move containers from rail hubs and terminals, there’s the potential for significant supply chain disruption.  This could create a considerable burden for global shippers and the industry.  Currently, port and rail-operating people, who are dependent on intermodal drayage drivers to move freight, are generating double the wage of a truck driver.   Exacerbating the difficulty to attract drivers are ongoing inefficiencies that impact the smooth flow of cargo. These include delays at ports, terminals and customer locations, as well as the current chassis business model, which desperately needs standardization.  Other supply chain interruptions result from delays with live lifts at ports and ramps and slow turn-times at port gates.  This laundry list of inefficiency adds up to negatively impact driver capacity. The annual U.S. truck driver turnover rate at large truckload carriers has been between 80-90% the last 3 years, according to the ATA.   The long wave of Government regulations has also negatively affected driver capacity.  The most recent, the new HOS (Hours of Service) rule limits the number of hours a driver can be on the road. Since HOS, there’s been a reduction in capacity of 3-5%; driver recruitment applications have dropped by almost 20-25%; and productivity has declined by more than 10%. This type of legislation is counter intuitive to what needs to be done to support and build intermodal driver capacity. Further impacting drayage driver capacity is the trend for large public logistics companies to target drayage companies for acquisition. They’re doing this in an effort to build internal capacity for their end-to-end solutions, which will further reduce open market capacity.   With over 25 years of experience delivering intermodal trucking and logistics services, RoadOne IntermodaLogistics, understands the importance of tackling the driver capacity issue.  Advocating and implementing sustainable intermodal solutions to address today’s supply chain needs and future growth is critical to the overall health of global shipping. RoadOne recently launched their Green Fleet Driver Program to assist RoadOne owner–operator drivers with the purchase of newer, more environmentally friendly trucks. The program features an attractive lease to buy program with competitive pricing to support the driver’s business success.   Many motor carriers are instituting pay increases and incentive programs, such as bonuses and fuel economy packages to hold onto and attract new drivers.  These necessary cost increases are essential to attracting new intermodal drivers to the industry and keeping today’s supply chains in sync and on-time.  These supply chain costs have to be passed onto shipper customers to allow for a sustainable, long-term solution to driver capacity.   In addition, port and terminal productivity improvements must be part of the equation to offer an environment for drayage truckers to be successful. These advances could take the form of a standardized chassis system that is predictable, along with fluid and flexible solutions to increase the velocity in the system such as: more night gates; container drops at destination; faster port/ramp turn-times; and match-back planning for imports and exports. Furthermore, better industry-wide collaboration to increase industry awareness of drayage issues, and improve visibility within industry segments and government would foster more constructive planning, forecasting and decision-making.  We need to be able to tell port drivers that productivity improvements and rate relief is on the way to keep them right where they are, delivering timely freight moves that keep supply chains running smoothly.