By Karen E. Thuermer, AJOTIf the State of the Logistics Report recently released by the Council of Supply Chain Management Professionals (CSCMP) is any indication of what the near future holds for transportation modes, shippers can expect rough roads going forward. Trucking, the largest transportation, sector was particularly pinpointed as hitting major pot holes. According to the study, trucking is struggling to cover costs, especially skyrocketing fuel costs. These issues are of particular concern to the less than truckload (LTL) segment where truck drivers must make multi-stops and often drive in high traffic areas. As indicated in the report, the cost for trucking was up 9.3 percent in 2010, with the intercity truck segment up 9.5 percent and the local delivery segment up 8.8 percent. “Much of the increase in revenue is from fuel surcharges, even though most truckers have not been able to fully recover their actual added fuel costs,” the report states. Losses Felt Volumes grew slowly and fitfully, with truck tonnage rising 5.7 percent in 2010, according to CSCMP. “But this was not even close to reversing the losses of the last several years,” states Rosalyn Wilson, State of Logistics Report® author. “In general, there was still more available capacity than needed to meet demand for most of the year. So trucking companies did not gain ground in the rate department.” Wilson points out that more than 16 percent of truck capacity has been permanently removed in the trucking industry since 2006. In addition, traffic levels are expected to rebound faster than the sector will be able to respond and expand capacity. Besides the fact trucking firms have been holding onto their tired fleets a little longer or scrapping them without replacing them immediately (new truck costs have skyrocketed 25 percent in the past five years), the economic downturn has impacting the trucking industry widely. More than 3,000 trucking firms have declared bankruptcy over the last three years, according to Donald Broughton of Avondale Partners, translating to a loss of 13 percent of industry capacity. “This includes carriers with at least five trucks,” Wilson says. “So the number is actually much higher.” Finding ample truck drivers continues to be a major problem plaguing the industry. While not understating the issue, Wilson points out those driver shortages have been an issue since the days of the horse and cart, so this is nothing new. But most alarming, over the last four years, the sector has seen a loss of 13.4 percent of its workforce. Driver Concerns The CSCMP expects the lack of drivers will become an even more limiting factor in truck capacity, slowing the return of trucks to the marketplace. “Driver pay will rise as companies work to attract and retain drivers,” Wilson remarks. “Some, like Conway, have even opened their own driving school and training program to ensure they have top quality drivers.” Meanwhile, rapid turnover of top quality drivers is resulting in increasing trucking company expenses as truckers chase better pay, benefits and working conditions. Plaguing the truck driver issue is the fact one in six truck drivers is age 55 years or older, and less than one quarter of current drivers is under 35. “And that segment has been declining,” Wilson adds. While Wilson was more optimistic about the state of transportation and logistics, in general, earlier this year, she surmises that recently market conditions and transportation services may have hit a wall. “It’s been close to two years since the recession was pronounced over, and for many Americans, things have not improved,” she says. Capacity issues are especially becoming more widespread in the trucking sector as well as air freight sector. In fact ACT Research recently projected a shortfall of 75,000 trucks by first quarters 2012, climbing to 180,000 units by the end of 2012. This is despite orders for new trucks. According to Wilson, these do n