***hello writer, please respond to this classmates about their discussion post*** i included the powerpoints the classmate read from & wrote their discussion just in case you need them for context***
Hello Professor and classmates,
What are the major issues facing motor carriers in the 21st century? How should these issues be addressed?
Some major issues are:
-Safety
-Technology
-Driver Turnover
-Green and Sustainable Operations
-Financial Stability
(Novack et al., 2023, 172 – 178)
Some methods to address these issues:
The FMCSA has attempted to address these issues individually for decades (Novack et al., 2023, 173). Whether it be drug and alcohol tests, pre-employment, random during employment and post accident, physical exams to ensure the drivers health is up to par for the tasks at hand, and adding technological instruments to monitor how many hours the driver has logged in a day, and 8 day intervals. The extra levels of checks serve as a preliminary source to understand and attempt to mitigate costly lawsuits and enhance the safety of the general public out on the roadways.
Driver turnover rates are extremely high. Yearly, 50 percent of drivers will quit (Novack et al., 2023, 176). There are a reported 3.5 million drivers in the U.S. (Cheeseman & Hait, 2019). When you realize how many drivers there are in total and the potential of half of them jumping from company to company, you can then imagine the industry as a whole and how volatile it can be. There are two primary reasons for driver turnover rates, the first is simply not enough drivers and the second reason would be driver pay (Novack et al., 2023, 177). Drivers are tasked to do more when there are not enough drivers to handle the cargo and demands. Regarding pay, for major carriers that have a large number of contracts, this is less of an issue, you can use Walmart and Amazon as examples. Their drivers have consistent pay and are less reliant on the market and its fluctuation. For small carriers who rely on the spot load market, it becomes more difficult to maintain a consistent pay schedule. These drivers rates change on a sometime day to day ratio. Which means less stability. One way the industry can help relieve some stress is locking in a rate for 3 to 6 months. This would give drivers a steady outlook on what’s to come and they would be able to brace themselves for any future changes in advance.
As a person who owned 3 Compressed Natural Gas (CNG) trucks, I can say that they are a suitable alternative to a diesel truck. While running cleaner and cheaper, they come with some major flaws. Finding a mechanic that can work on them while out on the road is near impossible. Just from my own point of view. While running a “greener” fleet entails much more than what fuel is consumed, I focus on this aspect as it is a real problem when you attempt to change from diesel to a cleaner solution. Amazon has a sizable natural gas fleet with many locations and many mechanics. So they would more than likely see things differently than myself and other small company owners. More fueling stations, and service centers would be required to enhance the change and run a cleaner industry.
As mentioned in my post, market fluctuation and transparency are if not the biggest issue, then a close second. Operating ratios are extremely too high (Novack et al., 2023, 178). In conjunction with the market volatility this is a recipe for disaster. When I had my company, fuel and driver pay took roughly 80 percent. Maintenance, operating expenses such as insurance, EOBRs, break downs etc… took another 10 to 15 percent. Leaving the rest for expansion and Administrative costs. Knowing these factors, fuel and market prices would have to be at the top of the lists of issues to address. Running a cleaner fuel is much cheaper. Locking in rates for a period of time would be a way to give companies a chance to plan for the future and another way of helping companies pay their drivers consistently.
In this discussion I attempted to mix some information from our readings with my own personal experiences. Some seemed to be right on point and some you just have to live to experience. Motor carriers have for decades been faced with many obstacles, unstable markets and potential bankruptcies month to month. It is a tough industry. Many of the potential methods to fix the issues are reliant on other markets which have their own set of problems, and round, and round we go.
-Angel
References
10 Best Paying Trucking Companies. (2023, August 1). Inbound Logistics. Retrieved June 13, 2024, from https://www.inboundlogistics.com/articles/10-best-paying-trucking-companies/
Cheeseman, J., & Hait, A. W. (2019, June 6). America Keeps on Truckin’. U.S. Census Bureau. Retrieved June 13, 2024, from https://www.census.gov/library/stories/2019/06/america-keeps-on-trucking.html
Novack, R. A., Gibson, B. J., & Suzuki, Y. (2023). Transportation: A Global Supply Chain Perspective. Cengage Learning.
