Trucking and Container Dray Update
March 16, 2018
“It’s all about the driver now”
In light of the trucking challenges across the United States related to ELD and its impact on the market, we wanted to provide some additional insight, and draw attention to what we are seeing and experiencing. And right now, it’s all about the driver.
Drivers now are being selective, wouldn’t you? We are seeing drivers be much more selective of which work orders they accept now that their time is limited by the new ELD regulations. Will they have to stay overnight? Is it more than four hours from the terminal? Is it delivering to a location that is difficult to get into? Will I have to wait 3 hours for the facility to unload the container? Will there be chassis available at the terminal? Do I have to pick up at one terminal and empty return at another? These are just some of the questions we have heard drivers ask now they contend with the new ELD regulations.
How to be a Shipper of Choice? Look within your organization and your warehouse/loading facility and see whether it is a driver-friendly facility. Is it easy to back into? What is the typical waiting time for drivers once they get to your facility? Do you allow the driver to use the bathroom or break facility? Do you provide wi-fi access to the driver? Do you allow the driver to take his rest break in your facility? Is the driver treated with respect? Look at all the small things to ensure that your facility is driver-friendly and be consistent with your load/unload times. If it’s a difficult location for drivers, most likely, they will reject the load and “rate” your facility accordingly. And you don’t want that.
Is your facility more than four hours from the terminal? The threshold for drivers seems to be 200 miles or four hours from the terminal. Anything below, given normal loading/unloading times, the driver can make it back within the time requirements of the ELD regulation. Anything beyond that requires a different strategy and conversation. It may require an overnight stay. It may necessitate the need for drop-and-pick. And in many cases, your trucker may use an intermediate depot or off dock CY to stage the delivery and manage it in two chunks, possibly by two drivers, on two different days. The costs for these different strategies will be different and passed on to the shipper. Understand that this is what is required – it is not a choice – to effectively service the dray to your facility.
I pay $75/hour for waiting time. Shouldn’t that cover it? This is a common question we get. And the answer is “no.” Everything now needs to be looked at as an element of time. And when time is restricted, even if you are paying a “waiting time fee,” it eats into the hours allowed for that driver. Drivers don’t want to sit around and wait - even for $75 – they want to be constantly on the move to maximize their own revenue and keep freight moving.
Make the delivery/loading process part of your strategic supply chain conversation with your forwarder. In many cases, the trucking component of an international move is treated as a transaction, or as a necessary add-on to the international move. This needs to change so that the delivery/loading component, and all the processes to manage it, becomes part of your strategic conversation. Make sure that that conversation is a triad conversation between you (include warehouse staff), your forwarder, and your dray provider. All of the questions we mention above need to be part of the conversation. This is the single most critical issue for us in 2018 and needs to be handled differently from what most have done in the past.
How much will container dray rates increase again in 2018? We have seen increases already of 15-25% from the end of last year through today. What we are expecting from conversations with dray carriers is that rates may increase another 15% before they stabilize at the end of 2018, early 2019.
Laufer’s Position Regarding ELD: We at Laufer perform a significant number of import and export ocean drays for our customers – well over 25,000 per year (out of 70,000+ containers that are moving through our network annually). We haven’t seen a disruption in services like what we are experiencing today since Hanjin’s bankruptcy in 2016, and there is no immediate relief that we can foresee. In order to better understand what is truly happening with trucking capacity and the challenges posed by the new ELD regulation (and a host of other issues impacting trucking today), we at Laufer created a small Trucking Council of local, regional and national carriers as an advisory and feedback group. Our goal is to inform our teams internally as well as our customer community what the trade is experiencing, how this is impacting you, and what solutions there may be moving forward.
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