Transportation, Freight Crisis Looms in Midst of Overcapacity

According to a new trucking/freight industry report, the U.S. regulatory environment for intermodal freight companies might be the largest factor in increased transportation costs.

“The State of Freight” report, written by FTR Snr. Consultant Noel Perry, looks at the upcoming capacity shifts for the trucking industry and the ramifications of proposed and ongoing government regulations.

Just a quick glance at the Rules and Regulations at the Federal Motor Carrier Safety Administration site is likely enough to make any trucking company’s executive heads spin. But in fact, it’s this sort of massive regulatory environment that is forcing trucking executives to think hard about driver hiring decisions and capacity moves in the coming 18-24 months.

Trucking-MidwestIn a quote at FTR’s site, Perry says “If federal agencies do what they say they’re going to do, by the third quarter of 2015, we will need to hire another 160,000 drivers.” If this happens, Perry suggests, it may test the patience for intermodal trucking companies and freight firms.

A capacity crisis is one of the scenarios forecast in Perry’s report. He noted that regulatory changes may bring about additional driver hiring by trucking firms. The report forecasts some extra 160,000 drivers may be needed in two years’ time. And if demand doesn’t stay strong due to regulatory issues, government shutdowns or another recession, shortages may become the net result.

The trucking industry is already operating at tight margins of hiring, with leaner staffs and appropriate levels of trucks over the past few years. This has led to a manageable level of costs. But if there’s a great influx of demand, prices will have to go up correspondingly.

Calhoun Truck Lines continues to watch the overall regulatory area for changes, and how it affects our freight business in the Midwest. As we move closer to 2014, we hopefully anticipate more growth in our business. If your business is looking to move cargo, contact one of our five Midwest locations for a customized shipping solution.

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