Understanding Truckload Capacity

Whether you’re trying to cover a load on the spot market or attempting to predict transportation costs for the next fiscal year, truckload capacity has a huge impact on these processes. How many trucks are available on the road at any given time can be difficult to predict, and there are many components that affect truckload capacity. To help you better prepare, let’s review the major factors:

Seasonal Capacity

In the shipping world, there are two major seasons to mark on your calendar. The first is produce season, which starts around April and ends in July. This is the time when produce harvesting hits its peak and those distributing it require a large amount of trucks to haul their loads.  Even if you aren’t a produce shipper, you could be impacted by the high demand for equipment at this time, especially if you’re on the East Coast.

Peak shipping season is the other time period to be aware of. It’s generally from August to October, adjacent to produce season. This is when sales for customers in the manufacturing and retail industries skyrocket due to everyone going back to school and preparing for the holidays. Shipping volumes shoot up dramatically across the U.S., and this always tightens truckload capacity.

While truckers are happy to be hauling a large number of loads, shippers feel the impact of tightened capacity, and shipping costs may go up. The basic economic principle of supply and demand can be applied here. There is a high demand for trucks and drivers, but a lower supply. This is good for truckers, and bad for shippers.

Regional Capacity

You may have found that some areas in the country are considered danger zones for truckers. Some spots in the country are just not attractive to drivers and are colloquially known as “black holes”. Essentially, this means that drivers may be able to find loads in the area, but have a hard time finding outbound loads to get home (known as backhauls). With that being said, low outbound shipment areas generally have tighter capacity.

Typically, areas with high consumption and high population, but with low numbers of manufacturing and distribution centers in the vicinity, are undesirable spots for truckers, so shipping to these areas will come at a cost. Examples of these places would be Denver, Orlando, Dallas, Seattle, and Phoenix.

Equipment Availability

Sometimes it’s not the driver that’s hard to come by, but the equipment itself. Perhaps you need a reefer truck for your produce or a flatbed for your machinery, but there simply aren’t any available on that particular lane. This can happen due to any of the previously discussed reasons, but a major one in the pipeline is the equipment crunch set to hit later this year.

The holiday rush will begin at the end of August or Early September, which marks peak season for intermodal shipping. Since shipping over the rail requires dray carriers and trailers, truck capacity will tighten. Since the housing market is improving, new construction is on the uptick, and the economy is relatively healthy, peak season should be extremely busy. With truckload capacity issues, this could shape up to be a perfect storm for shippers trying to get their goods to market.

Driver Shortage

If you’re in the shipping industry, you’re likely already aware that the U.S. is experiencing one of the worst periods of truck driver shortage in history.  The trucking profession has simply lost its glam as the average driver age hovers around 52 years old, and younger drivers are hard to come by. Truckers are retiring left and right due to low pay rates and the hardships of being away from family for days or weeks at a time, in addition to several new federal restrictions.

Larger carriers are experiencing driver turnover rates in the 90 percent range, which means they need to replace nearly their entire fleet each year. Sure, fleet operators have tried to push incentive programs and pay raises, but the shortage is still prevalent. According to the American Trucking Association (ATA), the trucking industry is estimated to be short by 64,0000 drivers. The stronger the economy grows, the more obvious the shortage becomes.

Until the fleet operators and industry leaders are able to figure out a long-term solution to the driver shortage issue, tight truckload capacity will continue to affect you and your business. Shipping rates can go up at a moment’s notice, especially on the spot market. This is why working with a high-volume third-party logistics company (3PL), like Trinity Logistics, is such a game changer for your business. We can help you navigate the unpredictable world of truckload capacity, as we have a reliable network of trusted carrier relationships across the nation. Chances are if there’s an issue in the transportation industry, we know about it and can help you make educated decisions for the best outcome for your business.