Shortages of trucks and truck drivers stall product deliveries

By Paul Davidson, USA TODAY

Shortages of trucks and drivers are delaying some deliveries of products and raw materials across the USA and raising freight costs.

The crunch is defying a tepid recovery and near-10% jobless rate that should supply a vast pool of unemployed construction and manufacturing workers. Shortages are likely to worsen when the economy heats up and new rules kick in later this year that will make it tougher to hire drivers with poor safety records and could limit the number of hours drivers can work, experts say.

"What's going to happen in six, 12, 18 months?" says Jon Langenfeld of research firm R.W. Baird.

Since June, PPG Industries (PPG), a top glass and coatings maker, occasionally hasn't been able to find trucks to transport glass from its factories to window fabricators, delaying deliveries a day or two. "If nothing arrives ... it can shut a plant down," says PPG supply chain manager Jeffrey Smith.

After plunging in the recession, contract rates are up about 4% in 2010, and spot rates are up as much as 40%, Langenfeld says. About 70% of shippers surveyed reported tight capacity for full truckload service this quarter, up from 27% the first quarter, according to research firm Wolfe Trahan.

Operators slashed their fleets and workforces in the downturn as demand fell 24%, says Bob Costello, chief economist for the American Trucking Associations. Thousands of small firms closed, while survivors trimmed fleets an average 14%.

Demand is up 10% this year, Costello says, as manufacturing and retail sales have rebounded moderately. But many firms are struggling to beef up fleets and staff. New truck prices have risen $25,000 since 2002 because of stricter emission standards, and many smaller carriers can't get loans because of tight credit requirements, Langenfeld says.

Meanwhile, thousands of older drivers retired when they were laid off or saw their workloads cut. Yet it's tough to attract younger workers to a lifestyle that typically means being away from home for weeks at a time for salaries that start at about $38,000, Costello says. Many of the unemployed prefer to collect jobless benefits, he says.

Combined Transport of Central Point, Ore., has been trying to add 50 drivers to its staff of 370 for months. "We have trucks and trailers sitting around doing nothing," says President Mike Card. He says he turns away two or three jobs a day.

Con-way Truckload (CNW) of Joplin, Mo., which sought 70 drivers this summer, vied with rivals offering $10,000 bonuses, says President Herb Schmidt. Schmidt and Card recently began screening drivers based on the anticipated safety standards. The criteria could shrink the driver pool 5% to 12%, says Rosalyn Wilson of consulting firm Delcan. She projects a 400,000-driver shortage by 2012.

http://www.usatoday.com/money/economy/2 ... 9_ST_N.htm