The Freight Lab’s Driver Initiative at MIT is taking a data-driven approach to understanding the experience of North American truck drivers and finding ways to increase driver utilization—and therefore profitability—as well as the driver’s experience. Dr. David Correll, who leads the Driver Initiative, shared his findings and insights in this Freightvine episode.
Dr. Chris Caplice recently sat down with his fellow MIT colleague, Dr. David Correll, to discuss David’s work with Freight Lab’s Driver Initiative. The pair begin by Chris asking “why now?” in regards to why this research on driver experience is front of mind for many in the transportation industry. David attributed the pique in interest to: (1) the perceived driver shortage, (2) ELD mandates which have generated a significant amount of data, and (3) the desire to be data-driven.
Chris then points out that the industry’s focus on driver retention and caring about the driver’s experience tends to be cyclical and tied to capacity shortages. However, this time it seems to be more overarching given the soft market that is currently being experienced by most of the industry. Chris and David agreed that drivers tend to be overlooked by many in the overall supply chain and transportation cycle. Shippers work with carriers and they tend to think more broadly than at the driver-level; and drivers may not always have all of the information they need to be the most efficient and profitable.
While David’s research is still in the early stages, there are several preliminary findings that are eye-opening. Given the driver shortage that literally the entire industry has been focused on and discussing for years, the data suggests that rather than a driver shortage, the true issue may be utilization. The U.S. census cites that there are 1.8 million Class A drivers in the United States. The ATA estimates that there is a shortage of approximately 60,800 drivers, which is only a shortfall of approximately 3.4%. Furthermore, the data analyzed for the Driver Initiative indicates that drivers are averaging approximately 6.5 hours of driving per day out of their allotted 11 hours. So, in theory, if the same 3.4% shortfall were added to the hours spent driving (approximately 12 minutes), the driver shortage could be solved. This quick math certainly makes a compelling case that improved utilization could close that gap.
David then offers several hypotheses for why driver utilization is so low, including (1) issues such as mega-delays at facilities, (2) specific day of week pickup and delivery, and (3) unintentional dwell time. All of these cause ripples throughout the supply chain as drivers are delayed from one load, which causes them to be late to the next load, and potentially miss the third one completely. From a driver’s perspective, utilization ties back to both profitability and their work experience.
This episode recap was written by Cindy Bosecker, Director, FMIC.
Market Update & Forecast: 5 December 2019
Dry Van
Active rates were flat, while spot market rates showed a slight decrease of 1%; replacement rates continue to be negative (-2.7%)
Temp-Control
Both active and spot rates were flat with replacement rates remaining negative (-2%)
Intermodal
Active and spot rates were also flat with replacement rates being only slightly negative (-0.25%)
Relatively speaking, the North American truckload market was pretty flat across the board, which is atypical for this time of the year. The usual Q4 spot market spike has not materialized.
A few key items to note are that shippers should be utilizing benchmarks to understand current performance to market and driving those discussions with carriers to negotiate better market position, while still maintaining a fair and balanced approach with carriers given the cyclical nature of the market. Also, while the typical spot market spike has not materialized, the dramatic increase in e-commerce shipments, as well as the weather patterns and winter storms, indicate that transits and on-time performance may be more impacted as we get closer to Christmas, but they may not be as tied to rates.
