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The Roemer Report: July 2014

Unemployment Down

The unemployment level of the United States recently hit its lowest level since 2008. Currently the unemployment rate is 6.3%. This is good news for everyone in the U.S. especially truck drivers and transportation companies. The U.S. Labor Department showed that 288,000 jobs were added to the U.S. economy in April. Of those jobs, 6,800 were in for-hire trucking and over 11,000 of those jobs were in the more broad transportation industry.

With the increase in jobs comes an increase in national spending. And with an increase in spending, more raw materials are needed, therefore, giving more business to the transportation industry. Factories shipping levels are the highest they have been since 1992. Durable and capital goods shipment levels have increased on average one percent per month for the last few months, more good news for the transportation industry.

The auto sales industry is also at a high point in its recent history, with an estimated 1.4 million cars being sold in April, more than 8% higher than the numbers from April of 2013. Again, good news for trucking companies, more cars being built equals a higher need for raw materials. The auto industry is a key driver in the steel industry which is one of the largest markets for flatbed transportation.

The key indicators are all pointing North. Unemployment is down and shipping needs are up. Trucks are in high demand and capacity per load is near record lows. Keep in mind that the transportation industry has not even moved into the peak shipping season – industry analysts and carriers are universally predicting very tight capacity and truck availability at premiums. This is all very good news for the transportation industry.
By: Dan Taylor, Sr. Vice President and General Manager at Conexus

Driver Shortage No Better

In Van Buren, Arkansas, huge "now hiring truck drivers" signs sit in front of trucking companies. Some of those companies are offering a bonus to their truck drivers who find new drivers and a signing bonus for those that do come on board.

Gary Moore, safety director for JR’s Trucking Company, said it's just not enough. Moore said the shortage of truck drivers has been an issue for years and is only getting worse.

"There is nothing really enticing the young people to get into the industry," said Moore.

Moore said he believes one reason is parents discourage children from wanting to drive a truck for a living. He said another reason could be the money drivers have to shell out for speeding or turning down a wrong street. 

"A lot of the fines have gotten astronomical that the driver is responsible for, just for making a simple mistake,” Moore said.

Michael Grizzle has been driving 18 wheelers nearly 14 years. He said truck drivers complain of lousy pay.

"Back in the '70s you could make a good living driving a truck and it seems like now you're just barely getting by. And if anything was to happen and you was to lose a few loads, it may put you under," Grizzle said.
Grizzle said a big concern of his is family.

"I'm gone six days a week, 52 weeks out of the year with the exception of vacation and holidays and that kind of stuff. And you watch your family grow up sitting in one of the seats of these trucks," Grizzle said.
Many trucking companies said they have not and will not change any of their hiring qualifications to get new drivers.      
The American Trucking Association estimates an average of 96,000 drivers will need to be hired nationally every year to keep up with the current demand

Trucking industry, military test driverless vehicles

An increasingly mobile international economy has led to the disruption of some transport markets. Uber has left taxi drivers seething, with some labor unions going so far as to shut down metropolitan area access in protest. However that service, along with similar competitors, at least relies on the traditional driving setup--a human behind the wheel.
Those cabbies may be even angrier when they learn the next generation of transport vehicles doesn't leave a seat for them. Google already revealed its plan to make its driverless cars available, leaving analysts to predict the next likely transport sector to adopt the emergent technology.

Joseph Stromberg at Vox discussed why the trucking industry is ripe for the inclusion of a nonhuman driving system. The market, responsible for about 68.5 percent of domestically shipped goods in the United States, would be made more efficient by making use of fleets of driverless trucks.

"The most immediate reason why driverless technology will doom truckers is the same reason it'll be the end for cab drivers: the cost of a machine operating a vehicle will be dramatically cheaper than the cost of a human," Stromberg said.
First, human drivers have many shortcomings relative to their machine counterparts. Sleep, time off and illness are all problems that don't arise with an automated driving system. And jobs lost by using driverless trucks are, at the very least, unattractive, as the industry constantly deals with poor retention rates--there was a 98 percent turnover rate in 2012, according to the American Trucking Associations--and the inability to find enough drivers.

Furthermore, research is already underway using highway systems, the 18-wheelers natural habitat. It's easier to program a machine to navigate the open road rather than city streets, and Japanese and European researchers have been working for years to realize the benefits of caravans of driverless trucks (those benefits being lower fuel expense and decreased greenhouse emissions).
After the trucking industry, there is another organization with even more of an interest in subtracting the human element from its transport operations: the U.S. Army. In the past week, the Army has announced benchmark success in one of its driverless projects and the conception of a new one.
June 17, 2014 | By Robert Bartley

Driverless vehicles have potential to change the way we drive and work

Driverless vehicles have the potential to revolutionize the way we drive as well as the way we conduct business, as demonstrated by a number of recent developments.

On Friday, the University of Michigan announced plans to open a 32-acre research facility devoted to testing the on-road capabilities of driverless cars.

Officials plan to start construction of the research facility this summer. The imitation city--called the Mobility Transformation Facility--will include merge lanes, stoplights, intersections, roundabouts, road signs, a railroad crossing, building facades and construction barrels. The majority of which will be repositionable, according to a press release from the university.

Ryan Eustice, an associate professor of naval architecture and marine engineering involved with the university project, said the intense type of testing needed to ensure the safety of driverless cars on city streets cannot be done at current facilities.
"Every time a vehicle comes around the loop, it can hit something unusual," he said. "That will give us a leg up on getting these vehicles mature and robust and safe."

The sophistication of the planned project outpaces the sites that auto companies use right now, Eustice said. The university partnered with Bosch, Econolite, Ford, General Motors, Toyota and Xerox on the testing area, he added.

On Monday, the West Australian reported that the British-Australian multinational Rio Tinto's fleet of 53 driverless mining vehicles--the largest of its kind in the world--had loaded over 200 million tons of iron ore since they were activated a few years ago.
And at the end of May, Google released video demos of its highly touted fleet of driverless cars.
June 10, 2014 | By Robert Bartley


Meanwhile, Freight is Hot

WASHINGTON — The U.S. freight industry will have a banner year in 2014, having already seen some of the strongest freight growth since the end of the Great Recession, a transportation analyst said Tuesday.

Although general U.S. economic growth was lackluster in the first five months because of severe weather and flat exports, freight shipments rocketed 13.1 percent and freight payment rose 11 percent in the same period, said Rosalyn Wilson, of Parsons. Wilson authors the Council of Supply Chain Management Professionals’ annual State of Logistics report.

After a sluggish start, the overall economy is improving, with retail sales and home construction sales picking up and the employment picture brighter, she said. However, she noted that GDP improvements don’t always equate to freight growth because reduced imports and higher inventories, both positives for the broad economy, lower transport demand.

“The health of the freight market is a solid indicator of the direction the economy is moving,” Wilson said at the unveiling to the annual report in Washington. “All indications are that freight will grow moderately for the rest of the year and the economy should follow suit.”

 

 



 

 

The ROEMER Report  

I'm Wellington Roemer. Publisher of the Roemer Report. Since 1978, The Roemer Report has been giving trucking executives the information you need to run your business. We research the industry's metrics, politics, developments, technological and operational trends so you don't have to. Our Report saves you time by digesting key industry news into short, clear stories. - Avoiding information overload. Thank you for giving the Roemer Report your attention today, we work hard to be worth your time.

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