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Truck Driver Shortage Impacting Shipping, Retail Prices

Factors including electronic-logging of driver hours, a growing need for shipment of items by Amazon and a surge in retirement of baby-boomers have meant a shortage of freight truck drivers and rising shipping costs.

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The American Trucking Associations reported a shortfall of 51,000 truck drivers nationwide in 2017, up from 36,500 in 2016 and 20,000 in 2013. The ATA projects the driver gap will increase to nearly 100,000 by 2021.

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“We’ve probably never had a situation like we have today, where the demand is strong and capacity is constrained,” Bob Costello, chief economist of the American Trucking Associations (ATA), a trade group representing trucking companies told USA Today. The ATA also reported that transportation companies are taking steps to attract drivers, such as pay increases and signing bonuses.

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Ben Cubitt, senior vice president of Transplace, a freight management firm noted that 99% of trucks nationwide are in use, up from 92% in October 2015. “Every truck is spoken for every day,” he said, adding that trucking companies have increased rates 6% to 10% in contracts with shippers over the past year to offset higher wages and take advantage of the strong demand. Trucks account for almost two-thirds of all tonnage moved in the U.S., according to the American Trucking Associations.

A new federal mandate for electronic logging devices that took effect in December, limiting the number of hours drivers can work, has had a big impact. These devices now take into account all time spent on the road, even waiting for cargo to be taken off a truck, which can cause hours to add up quickly and push a driver past the legal limit of consecutive work hours.

“There is a lot of uncertainty within the trucking world right now about what the effects of the [electronic logging devices] mandate’s going to be in the long term,” Steve Viscelli, a sociology professor at the University of Pennsylvania told USA Today. He added that E-commerce also has had a “huge effect.”

Price increases passed on to consumers are low so far, but are expected to increase as the driver shortage continues.

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