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The State of the Freight Industry in Five Minutes By Kevin Brink, Newgistics Freight Services kbrink@newgisticsfreightservices.com uch like the foodservice industry, the freight world has seen its fair share of evolutions. Once again, the wheels of evolution are turning as the freight world continues to debate all the familiar themes that date back to the glory days of the industry, as well as raise many new issues that will affect both the present and future of how manufacturers and dealers ship to customers. As you are reading this, federal regulations concerning hours of service are being put into motion that will affect Fewer people are attracted to the job and tighter regulations are squeezing experienced drivers with lackluster accident or safety records from the pool of employment. Couple this with the aforementioned hours of service regulations,and you have a legitimate shortage of drivers. Fortunately for FEDA members, Newgistics Freight Services (NFS) is partnered with 10 of the top 20 carriers in the nation, all of which have documented programs to ensure that their pool of drivers stays full. A shortage of drivers in the market, however, would amplify the next The Federal Motor Carrier Safety matter that is likely to surAdministration's new Compliance, face in 2013 and carry over into the near future:a lack of Safety, Accountability (CSA) program over-the-road carrier capaciis evolving this year and is rewriting ty. At its core, the capacity the structure of the market—changing crunch is simple: freight demand has increased since the way carriers operate, how they the fall out of 2009, while screen and hire drivers and how capacity has not. Some customers and brokers view them. reports show that the number of trucks on the road how long truck drivers spend behind now is equivalent to the number of the wheel.The long and short of it is that trucks on the road in 2004. This is drivers may be required to spend more because LTL and truckload carriers still time off duty between workweeks and have not added capacity back into the take rest breaks after eight hours of driv- market due to the associated risks of ing. Quite simply, this means drivers will doing so. And even if carriers took on be spending less time on the road. the expense to put additional equipAlong with this, the seemingly ageless ment back on the road,it is possible that truck driver shortage is coming to a there will not be enough drivers to run head. Finding both experienced and said equipment. new truck drivers has become an On the other hand, Newgistics is increasingly daunting task for carriers to ensured capacity due to the overall undertake and many are reporting health of our Top 5 status with our carturnover rates higher than 100 percent. riers, which means FEDA members are M 32 FEDA News & Views ensured capacity as well. However, the same cannot be said about shippers who are dealing direct with carriers or with other 3PL's. Adding to the physics of the capacity crunch, the Federal Motor Carrier Safety Administration's new Compliance, Safety, Accountability (CSA) program is evolving this year and is rewriting the structure of the market—changing the way carriers operate, how they screen and hire drivers and how customers and brokers view them. For example, the 2013 rendition of the CSA compiles a collection of real-time data to score carriers in several safety-related categories. This data is used to create an overall carrier rating and affects whether or not brokers or shippers will use a particular carrier for service. Since a number of LTL and truckload carriers are receiving poor ratings and the information is public, brokers and shippers are opting not to use them, thereby removing additional capacity from the market.To protect FEDA members, Newgistics has a process that automatically disqualifies carriers with poor CSA ratings so the prospect of working with a less than reliable carrier is removed. All of these factors are leading to a shift back to the original workhorse of the freight industry—rail. Intermodal moves,where a trucker makes the initial pickup and final delivery but the freight actually travels 90 percent of the way via rail,are becoming one of the most viable options for large long-haul shipments for a number of reasons. Carriers are focused on aligning the capacity they continued on page 40