Trucking companies, already shorthanded are anticipating even more growth in the economy and are working hard to hire more truckers. The trucking firms are also charging more. Brian Baskin and Jennifer Smith report that compared to last year, companies are charging 22% more for trucking goods. They write:
“Can you find trucks? Can you find drivers? That’s the biggest factor,” said Ravi Shanker, an analyst with Morgan Stanley. “You’re probably going to get a lot of freight… but at the same time hiring drivers is going to be really hard.”
J.B. Hunt Transport Services Inc., which arranges freight shipments by road and rail, on Thursday reported its trucking segment earned 13% more per load in the fourth quarter. However, operating income for the unit fell 5% due to rising wages, unseated trucks and other expenses. Overall revenue was up 16% to $1.99 billion, but costs rose faster, growing nearly 21%, and the overall operating profit fell 25% from the year before to $145.8 million.
Other large transportation companies are scheduled to report results starting next week.Marten Transport Ltd. , which operates a large fleet of refrigerated trucks, is due to release earnings on Thursday. Railroads, which compete with trucking companies for freight, also report next week, including Norfolk Southern Corp. on Wednesday and Union Pacific Corp.on Thursday.
Trucking companies have a chronic problem attracting enough drivers. Many veterans are retiring, and potential recruits often balk at the prospect of long hours behind the wheel and nights sleeping in cramped cabs. In 2015, the last time freight demand was this strong, many fleets raised pay multiple times.
The hunt for drivers could get even more frantic this year, analysts say. The unemployment rate was 4.1% in December, compared with 5.7% at the start of 2015, according to the Labor Department, meaning the pool of potential truckers is smaller. A new federal rule that will make it easier to enforce limits on drivers’ time behind the wheel is also expected to spur recruiting.
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