Transportation

Oct. 18, 2018

How JM is Countering Continued Capacity Challenges in the Transportation Industry

By Dave Sardinta, Johns Manville Sr. Logistics Manager

A capacity crisis continues to plague the transportation industry – this occurs when there are more loads than there is capacity (or trucks) to move those loads. Continued economic strength, government regulations and the Electronic Logging Devices (ELDs) continue to be the driving factors.

The Morgan Stanley Van Index shows the ratio of available loads for every available truck, and has come off its high of a 9:1 ratio and settled back down to a 3:1 ratio (note the red line in the chart). The ratio is forecasted to increase slightly, driven by strengthening demand into peak season.

Driver shortage remains ever-present in the transportation industry – time away from family and a less-than-glamorous lifestyle are among the deterrents for attracting new drivers. Carriers are increasing driver pay to never seen levels to keep their current drivers and to attract new ones. As driver pay rises quickly and overall operating costs increase, shipping companies are having to charge higher rates to move goods. 

Transportation Graphioc Square Space.png

 

DAT Solutions wrote that it cost nearly 40 percent more to ship a “dry good” a mile than it did a year ago. In fact, according to DAT Solutions and the Cass Freight Index Report, shipping cost hit an all-time high earlier this year and have remained near that level ever since.  This means companies like JM, are experiencing unplanned inflation for both inbound and outbound transportation cost with no end in sight. 

So, what is Johns Manville doing to combat these challenges? We are working hard in our continued pursuit to become a “Shipper of Choice.”

On Oct. 23, we’ll rollout a new check-in/check-out process for our carriers at our larger shipping locations. Utilizing kiosks, this new process will provide real time information for our warehouse and loading crews as well as allowing us to measure our facilities loading performance. The goal is to have carriers loaded and, on the road delivering our products as fast as possible.

We’re also evaluating our loading operating hours and staffing, and to ensure efficiency each step of the way.

Our goal is to partner with our carriers – and all organizations that support our efforts to deliver product solutions for our customers – with the respect and first-class partnership that they deserve.