There’s ‘no relief in sight’ for high trucking costs: BofA

A massive shortage of truckers continues to be a bottleneck for supply chains across North America, serving as a significant factor in the American inflation story and leading to skyrocketing trucking costs. According to a recent Bank of America Global Research (BAC) report, the crunch seen in the trucking industry is showing no signs of abating.

“One shipper’s rates [are up] +33% [year-over-year], no relief in sight; sees labor shortages & expect pricing to stay elevated,” BofA’s report reads.

As part of BofA’s Truck Shipper Survey #249 for the week of Jan. 27, 2022, the company surveyed 50 shippers across the US to get current views on freight supply and demand. Shippers noted fleet capacity availability drops and elevated prices across the industry, with nearly 60% of respondents expecting shipping rates to rise and 30% expecting capacity to be lower.

“An Industrial shipper noted that driver pay increases are leading to sustained truck rate gains … [another] Industrial shipper is seeing some recovery in regards to hiring drivers, but noted it is seeing some stabilization after 20% of capacity was impacted by Covid in the short term,” the report reads.

BofA also found that shippers’ short-term positive outlooks fell to 64% from 76% in the previous survey, neutral outlooks rose from 32% to 21%, and negative outlooks climbed to 4% from 3%, demonstrating an overall deteriorating outlook for the industry from within the space.

“While some respondents do not see any rate relief in the market, even noting panic buying of capacity and that driver shortages remain, some shippers noted select recovery in markets, though accepted that rising driver pay will keep rates elevated,” the report reads.

A tractor trailer rig pulls into a terminal for a trucking company that has a $10,000 hiring bonus offer posted on a trailer at their facility in Harmony, Pa., Wednesday, May 5, 2021. (AP Photo/Keith Srakocic)

A tractor trailer rig pulls into a terminal for a trucking company that has a $10,000 hiring bonus offer posted on a trailer at their facility in Harmony, Pa., Wednesday, May 5, 2021. (AP Photo/Keith Srakocic)

Trucker shortage a ‘national priority’

In an opinion contribution to The Hill, 24th US Secretary of Labor and 18th US Secretary of Transportation Elaine Chao called the national trucker shortage a “national priority.” She described the trucking sector as being one of the most vital as truckers move 71% of all freight in the US

In an effort to alleviate the labor shortage seen in the industry, the federal government is implementing an apprenticeship program to train thousands of truck drivers as young as 18 as part of the infrastructure package. According to Chao, making trucking a more attractive job in the short-term or as a long-term career is a difficult but necessary goal for the government.

“So there are a lot of moving parts affecting new driver recruitment and retention in the trucking industry, including encouraging those just 18 years of age to become apprentice truck drivers,” Chao said. “But as the past two years have made brutally clear, the trucking sector is absolutely critical to this nation’s economy and to the health and well-being of the American people, during good times and crises. So, these are not just trucking issues, they are everyone’s issues.”

Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV

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