Key Factors That Cause a Capacity Crunch
Capacity crunch is a term in the shipping industry that simply refers to a shortage of trucks available for delivery. While the term became popular in 2014, the industry continues to experience unprecedented capacity issues, with the upcoming ELD (electronic logging device) implementation deadline only serving to intensify the problem. Understanding the key factors that cause capacity crunch will bring awareness to shippers and allow them to take preventative measures against it to allow for continued success during a capacity crunch. Here are some factors that contribute to capacity crunch:
The U.S. driver shortage has long been on the rise due to the decrease of desirability of the truck driving job among available jobs for young workers seeking employment. Because truck drivers are on average getting older and fewer, there is a significant decrease in the number of qualified, experienced truckers, resulting in a shortage of nearly 50,000 drivers. This statistic is projected to double or even quintuple over the next decade, and remains one of the primary factors in capacity crunch.
Increased Market Stamina
Sudden growth in the stock market leads to an increase in commerce and manufacturing across the country, forcing shippers to move more product. As the demand for shipping increases, the available capacity for shipments decreases. Plus, we have recently seen and will likely continue to see, continuous stock market growth.
The ELD Mandate, which requires truck drivers to log their hours on the road and places a restriction on the number of hours they can drive in a day, contributes to capacity crunch by increasing the time it takes for shipments to arrive at their destination. This then contributes to the decrease in number of available trucks for shipping at any given time.
Severe weather and storms can have just as big of an effect on capacity crunch in multiple ways. When disaster strikes, supplies such as building materials and survival necessities must be shipped to affected areas, putting a strain on the transportation resources. This factor thus has far more of an effect on capacity crunch during hurricane season as the number of instances of large-scale disasters increases exponentially in comparison to the rest of the year. In addition to the need for supplies, large-scale disasters such as hurricanes that result in flooding can wipe out the infrastructure in coastal areas, preventing access to main roads that shipment trucks typically traverse.
Amazon has single-handedly been a key factor in contributing to global capacity crunches through the release of new products or services. Although Amazon has its own logistics network, it sets the standard for all shipping practices and the ripple-effect can actually be felt worldwide. For example, within months of Amazon offering free, two-day shipping through Amazon Prime, free shipping became the e-commerce standard, forcing shippers to move products faster without increasing costs, thus restricting capacity.
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