In a conference call last week on quarterly earnings, meat purveyor Tyson Foods called out higher trucking costs for an expected hit that eventually will be felt at the supermarket.
“[F]reight costs have escalated as trucking capacity has tightened nationwide. … We estimate this will add more than $200 million to our costs this year,” said CEO Thomas Hayes.
“And, ultimately, the consumer is going to pay for it at some point,” he added later, according to a transcript of the call on Tyson’s website.
Reuters reports that other companies have cited transportation costs for lower quarterly profits, which makes sense since trucks move 70 percent of U.S. freight by weight.
The culprit? In part, fewer drivers and higher diesel prices just as the improving economy boosts demand for big-rigs, says the American Trucking Associations.
The trade group pegged driver “churn” at large fleets at an annualized rate of 95 percent last year, which it said reflected fierce competition among companies for experienced truckers.
The group predicted a growing shortfall of drivers in the years ahead. Current big-rig employment stands at 1.7 million, according to the U.S. Bureau of Labor Statistics.
In New York, tractor-trailer drivers are on the Department of Labor’s list of “jobs in demand today,” especially in the Hudson Valley, North Country and Southern Tier.
In the Capital Region, the department classifies employment prospects for drivers as “very favorable” long-term, and expects jobs will grow 13.5 percent between 2014 and 2024.
But it’s hard work that doesn’t pay as well as it used to, says Steve Viscelli, a sociology lecturer at the University of Pennsylvania. He spent six months as a trucker in 2005 for doctoral research that became the 2016 book “The Big Rig: Trucking and the Decline of the American Dream.”
“Long-haul is a tough job and carriers know that they would have to double pay to have the kind of [lower] turnover that other employers have,” he told me by email. “So they keep pay high enough to attract workers — who don’t know how hard it is to work 80 hours a week and live out of a truck for two or three weeks at a time.” They then convince some drivers to become independent contractors, which lowers company costs but “usually ends up being much worse” for the no-longer-an-employee trucker.
Viscelli, also a senior fellow at the university’s Kleinman Center for Energy Policy, currently is researching self-driving trucks and a concept he calls “urban truck ports,” where long-haul loads could be shifted onto smaller trucks at the outskirts of cities to maneuver tight streets in off-hours.
He says that even with self-driving trucks, “you will still have plenty of jobs for drivers.”
“In fact, there will likely be more jobs in the next 10-20 years because of the growth in last-mile delivery and ecommerce shipments.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at firstname.lastname@example.org.