Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
It may not have been the first salvo fired in the truck driver wage wars, but it certainly packed a wallop.
US Xpress Enterprises, a Chattanooga, Tenn.-based truckload carrier, said earlier this week it will raise the pay of its
over-the-road solo drivers by an average of 13 percent to a maximum of 46 cents per mile, effective Aug. 25. The increase will
put US Xpress' solo drivers in the top 10 percent of solo driver wage earners in the industry, the company said in a statement.
US Xpress added that, on that date, it would eliminate its sliding pay scale for all its over-the-road solo drivers. It will
replace that model with a simplified rate structure under which all drivers will earn the same base per-mile pay regardless of the
length of haul of their trips, it said. Drivers had complained the sliding-scale formula made it difficult to calculate their base
pay from week to week, the company said.
The increase is the largest one-time driver wage boost in US Xpress' 28-year history. The adjustments will boost annual pay
for solo drivers to between the high-$40,000s and the low-$50,000s, depending on the level of experience, the company said in an
e-mail.
The changes will not apply to company drivers that operate as two-person teams. Nor will it affect drivers providing so-called
dedicated services on behalf of certain customers. Under such an arrangement, a trucker commits rigs, trailers, and drivers for a
customer's exclusive use over what is normally a three- to five-year contractual period. In return, the customer compensates the
provider for an agreed-upon number of miles driven on a round-trip basis. Dedicated services have become increasingly popular
because they offer capacity assurance in a world of tightening equipment and driver supply.
U.S. Xpress said it made the changes now because it believes solo drivers will be the driver type in highest demand to support
the "emerging business opportunities" it sees headed its way. Solo drivers account for about 1,500 of US Xpress' driver pool of
approximately 8,000 people.
US Xpress already pays its solo drivers an additional 3 cents per mile if they are on the road for 30 days at a time and an
additional 5 cents per mile for every 45 days at a time they are away.
INDUSTRYWIDE TREND?
Benjamin Hartford, a transportation analyst for the investment firm Robert W. Baird & Co., said the US Xpress increases are
unusually high for the truckload industry. Knight Transportation, which has arguably been the most prominent truckload carrier
to hike driver wages this year, came in at about a 5- to 10-percent increase, Hartford said. The analyst said he didn't expect
the US Xpress increases to be the norm.
However, Nöel Perry, a leading transport economist, said that if the economy gains momentum, increases of that magnitude
will be needed to attract drivers to the field and avoid the triple-digit turnover plaguing the industry. Perry has estimated the
current driver shortage is exponentially higher than the 30,000 figure quoted by the American Trucking Associations.
US Xpress wouldn't comment directly on whether its higher costs would be passed on to shippers in the form of higher freight
rates. "Raising freight costs is an industrywide concern, but our customers understand the situation we are in as an industry and
the importance of having enough trucks to haul their freight on time and without incident," it said in the e-mail.
Wage increases are carriers' latest effort to attract and retain qualified drivers in an increasingly tight labor market. Swift
Transportation Corp., the nation's largest truckload carrier by sales, said last month it plans to institute the largest driver
wage increase in its 52-year history between now and year's end. According to an industry executive, some drivers are receiving
signing bonuses as high as $15,000, nearly three times what had been considered the standard amount for signing bonuses. In
addition, drivers are becoming eligible for bonuses after just six months, according to the executive.
About 7 percent of all carriers are now tying driver pay to performance standards, with performance-based pay adjusted
frequently, Gordon Klemp, president of National Transportation Institute, a research firm specializing in driver issues, said
earlier this month in a webcast conducted by investment firm Stifel, Nicolaus & Co.
Fleets are loosening their hiring standards in an effort to cope with the shortage, Klemp said in the webcast. He said some
companies are looking to recruit individuals as young as 22 years of age, down from the standard minimum age of 23 to 24 years
old. Carriers that recently required applicants to show two years of verifiable driving experience now require as little as three
months of verifiable experience, he said.
AN UPHILL CLIMB
Despite these steps, the industry faces an uphill battle to recruit qualified drivers, according to Klemp. Driver pay has
been losing ground to inflation, Klemp said. Based on 2007 base wages the average dry van driver has seen purchasing power
erode by about 10 percent, he said.
Additionally, over the past 12 years, drivers have lost ground compared to the general wage earner, according Bureau of Labor
Statistics data quoted by US Xpress. In 2013, the typical annual wage for all tractor-trailer drivers nationwide was $40,940,
11.8 percent lower than the overall national average wage of $46,440. In 2001, the differential between the two wage scales stood
at about 1 percent, the company said.
Not only is the pay substandard given the nature of the work, but new government rules and company policies have resulted in
increased micromanagement of drivers and have diminished the freedom and flexibility that traditionally drew people to the
profession, he said.
To seriously address and resolve the issue, truckload driver pay would effectively need to double from current levels, Klemp
surmised. However, he believes such a scenario is unlikely given continued modest economic growth, a still-fragmented carrier pie,
and shippers' intense focus in reining in transportation costs.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.