Trucking Will Be Pressured Over the Long Haul

Finding qualified drivers is just one of the challenges that continue to push transportation prices to a new normal.

Originally printed in the September 2021 issue of Produce Business.

The pressures driving transportation costs upward aren’t going away, transportation executives say, but market forces are coming into play that will slowly create a new marketplace balance.

Unfortunately, that new rate base is going to be higher than it was just a couple of years ago. This summer, the U.S. produce industry witnessed $15,000 coast-to-coast shipping costs, and COVID-19 has been a big part of the problem. Truck drivers and the people who keep vehicles on the road have been struck with illness, but many simply walked away from jobs they regarded as too dangerous to continue, and have used government stimulus payments and unemployment to keep going without work, or they have found employment in other sectors. On top of that, interested replacements have had trouble getting training and licensed, due to movement restrictions and government shutdowns imposed to slow the coronavirus spread.

The American Trucking Association recently released its advanced seasonally adjusted For-Hire Truck Tonnage Index for June, which decreased 1.5% after falling 1% in May.

“Tonnage has definitely flattened out, on average, over the past six to nine months,” says ATA chief economist Bob Costello in announcing the index data. “The good news is that it remains slightly above 2020 levels. Supply chain issues are likely putting some downward pressure on tonnage. But it is also likely that tonnage isn’t growing as much as it could because of industry-specific supply constraints. This index is dominated by contract freight, and the for-hire truckload carriers have seen their tractor counts fall because they are having difficulty finding qualified drivers. It is difficult to move more tonnage with less equipment, which is why we are seeing strong volumes in the spot market as shippers scramble to get loads moved.”


Transportation challenges will continue, as U.S. ports remain busy with imports. The monthly Global Port Tracker report commissioned by The National Retail Federation and conducted by Hackett Associates, predicted record import volumes for 2021, which will strain transportation systems across the U.S. Pressures from a coronavirus-rebounding U.S. economy are also driving demand and keeping backlogs from eroding.

“The strain of the continuing economic expansion is putting considerable pressure on the logistics supply chain,” Hackett Associates founder Ben Hackett said in announcing the June report. “We’re seeing a lack of shipping capacity, combined with port congestion, as vessels line up to discharge goods from both Asia and Europe. Delays are stretching to landside as port terminals struggle with space shortages, and labor challenges are affecting ports, railroads and trucking companies alike. This part of the recovery is not a pretty sight.”

Kenny Lund, executive vice president of Allen Lund Co., La Canada, CA, says the high price for long-haul truck transport recently reached can’t remain at those altitudes forever, but “there’s a new base now, and we’ll never go back to where it was before.”

He explains a new base will emerge from a labor market disrupted by the COVID-19 pandemic, stimulus payments and decisions by drivers and potential drivers about where they want employment. Drivers understand they can get more for their labor and the industry must deal with that issue, he adds, including the realities of more generous driver wages and benefits.

“They have to pay more to put drivers in seats,” Lund says.

Paul Kazan, president of Target Interstate Systems, headquartered in Bronx, NY, says rates have improved in parts of the country, such as the Northeast, but there’s no guarantee that will last.

“We look at this being a bit seasonal, as so much produce is coming in local,” he says.

On the other hand, produce that can’t be sourced locally still has the burden of higher-than-traditional rates. In the spring, Kazan says, as rates peaked, his company did all it could to work with carriers and explore new ideas about how to mitigate prices. However, temporary adjustments don’t address the long-term challenges.

“So much of it is drivers being sucked up by non-produce freight,” Kazan says. “Asian imports are still stacked up as soon as they get to the ports,” he says. “They are not going to go by rail, adding two weeks to the two months they traveled, whether on a reefer or not. And that pulls drivers and equipment.”

A new rate for truck transportation — lower than now, but higher than once accepted — is coming, but the situation has to play out, says Fred Plotsky, president, Cool Runnings, Kenosha, WI. Costs tend to rise over time and, although some of the excessive costs associated with the COVID-19 pandemic will recede, rates won’t magically realign with the past but will balance as the market reaches a greater degree of normalcy.

“All things come to an end, good or bad,” he says. “Our prices are up 40% from pre-coronavirus. There are embedded costs that always rise, but it will find its level.”

Higher costs have fueled higher rates, says Jeff Moore, vice president of sales for the Midwest region with the Tom Lange Co., Springfield, IL.

“Depending on the regions or lanes, we’ve seen increases range from 30% up to 100%,” Moore says. “It just depends on when and where you are loading.”


Even if some progress has been made in alleviating the disruptions created by COVID-19, the circumstances created or at least furthered by the pandemic will continue to affect the transportation sector.

“The driver and truck shortage continues to be a major challenge, and we really don’t see any relief on this through at least 2022 and, likely, well into 2023,” Moore notes.

“Last year’s issues were higher costs, inconsistent access to some regions due to slowdowns, scheduling and attendance issues,” he adds. “Higher costs and the continuing pressure upward continues. This is true in transportation costs, labor and supplies. And with recent spikes with the Delta variant, we continue to see volatility across the board.”

Demographics also impact the transportation sector. For many young people, trucking is no longer seen as an attractive career choice. As a result, the trucking industry is more dependent on immigrants, but coronavirus has become a barrier to trained truckers entering the United States and resident immigrants taking lessons and getting licensed.

Kazan notes that potential drivers have been restrained by the pandemic’s effects on the operations of driving schools here and overseas in countries where many truck drivers now originate such as India. Not only that, but getting licensed in places where local government partly or fully shut down has also been a barrier. He says trucking companies are increasingly adding mechanization, but that won’t add drivers to fill and transport trailers and, so, can’t alone bring down transportation rates.

“Any carrier who can will add equipment,” he says. “The only problem is finding drivers to fill them.”

He adds, “I look forward to the autonomous self-driving trucks.”

Technology is also changing some transportation office-related functions.

Cool Runnings’ Plotsky says the coronavirus crisis has completely shaken up how his company conducts its business, which will affect how transitions are accomplished. He says many office personnel were able to adapt to working at home and may prefer the comfort and safety of telecommuting even after the coronavirus is tamed.
“We had to change the model of how we did business for 34 years,” he says. “You do all that you can. You run your business. You want to be profitable. You want to keep staff. Fortunately, we weren’t shut out of working, but we went from an office full of people to a company full of people working remotely.”

Plotsky says his office now is a different, less cluttered, environment.

“Overnight, we had to go paperless because everyone had to work from home and to figure out, how do we do that?” he says. “We shredded four tons of paper. If you go there now, there isn’t even a cabinet.”

As it spread, COVID-19 made its presence felt just about everywhere in the transportation sector. Some jobs could be worked from home but, in many cases, people who had to interact with the environment chose just to bunker in for the duration, with stimulus help, or changed occupations to something they felt was safer.

“We immediately saw that drivers were often asked to not enter shipping or receiving areas and load. Count became the responsibility of the shipper and not the drivers’ responsibility,” Lange’s Moore says. “The same was often true on the receiving end, and many places went to a paperless system when possible. One interesting development from this I’ve often heard from several people in the industry is some folks feel there have actually been fewer truck claims.”


As the coronavirus crisis abates somewhat, labor remains a central issue and transportation companies keep trying to cope.

“For many companies, I would say maintaining service levels and fully staffing their operations remains the biggest challenge,” Moore says.

“Finding talent is definitely much more challenging, but I feel our company has done an excellent job of holding onto our talent and maintaining our workforce,” Moore says. “We are employee owned, and that has proven to be a great advantage.”

At Allen Lund Co., Kenny Lund says truck sales have gained, so needed equipment is coming, and that should help stabilize costs. A Frost & Sullivan report backs him up on the equipment front. A recent analysis from the San Antonio-based consulting firm suggests manufacturing of both light commercial vehicles and medium- and heavy-duty trucks will gain worldwide in 2021 versus 2020.

But, Lund warns more vehicles on the road won’t persuade drivers to give back the gains they’ve made. So, equipment additions should improve the situation, he says, but won’t push rates back to or even close to pre-coronavirus levels.

There are other challenges facing the trucking sector in the pandemic environment, beyond the driver shortage.
“A shortage of warehouse labor has many shippers behind on shipping on a daily basis,” Moore says, offering one example. “We’ve seen ranges from 12 to 36 hours in delays for shipping. This is definitely a continuing pain point.”
Issues with overcapacity in storage facilities and distribution networks, including the costlier cold chain, also have to be weighed in among more pressing issues.

“It continues to be a somewhat bumpy road, but those speed bumps aren’t as big as they once were,” Moore says. “There are the occasional spikes, but much has been learned through these challenges and the industry has responded well, for the most part.”


Consumer habits have changed in the coronavirus crisis, Lund observes, and now younger consumers have witnessed a food shortage, even if it was short-lived. If long-term eating habits change among younger consumers as a result, he says transportation will feel the effects and the produce industry may see more competition for trucks from other food sectors.

The coronavirus crisis also emphasized a renewed recognition of the importance of relationships.

“We’ve seen that the relationship is valued more now,” Lund says. “Uber and Amazon were telling the industry, ‘We are going to kill off the broker, technology is going to replace all that.’ But then when you couldn’t get trucks and costs were going up, a friend in the industry was good. The relationship was important. A lot of transportation companies were flat in load count. We were up 23%, so I’m proud of our company and our relationships.”

Over time, Cool Runnings’ Plotsky says market forces will restore the right level of equipment and labor, but it will not happen overnight.

“It’s going to take some time,” he says. “One step at a time.”

And the produce industry will have to adjust.

“We’ve gotten to a new level,” Target Interstate’s Kazan says. “I don’t think the rates will ever get below $8,000 from California.”