The boomerang effect of trucking capacity has hit a tense moment.

Employment of truck drivers in the for-hire industry, according to the Department of Labor, hit an all-time high in August of 2019. Just eight months later, driver employment had plummeted to its lowest point in over half a decade, erasing hard-earned gains by fleets since the Great Recession to build up the driver force and maintain capacity needed to move the modern economy.

What’s more, between August of 2019 and February of 2020, before COVID-19 hit, fleets had been shedding equipment, trying to mitigate the effects of excess capacity and keep rates stable.

Doesn’t that seem like a world ago?

For the last year, fleets have been grappling with the exact inverse of those problems. The economy is finding solid ground after a tumultuous, to put it mildly, 2020. And what’s coming into focus is a stark and frankly somewhat alarming reality: The amount of freight that needs to be moved, and moved quickly, is outpacing the number of available trucks and drivers by a wide (and perhaps still widening) margin.

Over the years, the logistics industry has referred to these times of market imbalance, when load-to-truck ratios are heavily tilted toward the demand side, as “capacity crunches” or even “capacity crises.” In 2016, I recall one freight analyst predicting “the mother of all capacity crises” looming in the coming decade. Did he have a crystal ball?

If there’s a term to describe what we’re facing today, and what we’re likely to continue facing in the coming 12 months, that could be it.

Trucking fleets simply can’t scale up right now. They can’t hire drivers, which isn’t their fault, since nearly every business in the country right now is talking about worker shortages. They also can’t secure equipment, since new trucks and trailers can’t be manufactured at the rate needed. Even the equipment that’s being produced is largely replacements, not a net increase in capacity.

Trucking fleets are against a wall. They’re raising driver pay rates, but that’s not enough to bring in the sheer number of drivers needed to keep up with freight demand.

It all comes down to simple supply and demand: demand for truck service is soaring at an unprecedented rate, while supply is struggling even to maintain. We’re now starting to see in real time the downstream effects that analysts like Bob Costello, chief economist at the American Trucking Associations, have talked about for years. What it means is shortages on grocery store shelves, at factories and on car lots. And, of course, climbing costs for trucking service.

The driver shortage, in short, has officially become the clog in the economy that we’ve been warned about.

The good news, for shippers and ultimately end consumers, is that the right technologies are arriving at the right time to address these capacity issues and help keep the economy moving. We’re already seeing a bifurcation developing in the market, in which some shippers and logistics providers are realizing the need to adopt digital solutions, and others are simply throwing dollars at the problem, hoping that somehow fixes things.

Yet, as always, personnel will look for ever-greener pastures.

Of course, there’s still so much uncertainty in the market. Will a shift in consumption from goods to services help alleviate some of these supply and demand pressures? Maybe. But that’s not going to make capacity any easier to find, and it does nothing to address the lessons we’ve learned in this current capacity crisis.

Tomorrow’s solutions are needed today — they’re needed now. COVID-19 has been referred to as the “great accelerator.” That’s never been truer than it is for the driver shortage and trucking capacity at large. It’s incumbent upon logistics providers to develop and implement the right tools to address these wide-scale issues in the freight industry.

The current capacity crunch or crisis — whichever terminology you prefer — isn’t going to simply cycle out. It’s here to stay. The only solution is finding new tools to answer the call.

Christopher Thornycroft is the senior vice president of carrier operations for Redwood Logistics, a logistics platform company headquartered in Chicago.

The boomerang effect of trucking capacity has hit a tense moment.

Employment of truck drivers in the for-hire industry, according to the Department of Labor, hit an all-time high in August of 2019. Just eight months later, driver employment had plummeted to its lowest point in over half a decade, erasing hard-earned gains by fleets since the Great Recession to build up the driver force and maintain capacity needed to move the modern economy.

What’s more, between August of 2019 and February of 2020, before COVID-19 hit, fleets had been shedding equipment, trying to mitigate the effects of excess capacity and keep rates stable.

Doesn’t that seem like a world ago?

For the last year, fleets have been grappling with the exact inverse of those problems. The economy is finding solid ground after a tumultuous, to put it mildly, 2020. And what’s coming into focus is a stark and frankly somewhat alarming reality: The amount of freight that needs to be moved, and moved quickly, is outpacing the number of available trucks and drivers by a wide (and perhaps still widening) margin.

Over the years, the logistics industry has referred to these times of market imbalance, when load-to-truck ratios are heavily tilted toward the demand side, as “capacity crunches” or even “capacity crises.” In 2016, I recall one freight analyst predicting “the mother of all capacity crises” looming in the coming decade. Did he have a crystal ball?

If there’s a term to describe what we’re facing today, and what we’re likely to continue facing in the coming 12 months, that could be it.

Trucking fleets simply can’t scale up right now. They can’t hire drivers, which isn’t their fault, since nearly every business in the country right now is talking about worker shortages. They also can’t secure equipment, since new trucks and trailers can’t be manufactured at the rate needed. Even the equipment that’s being produced is largely replacements, not a net increase in capacity.

Trucking fleets are against a wall. They’re raising driver pay rates, but that’s not enough to bring in the sheer number of drivers needed to keep up with freight demand.

It all comes down to simple supply and demand: demand for truck service is soaring at an unprecedented rate, while supply is struggling even to maintain. We’re now starting to see in real time the downstream effects that analysts like Bob Costello, chief economist at the American Trucking Associations, have talked about for years. What it means is shortages on grocery store shelves, at factories and on car lots. And, of course, climbing costs for trucking service.

The driver shortage, in short, has officially become the clog in the economy that we’ve been warned about.

The good news, for shippers and ultimately end consumers, is that the right technologies are arriving at the right time to address these capacity issues and help keep the economy moving. We’re already seeing a bifurcation developing in the market, in which some shippers and logistics providers are realizing the need to adopt digital solutions, and others are simply throwing dollars at the problem, hoping that somehow fixes things.

Yet, as always, personnel will look for ever-greener pastures.

Of course, there’s still so much uncertainty in the market. Will a shift in consumption from goods to services help alleviate some of these supply and demand pressures? Maybe. But that’s not going to make capacity any easier to find, and it does nothing to address the lessons we’ve learned in this current capacity crisis.

Tomorrow’s solutions are needed today — they’re needed now. COVID-19 has been referred to as the “great accelerator.” That’s never been truer than it is for the driver shortage and trucking capacity at large. It’s incumbent upon logistics providers to develop and implement the right tools to address these wide-scale issues in the freight industry.

The current capacity crunch or crisis — whichever terminology you prefer — isn’t going to simply cycle out. It’s here to stay. The only solution is finding new tools to answer the call.

Christopher Thornycroft is the senior vice president of carrier operations for Redwood Logistics, a logistics platform company headquartered in Chicago.