Opinion: No Slack in Intermodal Trucking

By Daniel Smith, The Tioga Group

Our image of the truck driver is a man behind the wheel. In recent years, it has become increasingly difficult to keep drivers behind the wheel as customers make drivers wait at shipping and receiving docks or handle freight themselves without compensation. Driver dissatisfaction is aggravating the already serious shortage of qualified drivers.

West Coast intermodal trucking, especially in Southern California, has sometimes seemed isolated from the changes sweeping other parts of the trucking industry. Fierce competition and a seemingly inexhaustible supply of potential drivers kept rates down and allowed for “slack” in the system. For many years intermodal customers have been shielded from the cost impacts of long terminal waits or their own inefficiency. Drivers unwilling to wait unpaid for an extra hour or two at the customer’s dock or marine terminal were shouldered aside by new drivers who wanted the work and were willing to accept the unpaid standby time.

The slack is disappearing as the pool of owner-operators willing to accept low earnings and endure the hardships of intermodal trucking dries up. Intermodal truckers are having a hard time recruiting new owner-operators or replacing those who have left for better earnings and working conditions elsewhere. With the Southern California economy at full employment and major trucking firms hungry for experienced, responsible drivers, every owner-operator has multiple opportunities.

Drayage rates in Southern California and elsewhere on the West Coast are practically the same as in 1990. Business is growing, traffic congestion is increasing, and diesel prices are rising. Absent significant rate increases or major productivity improvements there is no way that owner-operators can increase their earnings or that intermodal trucking firms can attract the new owner-operators they need to handle a booming business. Work stoppages in the Pacific Northwest, past strikes in Southern California, and union organizing efforts should be wake-up calls to the intermodal industry and its customers.

With the slack gone, intermodal customers are going to find that some things they have taken for granted are no longer free. Consider the following issues:

Waiting time in long terminal queues. If customers need a specific box from a marine terminal during a peak period, they will increasingly be asked to pay for the time the driver has to spend in line. Leading intermodal truckers are using Teletrac or other means to determine and document actual waiting times.

Two hours of free time at the dock. In the early 1990s, free time at the dock rose from one hour to two hours as intermodal truckers sought to accommodate less-efficient and less-organized customers. Now there are fewer and fewer drivers willing to accept a “stay-with” load if they are going to spend two hours of unpaid time cooling their heels. Long waiting times are particularly burdensome in intermodal trucking, where shorter lengths of haul are the norm and waiting time may exceed driving time. Shorter standby time allowances and “drop and pick” operations will likely become the norm.

Peak period capacity. As in ocean shipping and airline travel, peak period drayage service is more likely to command a premium. Customers who want to lock in capacity for the fall rush will have to make commitments early or face peak season surcharges.

Waiting for equipment repairs or paperwork. At rail and marine terminals, drivers are usually expected to wait without compensation while any defects in the trailer or chassis they had come for were repaired, and frequently the drivers were expected to hustle the unit over to the shop. Drivers also wait when paperwork was missing or not in order. Those facilities will find that drivers with good communications to their dispatchers will pick up another unit instead and leave the defective or undocumented unit behind. The customer will be told what happened, and the terminal will feel the heat instead of the trucker.

The whole commercial trucking industry is trying to get its drivers out of the loading, unloading, and waiting business and back onto the road. The Truckload Carriers Association is tackling the free time problem, developing a “code of ethics” for shippers and publicizing the names of the worst offenders (11-22, p. 11). Leading truckload carriers are starting to charge detention for trailers, and new OSHA forklift rules will make it harder for drivers to load and unload trucks.

If intermodal drayage ever really was an isolated part of the trucking industry, it is no longer. The supply of drivers is the ultimate limit on drayage capacity. The chronic driver shortage affects carriers both large and small, and one expert has predicted that truckload carriers will have to increase wages 10% as a result. Time spent waiting and unpaid loading or unloading work have been identified as a major factor in driver turnover and exit from the industry. Intermodal carriers must increase driver productivity. Keeping the driver behind the wheel, keeping the customer’s dock performance predictable and keeping the carrier’s service reliable are all necessary steps.

The “slack” in intermodal trucking was never really free, and payment is coming due.