By 2026, the U.S. will be short by 175,000 truck drivers. But, according to New York-based startup Transfix CEO and co-founder Drew McElroy, the trucking industry is suffering from more than a driver shortage.
More than 3 billion tons of hazardous materials and other good are shipped in the U.S. every year. But, with technology not being widely implemented and billions of miles being drive empty every year, McElroy says the trucking industry is being incredibly wasteful and causing delayed orders and rising freight rates.
“There may not be enough drivers, but there also is certainly not enough efficiency of those drivers’ time,” said McElroy.
Transfix was founded in 2013 and, in the last five years, has raised up to $80 million in funding. Its funds make the trucking company one of the most robust supply chain management startups in business.
McElroy says that billions of miles are driven by truck drivers every year, but without purpose. Many drivers will spend hours at a time at shipping docks.
What’s more, the traditional methods of brokering freight via email, fax, and phone are inefficient compared to modern techniques. It’s these issues that make the driver shortage that much more stressful for the trucking industry.
McElroy has identified three factors aside from the limited number of truck drivers that are causing issues in the trucking industry. These factors include:
- Truck drivers often drive empty trailers.
- More than 50% of truck drivers spend two to three hours at shipper docks when they arrive.
- It takes hours to broker a shipment between a shipper and truck driver.
Up to 18% of all vehicles sold in the U.S. are pickup trucks and they’re often used to carry heavy loads such as work equipment. The same is true of trucks and trailers.
Yet, 20% of miles driven by trucking companies are driven with empty trailers. The reason for this is because truckers will often have to wait for a job to open near them after dropping off a shipment.
McElroy says this problem could be solved by notifying drivers of new jobs at their intended destination before they arrive to drop off their shipment.
Almost 63% of truck drivers also say they wait three hours or more at a time at the shipping dock because of the industry standard. It’s expected for drivers to wait while their trucks are loaded or unloaded and they’re not paid for that time.
This problem can be solved by implementing more efficient policies, McElroy says. Shippers can save money by not keeping drivers waiting.
“We can go to shippers and say, ‘Listen, if you put on an extra eight hourly workers at the cost of $1,000 per week, we just saved you $20,000 in trucking detention,'” said McElroy.
The latest technology would also help to make the broker process much faster.
For instance, road construction is a common cause for highway traffic despite horizontal directional drilling being the most efficient method for highway bores. A GPS-enabled tracking process would let a broker see a driver is still en route to the pick-up or delivery destination rather than calling periodically to ask.
“If you can get more intelligent about execution, you create a situation that’s a win-win for everybody,” said McElroy. “You create value simply by eliminating waste.”
