After a very rough 1st Quarter to start off 2021 in the LTL realm due to extreme weather scenarios, coupled with the already tight capacity issues due to Covid 19 – things seemed to settle down somewhat in April. However, since then Recon has seen many carriers halting service and executing embargoes in various lanes in May again.
Given the weather issues are behind us for now – this must be from another wave of freight coming in from ports, equipment being tied up for weeks at retail and eCommerce DC’s, and the ever-continuing labor shortage hitting both drivers and dock workers specifically.
While driver sign-on bonuses are quickly becoming a normalcy in today’s recruiting environment – Recon has learned of dock-workers getting the same hiring incentives with some carriers, which is likely a first in the industry. The labor shortage is very real indeed!
Recon learned through a valued national LTL carrier partner the rising cost in raw materials and other supplies that it takes to operate an asset-based LTL carrier:
- Steel up 72%. A standard tractor is 20% steel. Other steel parts have seen prices go up – wheel assemblies, alternators, radiators, etc.
- Resin prices have gone up due to supply constraints. Resin is used in hoods, windshields, and body parts.
- Computer chip shortages are being driven by the risen consumption of laptops, game consoles, and other electronics that have sold very well during the pandemic. This also affects the chips that go into these tractors – and they are up 25%.
- Foam for tractors has increased in price by 20%.
- Brake components and bearings are up 20%.
- Tires are up 10% and will continue to rise and petroleum prices go up as well.
- Additionally – carriers use plywood as dunnage to protect freight that’s put on load bars or stacked – with the price of plywood up 252%.
Carrier Hiring Updates:
- Saia: Reported recently they are seeking 500 drivers and 300 dock personnel.
- ODFL: Hiring 800 drivers.
- Yellow: Hired 2000 workers in Q1 2021.
- Estes: Hired 500 drivers in Q1 2021, and looking to add another 1000 in the next 5 months.