Conventional wisdom says that the United States is suffering from a massive truck driver shortage. While it’s true that truck drivers are a scarce resource, it’s also the case that truck drivers’ time is frequently not respected and is significantly underutilized. The biggest culprit? Long delays at shippers’ loading docks.
David Correll, former lead author of the State of Supply Chain Sustainability report, was a research scientist at MIT’s Center for Transportation & Logistics from many years. He now works for the U.S. Department of Transportation.
A truck driver who goes by the handle Long-Haul Paul once told me that the worst thing about driving a truck is that “the job can make a liar of you when you didn’t want to lie.” He explained to me that, like all of us, truck drivers have places to go and promises to keep between delivering their loads. The truck driver might promise to his daughter to be home in one week’s time for her birthday. But then, as Paul put it to me, “some knucklehead has got two pallets of cheddar that you’re waiting on, and he’s still in Kenosha…” “You make promises,” Paul explained, “and for whatever reasons there’s a systemic failure that prevents you from keeping your promise. That’s hard.”
At the MIT FreightLab, we recently launched the Driver Initiative to look at utilization and quality of life of America’s truck drivers. We’ve interviewed dozens of truck drivers like Long Haul Paul, gone on ride-alongs with drivers as they made their appointed rounds, and systematically reviewed the electronic working logs of approximately 4,000 truck drivers from multiple companies over the years 2016 to 2020. What strikes us first? How much of American truck drivers’ valuable driver time appears to be squandered every day by delays during pickup and delivery at shipper facilities.
“You could be there for six, eight, ten hours. I was at one customer for as many as 18 hours,” a 22-year veteran of the industry named Mark told me. Another driver named Desiree confirmed the problem to me from her own experience too: “Recently, in one week, I had two places I went that kept me 10 hours. I have unloaded freight. I have loaded freight. I've loaded these trailers. I know how long it takes. It doesn't take 10 hours.”
Our own research suggests that shippers themselves are not blind to this problem. To get another perspective on this issue, the FreightLab convened a small group of logistics and shipping managers to learn about the shippers’ perspective on driver detention. First, we surveyed the group regarding the detention experiences that they have observed at their own shipping and receiving facilities. Those results are shown below in Figure 1. The shippers corroborated what the drivers were telling us: Long delays can, and do, happen regularly. In Figure 1, we’ve fit normal distribution curves to the time estimates provided by the shippers we surveyed. In other words, the curves show the roughly estimated probability of a pickup or delivery taking a certain amount of time based on the information we received from the focus group. “Live loads” (pickups or deliveries where the truck driver must wait on the premises for the truck or trailer to be unpacked or packed) are by far the worst offenders, with an average detention duration of 2 to 2.5 hours, (the top peak of the orange and black curves). Drop-and-hook style loads (pickups or deliveries where the driver can drop off or pick up the trailer in the yard and leave) are much faster and are typically completed in 30 to 45 minutes (the peaks of the red and blue curves). Notice the distribution around the mean for “live load destination;” unlike the distribution curve for drop and hook deliveries, the curve for live loads are much longer and flatter, meaning that the time is far less predictable. Among the shipper networks we surveyed, live load destination appointments are almost equally likely to last two, three, or four hours! Can any system be truly optimized with that kind of variability? Like all of us, every driver has somewhere to be next—be it a personal or professional obligation. Every “trucker’s keeper” (such as a shipper, retailer, third-party logistics provider, or distributor) that passes along their own problems or inefficiencies to the driver also passes them along to the driver’s family and the driver’s other customers too.
The top right-hand chart in Figure 1 shows the longest delay that the shippers recalled seeing recently in their own network with each circle representing one respondent’s answer. By the shippers’ own estimates, live load destination deliveries have lasted at the maximum 10, 20, and even 30 hours. Although our focus group for this survey was relatively small, representative estimates corroborate the horror stories the drivers shared. America’s valuable and scarce truck driver resource is far from optimized in today’s supply chains.
The consequences of lost time
An astute reader might ask, “How can this be?” Headlines abound in the United States—and other countries too—that there is a massive shortage of truck drivers. That is, that there are too few truck drivers working to carry the loads generated by our modern economy. But if that’s the case, shouldn’t the drivers that we do have be working all-out to cover all that demand for freight transportation?
This wasn’t what we found when we peered into truck drivers’ electronic work logs. Figure 2 summarizes the electronic work logs of approximately 4,000 long-haul truck drivers collected intermittently over four years into “box-and-whisker” plots. Within the colored boxes are the middle 50% of all observations of driving hours per calendar day, organized by the days of the week. Within the whiskers extending up and down from those boxes are the highest 25% of daily driving hours and the lowest 25%, respectively. Sets A1 and A2 are from one mid-sized trucking company and represent 2,216 drivers. Set B is from one very large national carrier and represents 1,530 drivers. All in all, Figure 2 summarizes approximately 310,000 actual truck driver work days. In dashed lines across the top of Figure 2 is the federally set driving maximum for freight-carrying truck drivers of 11 hours per day.
As my students and I at the MIT Center for Transportation and Logistics analyzed this data, we found that long-haul truck drivers across these companies and across four years, all drove on average about 6.5 to 7 hours per calendar day. Truck drivers in the United States are legally allowed to drive for 11 hours per day. This unfortunately implies that 4 to 4.5 hours of driving time, or roughly 35% of America’s daily trucking capacity is left on the table every day. Even in a time of perceived shortage.
The first consequence then of lengthy and unpredictable delays at shipping and receiving appears to be severe underutilization of the valuable driver resource. Where do the 4 to 4.5 missing hours of daily freight carrying capacity go every day? It appears that, at least some of the time, that valuable capacity currently withers away at shippers’ own facilities as truck drivers wait for hours on end to be called up for loading and unloading. Another way then of seeing the challenge of the perceived driver shortage is not as a problem of headcount, but rather as a chronic crisis of underutilization.
What is to be done?
This problem is not unsolvable. Supply chains are, after all, run by and for human beings. And we human beings are remarkable in our consistent ability to solve the problems that we are effectively incented to solve. Shippers should know that incentives to improve their throughput times are coming. Concurrent with our research efforts, entrepreneurial solutions have emerged in this space. Information aggregators like Dock 411 and True Load Time collect truck driver experiences and wait times at different shipping locations across the United States. Some digital freight brokerages have also been offering truck drivers the opportunity to rate the shippers that they service—similar to Uber drivers’ ratings of customers. Presumably, shippers whose ratings lag in these aggregated systems will face lower tender acceptance and higher rates from carriers. It is also possible that the federal government could get involved in codifying such incentives too. As I recently testified before Congress in October 2022, the government could award supply chain health letter grades to American shipping facilities, similar to the board of health sanitation letter grades that are posted outside restaurants. Lower letter grades might deter carriers away from substandard performers, and thereby apply effective market pressure for shippers to make improvements.
Luckily for shippers, our data suggests that such improvements are within reach. In fact, they already happen every day. Across multiple data sets representing many thousands of delivered loads, we’ve observed a curious but consistent result. The time that a truck is made to wait for loading and unloading is consistently predicted by its time of arrival and is inversely related to the number of trucks arriving at the same time. Put differently, it’s the exact opposite problem that you or I might experience trying to get a drink at a busy bar. In freight appointments, when everyone wants a dock door, everyone gets a dock door. This tends to happen in the mornings. Later arrivals, particularly those after typical “first shift” work hours at the distribution center or warehouse represent the long trail of trucks that are more often made to wait for extended periods of time. The problem then is not a hardware problem. It’s a software problem. Our existing facilities can go faster. We see it every day. But we only staff and manage to do such quick loading and unloading during the most convenient arrival times. For shippers, this means that adjusting staffing and warehouse policy to accommodate later arrivals—including those that come after the scheduled appointment time—could go a long way towards fixing the problem of driver detention and chronic underutilization.
Dignity matters
But it's the human factor of this problem that troubles me the most and actually keeps me up at night. Have you ever been in an airport when a flight delay is announced? In these cases, the business travelers and vacationers are usually given a new boarding time and allowed to wait in the comfort of the terminal with full access to restaurants, shops, and professionally cleaned bathrooms for a few brief hours until they are re-planed. During the delays that truck drivers in the U.S. endure, even basic human necessities are not always available. During those 6-, 8-, or even 10-hour freight delays that plague modern American supply chains, the truck drivers don’t even know when they might get called up. They are too often expected to sit idly in their trucks, lying in wait for extended periods to pounce when called upon for an available door. Sadly, drivers also report that many shippers expect them to endure these long waits without even access to a bathroom. Said one driver, “We're there for hours on end, but they expect us to use a bottle in the truck or a bucket or a Porta John that hasn't been cleaned in two weeks. … The health department should be notified.”
As I’ve researched this topic, I’ve been saddened to discover how often in contemporary American supply chains we mistreat our drivers in this way. By one driver’s estimate, 40% of the facilities he visits regularly detain drivers for extended periods of time and/or do not offer basic bathroom amenities to the truck drivers who service them. Of course, I want American supply chains to be as time-efficient and cost-competitive as they can be. And I hope that our research lab’s work will play a role in helping to achieve these goals. But I think we should also hold ourselves to a more fundamental and humanist standard too: Upholding the basic conditions of human decency and dignity for all the many people who make supply chains function, truck drivers included.
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
That clash has come as retailers have been hustling to adjust to pandemic swings like a renewed focus on e-commerce, then swiftly reimagining store experiences as foot traffic returned. But even as the dust settles from those changes, retailers are now facing renewed questions about how best to define their omnichannel strategy in a world where customers have increasing power and information.
The answer may come from a five-part strategy using integrated components to fortify omnichannel retail, EY said. The approach can unlock value and customer trust through great experiences, but only when implemented cohesively, not individually, EY warns.
The steps include:
1. Functional integration: Is your operating model and data infrastructure siloed between e-commerce and physical stores, or have you developed a cohesive unit centered around delivering seamless customer experience?
2. Customer insights: With consumer centricity at the heart of operations, are you analyzing all touch points to build a holistic view of preferences, behaviors, and buying patterns?
3. Next-generation inventory: Given the right customer insights, how are you utilizing advanced analytics to ensure inventory is optimized to meet demand precisely where and when it’s needed?
4. Distribution partnerships: Having ensured your customers find what they want where they want it, how are your distribution strategies adapting to deliver these choices to them swiftly and efficiently?
5. Real estate strategy: How is your real estate strategy interconnected with insights, inventory and distribution to enhance experience and maximize your footprint?
When approached cohesively, these efforts all build toward one overarching differentiator for retailers: a better customer experience that reaches from brand engagement and order placement through delivery and return, the EY study said. Amid continued volatility and an economy driven by complex customer demands, the retailers best set up to win are those that are striving to gain real-time visibility into stock levels, offer flexible fulfillment options and modernize merchandising through personalized and dynamic customer experiences.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.