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.
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
Census data showed that overall retail sales in October were up 0.4% seasonally adjusted month over month and up 2.8% unadjusted year over year. That compared with increases of 0.8% month over month and 2% year over year in September.
October’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were unchanged seasonally adjusted month over month but up 5.4% unadjusted year over year.
Core sales were up 3.5% year over year for the first 10 months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023. NRF is forecasting that 2024 holiday sales during November and December will also increase between 2.5% and 3.5% over the same time last year.
“October’s pickup in retail sales shows a healthy pace of spending as many consumers got an early start on holiday shopping,” NRF Chief Economist Jack Kleinhenz said in a release. “October sales were a good early step forward into the holiday shopping season, which is now fully underway. Falling energy prices have likely provided extra dollars for household spending on retail merchandise.”
Despite that positive trend, market watchers cautioned that retailers still need to offer competitive value propositions and customer experience in order to succeed in the holiday season. “The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under invest in their stores,” Nikki Baird, VP of strategy & product at Aptos, a solutions provider of unified retail technology based out of Alpharetta, Georgia, said in a statement. “They need to make investments in labor, customer experience tech, and digital transformation. It has been too easy to kick the can down the road until you suddenly realize there’s no road left.”
A similar message came from Chip West, a retail and consumer behavior expert at the marketing, packaging, print and supply chain solutions provider RRD. “October’s increase proved to be slightly better than projections and was likely boosted by lower fuel prices. As inflation slowed for a number of months, prices in several categories have stabilized, with some even showing declines, offering further relief to consumers,” West said. “The data also looks to be a positive sign as we kick off the holiday shopping season. Promotions and discounts will play a prominent role in holiday shopping behavior as they are key influencers in consumer’s purchasing decisions.”
That result came from the company’s “GEP Global Supply Chain Volatility Index,” an indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses. The October index number was -0.39, which was up only slightly from its level of -0.43 in September.
Researchers found a steep rise in slack across North American supply chains due to declining factory activity in the U.S. In fact, purchasing managers at U.S. manufacturers made their strongest cutbacks to buying volumes in nearly a year and a half, indicating that factories in the world's largest economy are preparing for lower production volumes, GEP said.
Elsewhere, suppliers feeding Asia also reported spare capacity in October, albeit to a lesser degree than seen in Western markets. Europe's industrial plight remained a key feature of the data in October, as vendor capacity was significantly underutilized, reflecting a continuation of subdued demand in key manufacturing hubs across the continent.
"We're in a buyers' market. October is the fourth straight month that suppliers worldwide reported spare capacity, with notable contractions in factory demand across North America and Europe, underscoring the challenging outlook for Western manufacturers," Todd Bremer, vice president, GEP, said in a release. "President-elect Trump inherits U.S. manufacturers with plenty of spare capacity while in contrast, China's modest rebound and strong expansion in India demonstrate greater resilience in Asia."
Even as the e-commerce sector overall continues expanding toward a forecasted 41% of all retail sales by 2027, many small to medium e-commerce companies are struggling to find the investment funding they need to increase sales, according to a sector survey from online capital platform Stenn.
Global geopolitical instability and increasing inflation are causing e-commerce firms to face a liquidity crisis, which means companies may not be able to access the funds they need to grow, Stenn’s survey of 500 senior e-commerce leaders found. The research was conducted by Opinion Matters between August 29 and September 5.
Survey findings include:
61.8% of leaders who sought growth capital did so to invest in advanced technologies, such as AI and machine learning, to improve their businesses.
When asked which resources they wished they had more access to, 63.8% of respondents pointed to growth capital.
Women indicated a stronger need for business operations training (51.2%) and financial planning resources (48.8%) compared to men (30.8% and 15.4%).
40% of business owners are seeking external financial advice and mentorship at least once a week to help with business decisions.
Almost half (49.6%) of respondents are proactively forecasting their business activity 6-18 months ahead.
“As e-commerce continues to grow rapidly, driven by increasing online consumer demand and technological innovation, it’s important to remember that capital constraints and access to growth financing remain persistent hurdles for many e-commerce business leaders especially at small and medium-sized businesses,” Noel Hillman, Chief Commercial Officer at Stenn, said in a release. “In this competitive landscape, ensuring liquidity and optimizing supply chain processes are critical to sustaining growth and scaling operations.”
With six keynote and more than 100 educational sessions, CSCMP EDGE 2024 offered a wealth of content. Here are highlights from just some of the presentations.
A great American story
Author and entrepreneur Fawn Weaver closed out the first day of the conference by telling the little-known story of Nathan “Nearest” Green, who was born into slavery, freed after the Civil War, and went on to become the first master distiller for the Jack Daniel’s Whiskey brand. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
She told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest. That story also inspired her to create Uncle Nearest Premium Whiskey.
Weaver discussed the barriers she encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, pointing to a recent project in which the company was able to fast-track a new Uncle Nearest product thanks to close collaboration with its supply chain partners.
A two-pronged business transformation
We may be living in a world full of technology, but strategy and focus remain the top priorities when it comes to managing a business and its supply chains. So says Roberto Isaias, executive vice president and chief supply chain officer for toy manufacturing and entertainment company Mattel.
Isaias emphasized the point during his keynote on day two of EDGE 2024. He described how Mattel transformed itself amid surging demand for Barbie-branded items following the success of the Barbie movie.
That transformation, according to Isaias, came on two fronts: commercially and logistically. Today, Mattel is steadily moving beyond the toy aisle with two films and 13 TV series in production as well as 14 films and 35 shows in development. And as for those supply chain gains? The company has saved millions, increased productivity, and improved profit margins—even amid cost increases and inflation.
A framework for chasing excellence
Most of the time when CEOs present at an industry conference, they like to talk about their companies’ success stories. Not J.B. Hunt’s Shelley Simpson. Speaking at EDGE, the trucking company’s president and CEO led with a story about a time that the company lost a major customer.
According to Simpson, the company had a customer of their dedicated contract business in 2001 that was consistently making late shipments with no lead time. “We were working like crazy to try to satisfy them, and lost their business,” Simpson said.
When the team at J.B. Hunt later met with the customer’s chief supply chain officer and related all they had been doing, the customer responded, “You never shared everything you were doing for us.”
Out of that experience, came J.B. Hunt’s Customer Value Delivery framework. The framework consists of five steps: 1) understand customer needs, 2) deliver expectations, 3) measure results, 4) communicate performance, and 5) anticipate new value.
Next year’s CSCMP EDGE conference on October 5–8 in National Harbor, Md., promises to have a similarly deep lineup of keynote presentations. Register early at www.cscmpedge.org.