Regardless of market conditions at any given time, there are always a few constants in play. That especially rings true in the trucking sector.
Think about it. The “constants” I am referring to include the usual staples such as the driver shortage, or lack of qualified drivers, rate pressures on both sides between shippers, carriers, and 3PL brokerages, and related capacity spikes, whether they trend up or down.
Another issue, which is always there, or constant, if you will, has to do with congestion. And guess what? It has always been a factor in the past, in the present, and, unfortunately, in the future, too. What’s more, congestion continues to wreak havoc on trucking’s operational costs, though that should really not come as a big surprise.
That was made very clear in research issued today by the American Transportation Research Institute (ATRI), the research arm of the American Trucking Associations (ATA) in its most recent “Cost of Congestion” analysis.
The key metric in this analysis is pretty jarring, when it comes to truly gauging the (negative) impact of congestion of the United States National Highway System, with ATRI reporting that congestion added roughly $74.5 billion in operational costs to the trucking industry in 2016, the most recent year for which data is available.
This figure marks a 0.5% annual increase over 2015, with ATRI explaining that this dollar figure is based on various data sources, which includes its proprietary GPS database that calculates delay on the National Highway System, a figure it said represents almost 1.2 billion hours in lost productivity, or being stuck in traffic really. What’s more, ATRI noted that that amount of lost productivity is the equivalent of 425,533 commercial truck drivers off the road for an entire year.
But those are not the only convincing metrics offered up by ATRI in its report, consider these as well:
· congestion costs are increasingly concentrated on a relatively small proportion of the NHS at 86.7% of total nationwide congestion costs occurred on just 17.2% of NHS segment miles;
· these NHS segments are characterized as having above-average costs in excess of $155,000 per mile during 2016, and are predominantly located in densely populated urban areas;
· traffic congestion tended to be most severe in urban areas, with more than 91% of the total congestion costs generating from metropolitan areas; and
· the top 10 states experienced costs of more than $2.4 billion each, paced by Texas and Florida with more $5.5 billion respectively, with the top ten states combined account for 51.8% national congestion costs
In a statement accompanying the report, Benjamin J. McLean, Ruan Transportation Management Systems Chief Executive Officer, laid out the state of U.S. congestion in stark terms: "Perhaps no other issue has as great an impact on this nation's supply chain as traffic congestion. In the face of growing and pervasive congestion, not only does the trucking industry lose billions annually but ultimately the consumer pays the price through higher prices on the shelf. Doing nothing to address the state of our nation's infrastructure will create a significant impediment to the growth of our economy."
And given the urgency on things like last-mile logistics and same- and next-day delivery, this makes a difficult situation all the more challenging. Fixing our national infrastructure issues to help alleviate congestion would obviously go a long way towards making a bad situation better. But, as is the case with separate challenges, there remains a long way to go. That is something we are continuously reminded of whenever we sit in traffic, which happens far more often than it should.