Trucking Costs Too Much and Getting Worse

trucking bottlenecks

Truck drivers move almost every good in the American economy, from food for our cupboards to gas for our vehicles to finished goods for retailers’ shelves. Nearly every goods-based industry relies on trucking, likely at several points along its supply chain. DSW, an Arizona-based trucking company, estimates that trucking adds $600 billion to the U.S. economy every year and employs more than 800,000 people.

At the same time, trucking is ripe for disruption. As Americans purchase more and more goods online, more and more items have to zigzag from warehouse to warehouse to doorstep, rather than simply from warehouse to store shelf. Volumes are rising every year.

Yet the cost of trucking is dependent on the cost of fuel, which has been stable for several years but could become volatile with little warning. And truck labor is getting more and more expensive amid a labor shortage — even as experts predict that truck drivers are likely to be the first operators eliminated by autonomous vehicles.

But the most pressing problem for the trucking industry isn’t e-commerce or self-driving trucks. It’s traffic congestion.

According to a 2018 report from the American Transportation Research Institute, trucks in the U.S. experienced about 1.2 billion hours of delay on the nation’s freeways in 2016.

“This delay equates to more than $74.5 billion in added operational costs or an average congestion cost per truck of $6,478,” the report said.

What causes trucking bottlenecks?

The U.S. Department of Transportation refers to points where trucking operations are often slowed down as “bottlenecks.” These occur due to badly timed traffic signals at intersections, congestion on freeway interchanges, or many other combinations of factors.

Of the top 10 bottleneck locations in the U.S., the worst is at the intersection of I-95 and Route 4 in Fort Lee, New Jersey, located just across the Hudson River from Manhattan. The second and third worst trucking bottleneck locations were in Atlanta. An interchange in Los Angeles took fourth place, and an interchange in Houston took fifth.

According to the ATRI, truck speeds fell by about nine percent year over year in the top 10 worst bottleneck locations between 2018 and 2019.

What impact do bottlenecks have on the economy?

The ATRI estimates that the trucking industry experienced 1.2 billion hours of delay in 2016. That is roughly equivalent to more than 425,000 commercial truck drivers “sitting idle for an entire working year,” researchers wrote in the 2018 report.

The ATRI believes that congestion cost the $600 billion trucking industry about $74.5 billion.

Trucking bottlenecks cost shippers, too. A UPS spokesperson estimated that if each vehicle spent just five minutes a day idle, it would cost the company $114 million per year.

How can we fix bottlenecks?

The Federal Highway Administration has offered a few remedies for the trucking industry. For instance, the shoulders of certain freeways could be turned into traffic lanes at peak hours. On-ramps could be metered, at peak hours or all the time. Traffic signals on arterial roads could be optimized to maximize traffic efficiency.

Additionally, some trucking advocates have advocated “zippering,” self-policed or externally policed metering that keeps vehicles from entering freeways too quickly.

Some of these strategies are already in play in the U.S. California readers will recognize “zippering” in the “one car per green” lights that control access to some freeways, for instance. But all of these fixes cost money — and the federal government tends to move slowly when it comes to infrastructure spending.

In the meantime, many freight companies design operational redundancies to ensure they can meet customer needs no matter what congestion data looks like.

Analysis methods

The Federal Highway Administration estimates that bottlenecks are responsible for about 40 percent of the time trucks spend in traffic congestion. The remaining 60 percent is caused by “non-recurring congestion” — slowdowns caused by unforeseen occurrences like crashes, breakdowns, and weather events, as well as delays caused by construction zones.

Unfortunately, there isn’t much that shippers or third-party shipping carriers can do about the latter. With modern GPS technology, truckers should have no trouble finding out whether there are quicker alternate routes around non-recurring congestion. But there’s little way to plan for delays like that in advance.

To understand the impact of bottlenecks, however, the FHA offers a detailed explanation of how to conduct a “truck freight bottleneck analysis.” To conduct this kind of analysis, carriers need data: travel-time data, traffic volume data, roadway inventory data, commodity data and truck restriction data. Then, they can calculate typical delays, make evidence-based predictions, and even measure the impact delays have on their bottom line.

Trucking operations are already expensive. Congestion makes it worse. While drivers are stuck in traffic, they’re earning wages and burning fuel, but goods aren’t getting any closer to their destinations.

Shippers don’t have much control over how quickly traffic moves. But the better supply chain leaders understand industry-wide challenges, the better they can design their processes — and the more quickly they can adapt when big changes ripple from one link in the supply chain to the rest.

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.

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