August 3, 2021

Driver Shortages, Driverless Vehicles, and Other Supply Chain Curiosities

This article first appeared in Logistics Viewpoints 2021 issue. Author: Byron Davis, Senior Director, Client Services, Open Sky Group

Watching the Horizon without Taking Your Eyes Off the Road

“If you thought it was difficult to find good drivers before the 2020 pandemic, try finding drivers of any caliber afterward. Driver shortages have become even more of a reality in the supply chain industry for a number of reasons, chief among them being the sharp rise in demand…As driver pay increases, so does the incidence of drivers jumping ship, switching companies for the next best payday… Something’s got to give. Could the obvious solution be that curious notion of driverless vehicles?”

The Curious Case of the Headless Driver

“Make no mistake, driverless vehicles are here to stay, driver shortage or not. Currently, most driverless opportunities are limited to secure private zones or closed environments, such as warehouses, campus environments, or last-mile runs from depot to front door. But the industry is watching as the technology opens new opportunities for safety, savings, and speed long-haul, raising curiosity on the strength of a compelling business case… The cost of the technology is still prohibitive for most companies. A January 2021 DOT report suggests that “only 48% of trucking firms would be able to buy the technology in the decade after it becomes available.” Approval of long-haul driverless technology isn’t projected to settle until around 2031.”

Curiouser and Curiouser

“In a word, it’s data. Capturing it, cleaning it, screening it, and analyzing it to determine better routes, better prices, and better sources are foundational to smart logistics operations. State-of-the-art warehouse, labor, and transportation management systems are designed to facilitate the kind of real-time data analysis necessary for spotting cost-saving, productivity-enhancing, margin-building opportunities. In fact, using modern AI and machine learning tools to track market movements, you can perfect your game as you also improve your ability to predict future market fluctuations and plan proactively… Good data will help you track valuable decision factors such as best per-mile rates, conditional charges, field charges, and other variables to ensure your best bang for the buck. You can also build metrics to support your hiring practices, making sure you’re paying drivers what they’re worth to inhibit churn, enhance acceptance rates or stem the tide of driver turnover.”

Keep Your Eyes on the Road

There are many ways existing, modern technology can help you effectively manage changing market conditions, such as driver shortages, without lurching prematurely into the future. Certainly, keep an eye on the horizon. But also, do yourself a favor by getting curious about what’s really driving your business. Know what’s happening, gauge its impact on your business, carefully examine where to make adjustments, and get better at it over time. By analyzing data, monitoring KPIs, and making decisions based on facts, you can better predict the market and plan for better business outcomes.