You have found the perfect product, at the right price, and you are ready to place your order. At checkout, you learn that you have to wait six to ten business days for the delivery of your item. Unfortunately, this issue is common for the American consumer as our transportation and logistics industry is plagued with driver shortages. Every purchaser from small business owners to large corporations to the individual consumer is finding themselves paying for shipping costs.

A report by the American Trucking Association (ATA) revealed that the shortage of drivers is only expected to grow. By the year 2026, the shortage of drivers is expected to be 174,000.

Drivers Are Hard to Find

Cruising on the open road. Being alone with your thoughts. Working by yourself. The trucking industry has a series of draws that do attract good workers. According to a study conducted by the American Trucking Association, the median salary for a truck driver is increasing year-over-year. The 2018 median salary for a truck driver was $53,000 which was a $7,000 boost from 2017. Companies are offering signing bonuses, on the job training, and benefits to attract truck drivers.

Even with these incentives, the shortage is getting worse. There are several factors which contribute to this:

• Working in the trucking industry is difficult. Drivers spend extended periods of time away from families, drive long hours, and often are part of understaffed teams.
• Timelines for deliveries are stricter than ever as regulations for commerce get more stringent throughout the United States.
• Unemployment rates across the country are down. This increases consumer spending as they become more positive toward their spending futures.
• More drivers are getting close to retirement than in the past. Numbers that used to rest around 10% of drivers nearing retirement are now at around 25% of the workforce.
• Attracting truck drivers to the industry has been difficult in the past few decades because of a push toward higher education for young adults.
• The churn rate of drivers is high, which means those entering the field are not fully prepared for a life in this career.
• Becoming a truck driver takes time for training and trucking school costs can be in the thousands. For many, it is easier to get into manufacturing or a retail environment.

The Government Is Trying to Improve The Shortage

As of 2018, the shortage of truck drivers is around 63,000 drivers. The median age for a truck driver is forty-nine years old, which puts pressure on the industry for the future. This directly translates into higher costs for consumers. There is no quick way to engage truck drivers in the business and draw them into the field. This means as a consumer, you will be paying for these increased freight costs in your product price.

The United States Department of Transportation is working to enact industry regulations to encourage better workers to join the industry. The New York Times reported the Trump administration has put aside several regulations (like speed limit software and sleep apnea screenings). Women and minorities are encouraged to join the industry, as 94 percet of current drivers are men and many of them are white males. There is also a potential program in the works to attract potential drivers that have military training. Younger drivers, under 21, with military experience may be allowed to make interstate deliveries as a result of this regulation.

Costs Are Increasing to Make Deliveries

Specific consumer products require delivery immediately. Whether it is a food item that cannot be stored on a truck or a product the consumer demands the next day, consumers often need products right away. The consumer is shouldering some of the burden of cost because of delivery timelines.

Consider the dairy industry for example. The dairy business has large peaks of business and this business requires immediate shipment, no matter the cost. For instance, the majority of butter is sold during the holiday season. The dairy industry will demand less shipments of butter throughout the year but in the months of November and December they are more willing to pay for the cost of on-time shipment to stores. Because of the nature of the product, over 40 percent of dairy deliveries must occur on the same day or the next day. All of these factors increase the cost of the product. When you need a driver in a time where there are not enough, you must be willing to pay a premium.

Expect Shipping Costs to Go Up for the Future

Brian Fielkow, the president of Jetco Delivery a multi-million-dollar trucking and logistics company, puts it clearly, “Shipping costs everywhere are going up.” Higher salaries for workers do lead to increased freight costs. Take Amazon as an example. They reported that for the first quarter of 2018, their shipping costs increased 38% (while sales went up 18% in contrast). In the year 2017, they increased their Prime membership prices from $99 a year to $119 a year. In the United States, Prime members get free 2-day shipping on millions of products but Amazon is passing along increase freight costs to purchasers.

“Free Shipping” Is Not Free

Companies offer “free shipping” to their customers but the costs of shipping are added into the supply chain at some point. Whether it is built in to your final product price or the manufacturer is absorbing shipping costs, someone along the line is paying for your “free shipping.” Freight carriers are forced to set higher rates for delivery and this translates to more expensive consumer products, some companies report increases of up to 20 percent. Whether it is your can of soup costing more than $1 or your car costing a few hundred dollars more, the average consumer is paying for these surgers.

Final Takeaway: A Booming Economy Will Increase Your Costs

The average American consumer should expect the booming economy to provide a number of benefits but one downside is the increased cost of freight. Increased manufacturing keeps unemployment low and more money in the bank increases consumer spending. Yet, the trucking industry cannot keep up with the demand for drivers. It takes time to attract workers, train them, and make changes to the logistics industry.