In Mexico, a truck capacity crunch could be on the way, while in the U.S., the trucking industry has steadily moved away from the same problem. However, in Mexico, unlike the U.S., carrier fleets are not worried about a driver shortage.
In Mexico, the trucking industry is facing a cross-border exchange rate hike that is pushing the cost of equipment upward, which could have a negative effect on capacity, trucking executives who spoke at the JOC Inland Distribution Conference in Memphis, Tenn. said, according to the Journal of Commerce (JOC). Since 2015 began, the Mexican peso has been falling behind the U.S. dollar, which is making operations less affordable for medium- and small-sized carrier fleets, putting some out of business. The rising cost of simply staying afloat is tightening capacity in Mexico due to the dollar's increasing strength against the peso.
"The rising cost of simply staying afloat is tightening capacity."
The dollar rising value versus the peso comes as the U.S. economy continues to make gains – something which, a year ago, had carrier fleets worried they wouldn't be able to keep up. The fast expanding economy 12 months ago was cause for concern in an industry that wasn't sure it could keep the same pace. However, for now, capacity has reached a sort of calm, the JOC reported. While equipment affordability in Mexico is declining, in the U.S., trucks and other supplies aren't hard to come by.
"We haven't had trouble getting equipment," Candace Holowicki, director of global transportation and logistics at industrial manufacturer TriMas Corp, said at the same Memphis conference.
Mexico, unlike U.S., not facing a driver shortage
However, while U.S. carrier fleets are, for now, enjoying a bit of calm concerning truck capacity, the driver shortage they still face is encroaching on crisis mode. Turnover in the industry remains high, and rising freight volumes and regulation are pressuring the industry in regard to workforce. Carrier fleets need more drivers desperately, but finding enough skilled, qualified individuals to do the job is difficult.
"The driver shortage which we now estimate to be between 35,000 to 40,000 drivers is getting more pervasive in the truckload sector," Bob Costello, chief economist of the American Trucking Associations, said in a statement. "Due to growing freight volumes, regulatory pressures and normal attrition, we expect the problem to get worse in the near term as the industry works to find solutions to the shortage."
Drivers are required to meet strict standards in the U.S. that make it difficult for carrier fleets to hire enough to keep up with turnover and maintain an adequate workforce. In Mexico, though, such stringencies don't exist, meaning that while equipment is short there, drivers are abundant. And where there are regulations, relaxed enforcement and occasional corruption makes it easy to skirt these laws. For example, Miguel Gomez, CEO of Fletes Mexico Carga Express, explained that in Mexico carrier fleets do not use log books.
Despite tight capacity and driver shortages, the value of freight carried by trucks between the U.S. and Mexico rose in July.Truck freight value between U.S., Mexico increases year-over-year in July
Despite capacity issues and driver shortages, truck freight between Mexico and the U.S. rose year-over-year in July, the last month that such data was available, according to the U.S. Department of Transportation. While overall, the value of freight between the two countries decreased, that of truck cargo – as well as air – increased. For truck freight, the growth was 4.7 percent from July 2014 to 2015. In all, trucks carried 70.6 percent – $45.5 billion – back-and-forth between the U.S. and Mexico.