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Trucking prices climbed 9.4% in June, the most in a decade, and demand should keep pushing the numbers higher. That's a system exacerbated by a growing shortage of truck drivers and an increasing workload on truck drivers caused by an increase in digital orders, which causes trucks to be filled with single items that have to be brought to dozens of homes.
And while automation may someday help this problem, that's not a short-term answer. Instead, companies will have to work to maximize efficiency and manage their supply chains to get the most production possible.
Nick Sciple and Dan Kline tackle the topic in this segment of Industry Focus. A full transcript follows the video.
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This video was recorded on Oct. 18, 2018.
Nick Sciple: According to the Labor Department, long-distance trucking costs advanced 9.4% in June from a year earlier, which is the largest increase we've seen in nearly a decade. That's only going to get worse. Demand for trucking is only rising because of e-commerce and all those sorts of things that we talk about every day here at The Motley Fool.
Dan Kline: We also went from a trucking system where a full truckload went to a Walmart or a supermarket or whatever big store destination. Now, there are literally full trucks full of individual packages driving around. Obviously, it takes less time to bring a full truckload of something somewhere than it does to bring multiple full truckloads, sort that into individual packages, and then go deliver those individual packages to people. We've created not only added demand, but the same amount of goods now requires more handling.
Sciple: Exactly. Like you said, taking a truck to 50 different homes is different than taking it to one individual household. One other thing to pull the thread here is that this is a problem that's not going to go away anytime soon. There's a lot of promise out here about driverless vehicles, maybe driverless trucking filling this gap. But this is something that may be five to 10 years away. The example that I used with you when we were preparing for the show is that for a long time, we've had autopilots in airplanes and large trans-ocean vessels. We still have to have people in those to make sure that everything's running smoothly. There's limitations in our driverless technology today. For example, LIDAR systems are very important for tracking technology for trucking. However, they struggle in adverse weather conditions, particularly the rain. If you're going to come up with a logistical solution that is going to address the entire U.S. retail landscape, you have to be able to work when it's raining.