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YRC chief James Welch sees a good economy but also strains on trucking

“This economic expansion still has some legs,” YRC Worldwide chief executive James Welch said in a keynote address at the JOC Group’s Inland Distribution Conference.
“This economic expansion still has some legs,” YRC Worldwide chief executive James Welch said in a keynote address at the JOC Group’s Inland Distribution Conference. YRC Worldwide

The trucking industry badly needs drivers, new equipment, more technology, less regulation and a fuel tax, James Welch, chief executive of YRC Worldwide Inc., said Thursday in Kansas City.

Welch listed the industry’s challenges but also said freight movers — whether they drive trucks, fly planes or captain ships — should benefit from an improving U.S. economy.

“This economic expansion still has some legs,” he said in a keynote address at the JOC Group’s Inland Distribution Conference.

More business, however, means added strains on the network that delivers supplies and goods at every stage of commerce. And he points out that a truck gets involved at some point in every operation’s supply chain.

So the truck driver shortage probably will gets worse before it gets better, reaching perhaps 250,000 drivers, said Welch, head of Overland Park-based YRC.

The nation needs more than 96,000 new drivers a year for the next decade, he said, but recruiting is getting more difficult. The industry has to look at 12 applicants to find one person it can train or who is qualified to put in a cab.

Welch said obvious solutions aren’t real. Younger workers aren’t interested in driving a truck, and companies struggle to raise pay.

“It’s not like there’s an opportunity to raise the driver’s wages without passing that cost on,” Welch said. “We’re not seeing prices rise fast enough to offer drivers a lot more money.”

It may help that technology is increasing inside the cab of tractors, making the job perhaps more attractive to millennials, Welch said. For example, new equipment measures drivers’ blinking and eye alertness to help reduce accidents, and there are collision avoidance systems and electronic loggers.

Welch drew no response from the audience when he called for a fuel tax to fix the federal highway trust fund, which he called “a joke.” The fund is heading toward zero in 2015, but highways and other infrastructure need investment now.

“Let’s raise the fuel tax and get on down the road,” Welch said.

At the same time, Welch called on Washington to address a trend toward increasing regulation of trucking. He said the industry is getting “choked” by regulation, which seems greater now than before deregulation came in the 1980s.

The industry is experimenting with trailers that are 33 feet long rather than the current limit of 28 feet. Welch said allowing twin 33-foot trailers behind a tractor would boost the industry’s productivity without adding weight to the roads. Trucks fill up with freight well before they reach weight limits now.

He said it would be one way to address increasing strains on a key industry, but trucking is having trouble getting attention to its needs.

“It may require the supply chain choking down to the point where it affects all of us that we are able to get little more flexibility,” Welch said.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com. Follow him on Facebook and Twitter at mdkcstar.

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