Resin distributors need someone behind the wheel

Roll on, 18-wheelers: A shortage of truck drivers is impacting the resin distribution market.

"Logistics are a huge challenge," said Ed Holland, president and CEO of M. Holland Co. in Northbrook, Ill. "Whether it's trucking or rail, we're seeing higher freight rates and a shortage of drivers, as well as tight supplies of rail cars because on increased [resin] volume on the Gulf Coast."

At Chase Plastics Services Inc. in Clarkston, Mich., President Kevin Chase said that his firm "used to be able to get a truck within 24 hours, but now it takes four or five days." He added that profit margins are being squeezed by higher transportation costs and higher wages for drivers, as well as by raw material cost and volatility.

In October, the American Trucking Association, a trade group based in Orlando, Fla., issued a report saying that the industry was on pace to be short 50,000 drivers by the end of last year.

"In addition to the sheer lack of drivers, fleets are also suffering from a lack of qualified drivers, which amplifies the effects of the shortage on carriers," ATA Chief Economist Bob Costello said in a news release. Costello detailed some causes of the shortage, including the aging driver population, lifestyle issues and regulatory challenges.

"We already see fleets raising pay and offering other incentives to attract drivers," he added. "Fleets are also doing more to improve the lifestyle and image of the truck driver." There are also policy changes, Costello said, such as reducing the driver age as part of a graduated licensing system or easing the transition for returning veterans that can make getting into the industry easier and help with the shortage.

Some major resin distributors have announced freight surcharges to cover higher shipping costs, while others are considering making that move.

"At times, we've needed a few extra days for delivery," said Grant John, president and CEO of PolySource LLC in Independence, Mo. "We have to do a good job of communicating [shipping] information to our customers because it doesn't look like there's going to be any near-term relief."

"There's pressure on the availability of bulk trucks and restrictions on how many hours drivers can drive, and that's led to higher shipping costs," added Dave Dever, distribution sales vice president with Osterman & Co. in Cheshire, Conn. "It's a really big topic for us."

Bamberger Polymers Corp. of Jericho, N.Y., "can get trucks, but we're paying more than we ever have," according to logistics manager Ron Voegele. "We try to reserve them early, as last-minute shipments are very expensive and hard to cover."

He added that new regulations and enforcement of "seat time" for truck drivers are behind the rising costs. "The [trucking] industry is having a hard time finding young individuals interested in the occupation," Voegele said. "Every trucking company I talk to says the same thing: Good drivers are difficult to find."

Nexeo Solutions has its own private fleet of trucks and, as a result, has been less affected by shipping challenges than other companies have, according to Shawn Williams, senior plastics vice president. But the firm, which is based in The Woodlands, Texas, still has seen its customers impacted by higher prices from commercial carriers, he added.

John Moisson, president of Jamplast Inc. in Ellisville, Mo., estimated that his firm's freight costs are up at least 20 percent this year.

"Trucks are expensive and scarce," he said. "We need to plan accordingly."

To address customer concerns, PolyOne Corp. of Avon Lake, Ohio, has posted a two-page trucking industry fact sheet on its website.

"In North America, there is ample documentation that drivers and trucks are in short supply and diesel costs are going up," Scott Horn, PolyOne Distribution president, said in an email.

According to the PolyOne fact sheet, the average age of a truck driver is 55, which is 10 years older than industries that pull from the same labor pool such as construction and manufacturing.

On its website, M. Holland has posted two blog entries on shipping so far this year. In a May post, officials said that the firm uses bulk trucks to deliver about 50 percent of its resin to customers.

"The trucking shortage has become the new normal since last year's holiday demand and natural disasters," Logistics Manager Michelle Rupke said in the post. "Luckily, we have great relationships and work efficiently with our core trucking carriers and logistics partners to minimize the impact of this challenging new logistics world we live in."

In a follow-up post in June, M. Holland officials said the firm has benefited from receiving "shipper of choice" status from several suppliers. That status supplies M. Holland with higher visibility, contracted freight rates and value-added services, officials said.