Northern’s Capacity and Staffing Challenges

May 28, 2021

Dear Customer,

We want to follow up on the “Industry update and Northern’s capacity and staffing challenges” letter we sent out 4/9/21. As part of this update, we want to also provide some quantifiable information on the industry.

  1. Driver Staffing– We have made good progress in hiring but unfortunately with all of the options drivers have currently, many are looking for jobs where they can be assured to be home every evening so our net gains the last three weeks are minimal.
    1. We have started working with two new job search companies. The number of contacts and leads for drivers has doubled the last two weeks and we have 9 new drivers scheduled for training over the next three weeks.
    2. We have a Job Fair scheduled for May 8th at our Turlock terminal
    3. We are launching a social media campaign to recruit drivers
  2. Loading/Unloading Delays- Shippers & Receivers as a whole are overwhelmed and under staffed. Our average wait time has increased substantially. Last week we had 121 locations that exceeded over 4 hours to load/unload with many in the 6–8 hour timeframe. This means it takes more drivers to do the same work.
    1. Prior to this surge a driver doing pickups (PU’s) could do 4-5 PU’s per 10-12 hour shift. We now are averaging 2-3 PU’s per shift. On a busy day we go to 190 locations. The math on this equates to 42 drivers needed to hit 190 locations, at the 4-5 PU per shift ratio. Now it requires 76 to do the same work. This is an 81% increase in required drivers.
  3. Volume Surge- Volumes are at record levels for Northern driven primarily by the re-opening of foodservice but the driver shortage and high volumes extended beyond just reefer freight. One example is that there are articles that fuel prices could spike because of fear that there won’t be enough drivers to haul the fuel to the pumps.
    1. Please check out the link below for load to truck ratios which detail how many loads need to be covered versus how many trucks there are to cover them. The West Coast is currently at 5.6 to 11.9 loads per available truck for reefer trucks.https://www.dat.com/industry-trends/trendlines/reefer/demand-and-capacity

Our team is committed to doing everything in our power to cover your freight needs. Since LTL is our core business, we have cut back on TL capacity and are being very selective in taking on any new business to ensure we are taking care of our long-time partners. As stated in the previous letter, part of our commitment to “Service is the Difference” is to ensure we are keeping you informed on what is going on in the industry and in our company. That is the purpose of this update. While this likely is not the news you want to hear, our hope is that by providing you quantifiable information supported by third party analytics, it helps you plan and explain to your customers why shipments are being delayed.

Please feel free to contact your salesperson, CSR or myself with any questions you may have. Thank you again for your loyalty and partnership.

Sincerely,

Dave Bates