I hear a lot of people talking about how the trucking industry is moving heavily toward team operations and pretty soon we’ll all be running team. They say trucking companies aren’t making money with solo drivers, that in order to get more productivity out of the trucks they’re going to force us all to run team. Now that the economy has slowed there has seemingly been an increase in the number of trucking companies that are running more team operations or are requiring new drivers to team up when coming out of school. So is it true? Will teaming be the future of trucking? Let’s take a look at what’s going on.

Trucking Companies Striving For Greater Efficiency

Efficiency is the name of the game in trucking. The profit margins for trucking companies are very, very slim (or non-existent) and they must do all they can to turn a profit. The obvious answer when it comes to getting the most productivity out of each truck seems to be to run teams so that the truck can keep moving, right? But how efficient is this?

In coast to coast operations, running team is a tremendous benefit. You can run a load from New York City to Los Angeles in about two days flat if they keep the truck rolling, which is pretty amazing service no doubt. Refrigerated carriers tend to have far more runs of over 1500 miles because of the nature of the food industry. You have a lot of food produced in relatively small regions of the country and shipped everywhere from the point of production. California is a great example of this – they are one of the world’s richest sources of produce and thus ship it coast to coast.

But what about shorter runs – say 750 miles or less? Team trucks running shorter runs are far less efficient than solo trucks because the teams will be sitting much longer if the appointments can not be moved ahead. The two drivers must make a good living so a team truck needs to turn far more miles than a solo truck for the team drivers to earn a solid paycheck. A solo truck can make the same 750 mile run overnight with just one driver, so running shorter runs is more efficient using a solo driver.

The Availability of Team Runs

So the question becomes how many shorter runs vs. longer runs are there available? If you have a majority of longer runs in your fleet, then using mostly teams can be a great benefit. But outside of the food industry, many industries have regionalized their operations. Being able to produce goods closer to your customers saves money in shipping costs and provides faster service to your customers. So a lot of manufacturers have either gone to producing goods in a larger number of smaller factories, or have gone to using multiple smaller warehouses scattered in several regions across the country to store products awaiting shipment to customers.

Because of this regionalization, there is a greater number of shorter runs available, especially in the dry freight realm. You can be sure that when it comes to dry freight, teams will not be dominating the industry. In the refrigerated realm you’ll see a lot more team operations.

Schneider National’s Recent Hiring Announcement

Schneider National recently announced in a Phoenix Business Journal article that they will be hiring 2500 solo drivers in 2010 for their regional operations. This recent announcement of 2500 new truck driving jobs shows the strong demand for short haul services. In a statement by Mike Hinz, the vice president of Schneider National:

“Work-life balance is more important than ever to today’s professional truck driver. Schneider’s regional driving opportunities are a perfect fit for those drivers who want to make a good living with a company that will be here tomorrow, and at the same time, enjoy more time at home with their families. The customer demand for our regional service has exceeded our expectations and created enough freight density to get drivers home weekly,” – Mike Hinz – Vice President of Schneider National

So as you can see, the demand for short haul runs made by solo drivers has not waned, even in this environment of low driver demand and high fuel prices.

What About The Railroads?

Railroads are a very inexpensive but also a very slow way of shipping goods. The service will take longer than a team truck but the amount of money it costs to ship goods by rail is far, far less than by truck. Depending upon the nature of the product being produced and the customer demand for the product, many manufacturers, warehouses, and customers have put a large amount of freight on the rails and taken it away from trucks.

The greatest savings when it comes to shipping by rail is fuel. It takes far less fuel to ship freight by rail than by truck, so the higher fuel prices get and the longer they stay high the more freight you’ll see transfer from truck to rail. Interestingly enough, most freight shipped by rail has to be taken from the manufacturer to the nearest rail yard and from the final rail yard to the final destination by short-haul trucks. So the higher the fuel prices get, the more freight will be shipped by rail, the more solo drivers you’ll need, and the fewer team operations needed.

How Does Driver Demand Effect Teams?

Driver demand has always been a huge problem for trucking companies – there are just not enough truck drivers available to fill all the trucks – until the economy came to a screeching halt in late 2008 that is. Right now there is an excess of drivers for the first time in recent memory in the trucking industry and trucking companies are trying to take advantage of it. Because driver pay has gone down with driver demand, it’s more affordable for trucking companies to run team than it was in the past. Also, the greater availibility of drivers has made it easier to fill all the trucks while still running a larger number of teams in the fleet. So the balance for companies that have been running both teams and solo drivers has temporarily swung in the direction of running teams.

But balance that effect with the fact that many drivers do not like the idea of sharing a truck with someone and would like to get home more often than once every 2-3 weeks, which is average for most team operations. So when driver demand is low it’s easier to find more people willing to run team, but once the economy picks up and the demand for drivers increases again, fewer drivers will be willing to stay out 2-3 weeks at a time and share the truck with another driver.

Putting It All Together

In the past couple of years, a slow economy with heavy job losses has helped make it more economical for trucking companies to run teams. However, fuel prices have remained relatively high which has made it more efficient to ship long distance runs by rail, further increasing demand for solo drivers and decreasing demand for teams. As the economy picks up, we can presume that fuel prices will increase along with driver demand, which in turn will further crimp the need for team operations.

So as you can see, there are a number of inter-related factors that go into creating an environment that is effective for team operations. With swings in the economy, driver demand, and fuel prices there is an ever-changing demand for teams vs. solo drivers, but there will never be a scenario where the industry going to a large percentage of teams will make sense. Teams are a specialized segment of the trucking industry – they will always be around and highly effective for certain scenarios, but very ineffective in many others.