This fireside chat recap is from Day 2 of FreightWaves LIVE @HOME.
FIRESIDE CHAT TOPIC: High demand, tight capacity and how fleets are navigating the current freight market
DETAILS: A discussion on capacity challenges in trucking
INTERVIEWER and SPEAKER: George Abernathy, president of FreightWaves, and Adam Miller, CFO of Knight-Swift Transportation (NYSE: KNX) and president of Swift Transportation.
Miller was appointed president at Swift Transportation in November in addition to his role as Knight-Swift’s CFO. Miller has held various leadership positions within the organization since he joined Knight Transportation in 2002.
KEY QUOTES FROM MILLER:
On capacity constraints: “The driver market, it’s always been a challenge in our space. Historically when we’ve seen capacity tightness, we’ve been able to raise driver pay to a certain level, and typically you would see drivers begin to enter the market as the pay differential from other vocations started to spread. People would come in and despite the lifestyle challenges incurred from being over the road, they were able to make sense of it because of how much they were being paid. Today that hasn’t really been the case.”
On driver recruitment: “We’ve done quite a bit over the last probably six to eight months from a driver pay perspective in raising base pay multiple times, adding incentives, even offering now a guaranteed minimum wage every week if you’re available to work, and it really hasn’t made a dent. If anything, we’re running to stand still or just slowing the bleeding.”
On rate negotiations: “The demand for, particularly, one-way capacity is at unprecedented levels. Our industry has always been cyclical and I think the cyclicality has predominantly, at least the last several cycles, … been driven by capacity; it’s shortages and then we oversupply. Today you have a shortage while demand has been very strong. You have customers that have record demand in store and then through e-commerce as well.”