By David HC Correll, PhD, Lecturer/Co-Director, MIT FreightLab, Massachusetts Institute of Technology
As America faces supply chain disruptions unlike any in recent memory, people are understandably looking for the root cause of the crisis. Could there be a single key that we haven’t yet tried that could unlock this mess? I don’t think so.
In my experience, asking anyone about the root causes of America’s current supply chain disruptions is kind of like a Rorschach test: people tend to report back anecdotal information about the thing they are currently maddest about; or, the worst thing that has happened to them recently. Unfortunately, this year that could be anything. In practice, many of us are looking for answers to a national problem in a pool of our own personal frustrations.
Among the many promises of a more digitally connected supply chain—one that aggregates and shares transportation data across networks—is that we can move beyond personal and anecdotal insights and towards generalizable data-driven ones. We can take scientifically rigorous looks at what is working, and what isn’t, in close to real-time.
The FreightLab at the MIT Center for Transportation and Logistics is actively working with the industry on precisely these questions. Among the observations that strike our team as especially problematic right now is the chronic under-utilization of the American truck driver.
The Underutilization of the American Driver
We have studied thousands of American over-the-road truck drivers’ Electronic Logging Device (ELD) data over several years and reached a few conclusions that we believe to be generalizable and relevant to our current predicament.
First, American truck drivers average about 6.5 hours per day driving, when legally they could be driving 11. This, of course, means that roughly 40% of their workday on average is left ‘on the table’— precisely at the time when America needs this capacity the most.
At a time when everyone is worried about the driver shortage, how can this important national resource be both simultaneously scarce and underutilized? Our data-driven investigations have led us down a few paths.
Appointment Time and Day of Week of Matter
Where drivers aren’t driving, they are oftentimes sitting idly at shippers and receivers enduring dwell time.
But our analysis shows that dwell time is not distributed evenly over a drivers’ weekly calendar. Our investigations of large data sets show that dwell follows predictable patterns on both daily and weekly cycles.
First, a driver who shows up during typical weekday business hours experiences far less dwell time than does a driver who shows up after 6 pm, or on the weekend. This pattern is evident in data from multiple carriers, shippers and brokers and is true for both live and drop-and-hook loads.
This is particularly problematic in the current environment when we compare these results against the driving hours achieved by drivers on different days of the week. Drivers typically reach their 6.5 hours driving, or slightly better, on Tuesdays, Wednesdays and Thursdays of every week. They tend to drive fewer hours on weekends and Mondays.
This alone is not so interesting, but when we compare the driving hours by day of the week during soft (low price per mile) and tight (high price per mile) markets, something peculiar happens.
Drivers drive more hours during the tight market, when higher rates per mile incentivize them to do so. However, they find those extra hours mostly on weekends, not on weekdays. They are already achieving all the hours that they can on Tuesdays, Wednesdays and Thursdays. The available slack capacity in our system is therefore available at precisely the time when our shippers and receivers are seemingly under-prepared to make the most of it.
Shippers/Receivers: Your Reputation Precedes You
Our lab has also done a number of studies looking at historical dwell time by facility in the United States. The results are sobering. Unfortunately, we have observed that the best predictor of a facility's dwell time is its historical dwell time. In essence, people don’t change and neither do facilities.
And, interestingly, when we compare where dispatchers send their drivers in tight versus soft markets, it turns out that dispatchers know this too. A statistically significant distinction is evident when we compare where dispatchers send drivers during tight markets, when drivers’ time is worth more, against where dispatchers send their drivers during soft markets, when the drivers' time is worth less.
In tight markets, dispatchers are sending their drivers to customers with lower historical dwell times. That is, the data suggests that if you are a shipper and you can’t get a truck in a tight market, it might be because your reputation precedes you in the driver experience data already collected by carriers. There are several efforts already underway to make that data available pre-competitively across the carrier and analyst networks.
Appraising the Elephant in the Room
There is a famous ancient parable about blind men feeling around an elephant, trying to decipher what strange creature really is. One who feels the elephant’s ear thinks it is a fan. One who feels the elephant’s tusk thinks it is a spear and one who feels the elephant’s mighty side believes that he has encountered a wall.
In this telling of the parable, each man is telling the truth, and is accurate to his own experience. But what useful thing could anyone do with these disparate and personal observations?
Until the observations are aggregated and considered as a whole, no one will know the true nature of the beast before them. I believe that the same is true regarding America’s supply chains and the problems that we are currently experiencing.
An interconnected supply chain, one where transportation data is aggregated and scrutinized scientifically, could be one where, for the first time ever, we see all our problems for what they really are. We could truly come to understand the nature of the beast before us.
The promise of the interconnected supply chain is the promise of a faster and more accurate path toward understanding and overcoming the problems that we currently face.