While shippers grapple for capacity in what looks to be a busy peak shipping season, the biggest hurdle this year may be as simple as a lack of bodies. Increased demand for freight services across the board in 2004 has left carriers short-staffed and looking to recruit new employees, using higher salaries and signing bonuses in some cases.

A recent news report said Union Pacific railroad planned to hire 5,000 new employees between August and December and CSX has hired 1,400 new employees in the past year, 25% above its current attrition rate, a clear indication that the carriers are struggling to meet demand for their services.

In a recent report, Andrew Meister, analyst at Stifel, Nicolaus & Co., said trucking carriers may have a difficult time covering their loads, but for the most part truckers enjoy the scarce capacity. "It's the first time the wind has been at their back in terms of having pricing power," Meister says.

For shippers, the carrier crunch means keeping an even closer eye on shipments and getting more accurate forecasts to ensure that carriers will have the capacity—equipment and bodies—to handle the shipments.

dhannon@reedbusiness.com