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Will throwing money at drivers solve the trucker shortage problem?
A shortage of truck drivers, which has contributed to the ongoing supply chain disruption, has been a challenge for over 15 years and is only expected to worsen.
The American Trucking Associations (ATA) said before the pandemic that the trucking industry was facing a shortfall of nearly 61,000 drivers and would need to hire roughly 1.1 million new drivers over the next decade to keep pace with increasing freight demands.
According to the ATA, the problem can be seen in the relatively high average age of truckers — 46 years old — as well as the fact that only seven percent of truckers are women. Extensive regulations, pressure to fulfill on-time deliveries and long hours away from home have long dimmed trucking’s career appeal.
More recently, headlines of autonomous driving’s potential may have scared off young applicants. The shift to e-commerce, accelerated by the pandemic, has enabled long-haul truckers to join UPS, FedEx or Amazon.com in roles that offer more regular routes close to their homes.
To meet demand, private fleets have increased pay for truck drivers to more than $86,000 from $73,000 in 2013, according to an ATA survey.
As CNN recently reported, however, the pay hikes are prompting many drivers to switch from one company to the next, creating an annual turnover rate of 95 percent for truckload carriers. With the extra pay, some are choosing to work less to spend more time at home.
Legislators could be pushed to improve working conditions for truckers. In the U.K., the government just relaxed rules for how long truck drivers can work. The ATA is pushing regulators to lower the minimum age for long-haul truckers from 21 to 18.
Dollar General began offering a $5,000 signing bonus in mid-July to truckers to be paid within their first six months of employment.
Walmart started offering $8,000 sign-on bonuses in April for drivers with a promise to earn up to $87,500 in their first year. Walmart’s offer also included activity, training and mileage pay from day one; quarterly safe driving bonuses; weekly home time; and up to 21 days paid time off in the first year.
- New Survey Data Reveals Increases in Driver Compensation – American Trucking Associations
- Truckers are getting big pay hikes, but there’s still a shortage of drivers – CNN
- Calls trucking the ‘linchpin of the United States’ supply chain,’ urges bipartisan action on infrastructure – American Trucking Associations
- Dollar General Plans to Hire up to 50,000 Individuals by Labor Day – Dollar General/Business Wire
- Retailers back call for action over truck driver shortage – Talking Retail
- Aging workforce, booming industry create “perfect storm” for truck driver supply and demand crisis – Cleveland.com
- Retailers are scrambling to find trucks amid the pandemic, generating record-smashing pay for drivers – Business Insider
- Attention Drivers: Walmart is Offering Signing Bonuses – Transport Topics
- Got truck drivers? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Will ever-higher wages likely be most beneficial in solving trucker shortages or does retail have to reprioritize the career in other ways? What less obvious solutions do you see?
Poll
Loading …BrainTrust
Liza Amlani
Principal and Founder, Retail Strategy Group
Rachelle King
Retail Industry Thought Leader
Driver shortages are not an exclusively North American issue. UK media coverage this week revealed that Tesco were offering £1000 joining bonuses to new drivers — indicating the shortage. Commentators may suggest that this is driven by Brexit and “pings” from the COVID exposure app that citizens are encouraged to use — however, demographic factors, increase in consumer demand and changing consumer habits are likely to be be contributing factors too.
What has surprised me, given the geographic span of the shortage, is that there have been few comments from any organisation involved with autonomous or semi-autonomous trucks — perhaps I missed it, but I genuinely thought Elon Musk might have Tweeted something about the shortage.
In the short term, yes. Money helps lure recently retired ones, to incentivize drivers of smaller commercial vehicles to pick up truck driving. In the long term, autonomous trucks can start making bigger contribution, that will allow drivers to be on the wheel for longer duration without compromising safety.
But then there is a significant portion of cyclicality in the demand. As economy cools off a little bit, after the sugary rush of stimulus, and global supply chain eases, the domestic trucker demand could even out for the better.
It is a tough job except for the relatively few who love the road and being on it, but money talks….
Offering a signing bonus or increasing wages are just the tip of the iceberg. Improving working conditions and the amount of time that truckers are pressured to work is the only way to entice truckers.
Drastic changes need to be made and throwing money at the issues truckers face is not solving the root problem.
You are SO right, Liza. With challenges like this, there is always the tendency to look for solutions in all the wrong places. What I’ve tried to spell out in my bit today is that it’s the driving ENVIRONMENT that holds the key.
Higher wages are a good start. At the end of the day, driving trucks is a really tough way to make a living. It takes a toll on your body (the three ex-drivers I know, are EX because they all have serious back issues) and on any kind of family life. It’s a very unique lifestyle that doesn’t really appeal to younger people. Walmart is on point with guaranteed home time, that’s a big deal.
I would suggest that the industry needs to look at benefits, extended paid time off to make up for all the time on the road, and find ways to support drivers socially and economically while they’re out on the road.
This is a complicated issue that requires a holistic approach that looks at better ways to support drivers and their families if there is any shot of recruiting new drivers.
It’s not just the issue of wages. The intense pressure to deliver quickly means that many truckers put in 15-hour days and endure long stretches away from families. The pandemic taught American workers to take better care of themselves; the trucking industry will have to adapt to that reality.
Nothing happens without truck drivers, so will throwing money at drivers solve the trucker shortage problem? It can’t hurt.
The article hit on the big fact that older drivers are retiring and younger people aren’t choosing driving as a career, even though the potential to make good money is there. Walmart has the right idea with increasing benefits as well. This won’t be an easy fix, but it is a critical one.
Looks easy but this is not your father’s Continental on a summer day. It is a tough job. My son seems to be gifted in an ability to drive literally anything. The big problem in long haul he says, is boredom. Kind of reminds me of a friend whose dissertation was on the stress of prison guards. Guess what their biggest problem was, too.
Pay is the ante needed to play. Think about the following:
In short, time to up the thinking.
Maybe higher signing bonuses, year-end bonuses, and better retirement packages or health benefits will help. Maybe autonomous trucks will help. Maybe finding out what would motivate current truck drivers to enter the job or continue in the job would help. Maybe finding out why people in their 20s and 30s do not want to be a truck driver or finding out what would motivate them to make that choice would help. Clearly I do not have the answer, but the trucking companies haven’t found it either, so more discovery is necessary.
Throwing money at this problem may give some short term benefits but longer term, truck driving needs to be seen as more of a profession to encourage younger people to work in it. Let’s face it, driving a very large truck, maneuvering it in tight spaces is not easy and is a very highly skilled job, it’s just not seen as one. The long hours away from home on the road is not a very exciting prospect for a young person with a family. If they can earn more money, then that makes it easier to put up with, but will not generate the number of drivers needed in the industry.
In the UK, they have relaxed the working hours and that’s not necessarily a good thing. All it will take is an increase in accidents and there will be a huge cry to reverse it. We need to start to look at this as a supply chain problem and not just a “driver” problem. How can we move product in different ways, perhaps coordinated rail and road transport hubs could be a way of reducing the long haul requirement. Maybe it’s larger vehicles for long haul with break down hubs near towns and cities. The problem is not all about drivers and given the urgent need to solve the ecological impact of trucks and cars on our roads, we have to think more broadly to find answers to this problem.
Money never hurts — the recipient that is — but my thought is the issue with trucking is more related to the arduous nature of the job itself: long hours, isolation, ever-increasing regulations and the physical effort to (help) load/unload — yes, they DO that, too (and I think that’s always going to perpetuate the gender imbalance). The comment: “headlines of autonomous driving’s potential may have scared off young applicants” I’m not sure whether to laugh at the irony or groan.
Unfortunately, I don’t really see any “solution(s)”: despite a fondness for the question, sometimes the answer is there aren’t any.
This country has been over 40,000 truckers short for over more than a decade. The pandemic just accelerated the problem. Companies can throw more money at the problem, but until they can figure out how to get more people behind the wheel, all that will happen is an ongoing 95% churn factor.
Companies are going to have to start thinking more like Walmart. It is about creating a job and a life style that will attract and, more importantly, retain drivers.
A number of years ago, we worked with an oilfield company that was facing the same problem, and we build a program around a unique employment proposition. The number one concern of the driver we wanted to hire was safe working conditions, so we focused on SAFETY. If it isn’t safe, we don’t do it.
Yes, we were competitive in wages and salary, but safety is why they came to work for us.
Throwing money at this shortage is a short-term solution. When the average 46 year old male decides it’s time to retire soon, they still won’t have a pipeline to replace him.
Despite the fact that e-commerce growth has increased the need for truck drivers, it’s still not a popular industry nor one perceived in a favorable light. This is where the ATA can step in and show how the industry has evolved, with more appealing benefits and new career pathways (maybe everyone does not want to be a driver forever).
The industry needs a makeover; one that reinforces the critical role truck drivers play in today’s commerce-driven economy. People want to feel like their work makes a difference. Well, here is one industry where that is more true now than ever before. Better pay and benefits always help but a better industry perception can set them up for the long haul.