Truck Drivers Wanted
By George Anderson
A study conducted for the American Trucking Associations (ATA) by the research firm Global Insight said there was a national shortage of truck drivers, particularly long-haul
heavy-duty drivers, that “has become a limiting factor in the operations of many companies” and that demographic trends suggest the problem will become more severe in the next
nine years.
According to the study, The U.S. Truck Driver Shortage: Analysis and Forecast, there is currently a national shortage of long-haul drivers estimated to be approximately
20,000. This number, says the report, could rise to 111,000 by 2014.
Numbers alone, say the study authors, do not tell the full story. The study says the industry continues to reject a high percentage of potential drivers because they lack the
qualifications for the job. Lowering standards for jobs is not the answer, as any initial savings in compensation will be more than offset by the cost of higher insurance premiums
and vehicular accidents.
Companies are also hurt by the high turnover or “churn” rate. The ATA reports that large carriers reported 121 percent turnover rate last year.
To attract more people into the long-haul driver market, wages will continue to go up. The report expects wages to increase an average of six or seven percent over the next three
years.
Higher wages are not the sole answer, according to the report. Companies need to address quality of life issues as well. While some hardships simply come with the territory of
the job, the most frequent complaints of unhappy long-haul drivers are “extended periods on the road away from home and unpredictable schedules for getting home.” The report recommends
that companies weigh “the high cost of employer turnover” against any “marginal loss in productivity” resulting from reworking schedules to get drivers home more frequently.
Moderator’s Comment: How big an issue is the driver shortage for the retailing and related industries? What is the
impact of the driver shortage? –
George Anderson – Moderator
I feel a career change coming on (which some have already suggested for me, by the way). The romance of the open road! A modern-day cowboy, driving foodstuffs to market. If it’s good enough for Karl “The Mailman” Malone as a second career, it’s good enough for me. From dunking basketballs to dunking donuts. (I can do the donuts, but not the basketballs.)
There’s an easy answer to all of this: Give drivers licenses to illegal aliens who carry Matricula cards or have no identification at all (wait, we’re already doing that). Then they can pilot multi-ton weapons down the road at high speeds for minimum wage, and their families can live in the cab. Think of it, five or six illegal drivers changing places inside the cab, with one always behind the wheel (we hope).
Or, we could go “intermodal” (whatever that means) as suggested by “wisuri.” I think I went intermodal once after a college drinking party, but my memory’s foggy on the specifics.
Every year for the past 25 years, I’ve read an article about the shortage of long haul truck drivers, and subsequently I read articles about the average wage of a long haul independent truck driver, which is $40,000 for a 90 hour work week.
The truth of the matter is that the shortage of long haul truck drivers is directly related to wages and volume.
There are two long haul driver classifications: union drivers working for a trucking company and an independent owner/operator.
There is a shortage of union drivers who expect to earn $100,000 a year operating a long haul tractor 60 hours a week. These are the guys that operate inter-city trucks. Long haul trucking companies have no problems finding qualified truck drivers at the $50,000 a year range.
The reason there is no problem finding truck drivers at the $50,000 range is that most trucking companies and private fleets moved most of their long haul trucking to rail for the long haul, and only truck the trailers between the rail hub and the customer. There are plenty of displaced truck drivers working for $30,000 a year driving city trucks looking for $50,000 a year jobs for long hauls.
The challenge with owner/operators is the rate they get paid per mile. These folks do not get paid a salary or an hourly wage. These folks pay for their equipment, fuel, maintenance, insurance, etc… The trucking company is responsible for creating the infrastructure.
I can tell you from personal experience that owner/operator revenue per mile has not increased more than 1% a year in the past 15 years, while everything else in their world has doubled.
So what does all this mean?
It’s easy… supply and demand drives the availability of long haul truck drivers. The learning curve is 8 weeks and the licensing is relatively easy and does not require a high school diploma, unlike nursing and pharmacists.
In all fairness to everyone… the rail system for long hauls is efficient… it’s cost effective… it’s getting better… BY THE WAY RFID HAS MADE IT BETTER OVER THE LAST 15 YEARS…and if there was a ‘real’ shortage of qualified long haul drivers, the wages would rise and the pipeline would fill rapidly.
Why do I know this much ? In 1996, I developed the first RFID based trucking management system in the world. www.genlogistics.com
Increasing numbers of retailers will go intermodal, rather than relying strictly upon the truck as a primary transportation vehicle.
Driver shortages are critical, but just as important will be whether West Coast ports can keep pace with the growing imports from Asia and Latin America — and how retailers will be able to manage escalating bottlenecks.
This is a very big issue, especially when combined with the backlogs being experienced in the rail industry and the problems at the airlines. Just how do you get product to the store if there isn’t a trucker available, the train schedule is a month behind and air cargo is too expensive and can’t accommodate the volume? The move to 53-foot trailers is helping, as is the increase in the number of states allowing double trailers, but the driver shortage still hurts the retail supply chain.
The effects are pretty straight forward.
1. Shippers are having a terrible time getting capacity, impacting service levels.
2. Transportation costs are going up, and will go up further as driver wages continue to increase in an attempt to increase driver recruitment and retention.
Part of that is unavoidable, meaning costs of goods will increase, impacting prices, margins or both for retailers and manufacturers.
It can lead to changing strategies, for example, causing more retailers to go to private or dedicated fleets to better ensure capacity and service levels. Many retailers and shippers have already made operational changes at distribution centers to make carriers more efficient in getting to a dock door and loading and unloading.