The Driver Shortage Debate
Is there or is there not a truck driver shortage? There are many opinions on the subject, especially as the economy recovers.
Many feel increasing stringent federal regulations impacting drivers, especially new driver hours of service regulations and mandatory electronic onboard recorders, will have a dramatic impact on the driver pool. And the acute lack of "young blood" in the truck driver community is another big problem. Right now, only 17% of the current population of truck drivers and owner-operators are 34 or below, while 51% are 45 or older.
Monitoring the general media shows many stories about an impending shortfall of qualified drivers to haul the nations freight. While most claim the industry will suffer a dire need for qualified drivers, others question whether there is indeed a driver shortage. CNN recently covered the issue in "As The World Churns: The Driver Shortage Myth." To view the video report, visit http://www.drivershortage.ca/?media=video-sample-title-6
Tire manufacturer, Bridgestone, recently asked a number of industry experts to give their take on a possible driver shortage, what it might mean and strategies for coping with it. Following are the highlights of responses from that random survey:
Eric Starks, President of FTR Associates, a leading researcher in freight modal share analysis and forecasting. www.ftrassociates.com.
"Economic recovery always creates a shortage of truck drivers, and this one will too, though we expect it to be structurally different from those in the past.
"Even if they increase driver wages, fleets will probably not be able to hire enough drivers fast enough to prevent shortages. And we don't think the whole issue is pay. The job just isn't as attractive as other ways of making a living.
"Along with that, there are some big regulatory issues this time: CSA will have the effect of reducing the number of drivers available by withdrawing unsafe and marginally safe drivers from the pool.
"We also see hours of service rules reducing fleet productivity, creating a need for more drivers to haul the same amount of freight.
"Electronic onboard recorder use may also add to this effect. We would expect to see more 'drop and hook' activity to keep cargoes moving.
"Many fleets have been governing their speeds to reduce fuel consumption, and we may see them adjusting their speeds upward to add a bit more productivity, even though it will cost them more in fuel that's already rising in price. That cost, along with driver pay increases, will have to be passed along to consumers.
"The upside is that we can expect most fleets to be healthy, getting higher rates and able to afford some driver pay increases. Still, we expect this driver shortage to last a lot longer than the one in 2004 and to be much bigger. Recruitment will be difficult, so fleets should really concentrate on retention."
Annette M. Sandberg, CEO of TransSafe Consulting, LLC, former Administrator of the Federal Motor Carrier Safety Administration (FMCSA) and former Deputy Administrator of the National Highway Traffic Safety .
"As the economy picks up, construction, which competes with trucking for many of the same workers, tends to pick up faster, pay better and get its employees home every night. That makes any shortage worse.
"Plus, the best time to recruit is when people are graduating from school. Yet trucking requires drivers to be 21 years of age, and many recent graduates aren't willing to wait three years before they can get a job.
"New regulations may also increase the amount of training required, from 40 to 120 hours.
This could be an additional financial burden on fleets, because they will undoubtedly be the ones who will have to pay for this additional training.
They will need to make arrangements with driving schools and probably will require commitments from students to work for the fleet in exchange for their training.
"Right now, there's also some indication the grants that were going to be used to transition military personnel into trucking may be cut because of the federal budget crisis.
"It might be nice to raise every driver's pay or even put them on an hourly wage, but it would be a pretty radical and very costly change, and our economy probably isn't healthy enough for that.
"Overall, fleets should concentrate on retention of the good drivers they currently have. It will not be easy, but it will work to make the industry even safer."
Joe Rajkovacz, Director of Regulatory Affairs for the Owner-Operator Independent Driver Assn. Before joining OOIDA, Joe logged more than 3.8 million safe miles behind the wheel of a truck as a driver and small business owner-operator. www.ooida.com.
"We don't believe there is a driver shortage. We believe the problem is almost entirely one of churn, brought on by the fact that many trucking companies don't think driver pay should be governed by market forces.
"Driver turnover rates of 130% or more are common, and that's because trucking is not a very attractive profession for most people today. Drivers want respect. They want home time. And they want pay that makes it possible for them to share in the American dream.
"We believe CSA is going to be a game-changer, both for fleets and for drivers. Now more than ever, drivers' safe driving records are going to be their biggest asset. Fleets who can attract and retain drivers with great safety records will have great safety scores and that is going to be critical to their success.
"And they'll have to pay to get those good drivers. It makes no sense for every driver to have to accept the same, or nearly the same starting pay, regardless of driving experience and safety record.
"Since over 90% of all motor carriers have fewer than 20 trucks, we also expect a cautious approach to expansion as the economy recovers. The days when you could put down a first and last payment and get the keys to a brand new truck are over. So the equipment population is not going to suddenly expand to relieve a capacity crunch.
"Fleets who can offer drivers a high degree of predictability, in home time and work time, and who provide top-notch equipment will have a competitive edge. Those who assure their own productivity, by developing strong lanes so drivers don't have to sit and wait or work for no pay can attract safe, quality drivers and keep them."
Bob Costello, Chief Economist and Vice President for the American Trucking Assns. www.truckline.com.
"I think we're faced with two kinds of shortages. The first is what I'd call a 'quality' shortage, and that's on right now. Back in 2005, fleets would complain that they had trucks available, but no applications from drivers. Today, they tell me they have lots of applications, but very few they can hire.
"CSA and insurance company requirements are making it a lot harder to find drivers who have safety records fleets can live with.
"The 'quality' shortage will be followed by a 'quantity' shortage, similar to what we had before. Driver pay is already going up, as are freight rates, but there's a limit to how much fleets can pay, given slim profit margins and intense competition.
"I've never talked to a fleet that didn't want to increase driver pay. Fleets absolutely hate turnover and churn. They make driver shortages feel much worse, because it costs so much money to recruit and train replacement drivers.
"There's no one solution to either the quality or the quantity shortage. Pay has to go up, but working conditions have to improve too. You rarely hear of a local or regional fleet (that gets drivers home frequently) with a driver shortage. Home time makes a big difference. Drivers who value home time may even accept lower pay rates to get it.
"Many fleets are looking to intermodal shipping for their long hauls, so they can reserve their trucks for the shorter, regional ones. But intermodal can't handle it all.
"Electronic on-board recorders may also be very good for fleets and drivers. The ability to use available hours and equipment really efficiently can increase productivity for the fleet and pay for its drivers. Fleets who can exploit that efficiency will have a great competitive edge in this environment."
Chris Burruss, President of the Truckload Carriers Assn. Burruss also heads the North American Transportation Management Institute, Professional Truck Driver Institute, Truckload Academy and TCA Scholarship Fund. www.truckload.org.
"The first important strategy is recruitment and retention. Fleets with best practices in the area of work environment, home time, miles and pay should be able to deal effectively with the issue of churn.
"The bigger issue is what we're going to do about finding replacement drivers for the ones we lose from retirement, CSA fallout and other causes. Our Truck Driver Training Schools Committee is taking a serious look once again at recruiting more veterans, women and especially, at attracting younger people.
"Consider this: In Tennessee, an under-21 driver can legally drive a truck from Memphis to Bristol, a trip of at least seven or eight hours, through all sorts of terrain because that's intrastate commerce.
"And yet, that same driver can't legally make the trip from Memphis to West Memphis, Arkansas, a distance of just a few miles, because that's interstate commerce. And to change that would take legislation, not rulemaking.
"What we'd like to do is not just hand the under-21s the keys, but create an apprenticeship program that would allow younger drivers to get into the industry and become licensed over time.
"Of course, trucking, the insurance industry and regulatory bodies will have to support the idea. But we believe it has significant potential.
"It may be very painful getting there, but as we work through this crisis, we hope we can create better recruitment and retention practices, better sources of drivers, and improve our industry's image all while improving driver pay and working conditions."
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