Report

Truck Drivers in US – Motor carriers struggle to find enough qualified drivers

Over the past 15 years, the trucking industry has periodically struggled with a shortage of truck drivers. The first shortage during this period was documented in a 2005 report. At that time, the shortage was roughly 20,000. During the last recession starting in 2008, the driver shortage was eliminated as industry volumes plummeted, resulting in fewer drivers needed. However, as industry volumes began to recover in 2011, the shortage slowly returned. The driver market continued to tighten and the shortage skyrocketed to 38,000 by 2014.

Today, motor carriers struggle to find enough qualified drivers, which makes the shortage “feel” much worse than the numbers in this report. Many carriers, despite being short drivers, are highly selective in hiring drivers because they have made safety and professionalism high priorities.

There are many reasons for the current driver shortage, but one of the largest factors is the relatively high average age of the existing workforce.

In 2014, the trucking industry was short 38,000 drivers. The shortage is expected to reach nearly 48,000 by the end of 2015.

  • If the current trend holds, the shortage may balloon to almost 175,000 by 2024.
  • This analysis does not consider the impact of specific regulations, such as the implementation of electronic logging devices for truck driver hours-of-service recording. Instead, it simply demonstrates the difference between expected supply of drivers (using demographic and population data) and the demand for drivers (which accounts for industry growth and replacing aging drivers).
  • The truck driver shortage probably seems much worse to motor carriers than the current figures suggest because of a quality versus quantity issue. Many carriers have
    strict hiring criteria based on driving history, experience and other factors. As a result, despite receiving applications for employment, motor carriers are finding few eligible candidates, which is a quality issue. In 2012, 88% of fleets said that most applicants were simply not qualified. The cost of lowering hiring standards can be significant in the long run when accounting for increased insurance premiums and accidents. This analysis does not take into account the quality of applicants.
  • The truck driver shortage and driver turnover rates, which are running high in the for-hire truckload industry, are not the same. Turnover is a reflection of demand for drivers, with higher rates generally indicating strong demand for drivers. The vast majority of driver turnover is churn in the industry – drivers going from one carrier to another. As demand for drivers increases, trucking companies try to take drivers from other carriers by offering sign- on bonuses, newer trucks, and better routes. However, the shortage is calculated in a completely different manner and churn in the industry is not included in the shortage calculation.
  • Over the next decade, the trucking industry will need to hire a total 890,000 new drivers, or an average of 89,000 per year. Replacing retiring truck drivers will be by far the largest factor, accounting for nearly half of new driver hires (45%). The second largest factor will be industry growth, accounting for 33% of new driver hires.

COURSE OF ACTION

Because there is no one cause of the driver shortage, there is no one solution. Below is a brief list of market reactions and possible policy solutions to relieve the driver shortage.

  • Driver Pay Increases: The natural market reaction to any shortage is the price of the good rises. In this case, price is driver wages, which are beginning to increase significantly. Most fleets instituted large pay increases in the summer of 2014 with many repeating the increases again in 2015. Sign-on bonuses are used throughout the industry as well. Expect driver pay to continue rising as long as the driver shortage continues. Good benefits are also part of a total compensation package in the industry.
  • More At-Home Time: Potential drivers are often hesitant to take a job that requires so much time away from home, especially at first. The increased prevalence of retail distribution centers and use of the hub and spoke system have drastically reduced the average length-of-haul across the industry; this reduction in travel distances could and should translate to less time on the road for drivers. However, the industry can only reduce length-of-haul and increase at-home time so much.
  • Lower Driving Age: Interstate driving currently has an age minimum of 21. The 18-20 year old segment has the highest rate of unemployment of any age group, yet this is an entire segment that the industry cannot access (with the exception of local routes, which is generally reserved for seniority). Additionally, potential drivers are likely to have found another career path (that they are already 3 years into) by the time they reach 21.
  • Improved Driver Image: The public perception of a truck driver has unfortunately a tendency to be negative. Trucking Moves America Forward, of which ATA is a founding member, is an example of a positive image initiative and will hopefully highlight a demanding but rewarding career for potential drivers.
  • Former Military: ATA supports efforts to ease the driver shortage by facilitating the transition of military veterans into fulfilling careers in the trucking industry. In support of this, the industry recently committed to hiring 100,000 veterans over the next two years.
  • Better Treatment by the Supply Chain: Compounding the already difficult lifestyle, drivers often complain of mistreatment at shipping and receiving facilities. Complaints range from restricting access to restrooms to having to wait extended periods of time before the trailer is loaded or unloaded. Improving the experience for drivers at drop-off and pickup locations would provide for a more attractive career choice. All companies in the supplychain, including trucking companies, shippers, and receivers, need to treat drivers with the respect that they deserve.
  • Autonomous Trucks: Autonomous commercial trucks could eventually have a positive impact on the driver shortage, but we are still years away from truly driverless Class 8 trucks running on the highway as a normal part of the industry. Today, even though the technology is available, there are numerous limiting factors that prevent it from being used by carriers. Eventually, well beyond the dates of this report, one could envision an environment when the longer, line-haul portion of truck freight movements are completed by autonomous trucks and local pick-up and delivery routes are completed by drivers. However, motor carriers should not count on this being an option for some time.

Chosen excerpts by Job Market Monitor. Read the whole story at Truck driver shortage analysis 2015

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