According to the American Trucking Associations (ATA), for-hire truck tonnage rose 7.9% in the first half of 2018, more than double the gain for the same period in 2017. While the booming economy has many carriers rejoicing at these statistics, it has also exacerbated issues that have affected carriers for years, forcing them into difficult decisions pertaining to hiring and business practices. The primary issue currently haunting carriers is, you guessed it, the driver shortage. However, this isn’t the same shortage we have seen over the past decade. In addition to a strong economy, the aging workforce, a tight labor market, the forced implementation of electronic logs, and the increased attractiveness of construction and manufacturing jobs have all contributed to today’s shortage of truck drivers. The situation is now not only inhibiting the potential growth of carriers at an ideal time for expansion, it’s causing ripple effects throughout the entire country’s economy. The stark difference in supply vs. demand of freight movers means products can get stuck in warehouses with no mode of transport. Given that nearly everything we touch was on a truck at some point in time, the stagnancy in transporting products could mean a substantial cooling effect on our economy.
As the shortage of truck drivers in the United States approached 300,000 in the second quarter of 2018 (compared to less than 30,000 in the second quarter of 2015), carriers scramble to hire more drivers while their customers similarly scramble to locate available truck space so their products move in a timely manner. Carriers have been able to boost hauling fees due to the scarcity of hauling capacity, but many still suffer losses due to their failure to hire and retain the number of drivers needed to meet rising demand. On a larger scale, customers paying more to have their freight hauled are having to decide whether to take smaller profits or to pass the increased costs onto the consumers, potentially fueling inflation.
Despite driver pay increasing 15% from 2013-2017, surpassing fuel as the largest expense to carriers nationwide, the driver shortage problem has reached a full boil. Many carriers are resorting to creative solutions to keep drivers, such as profit sharing, medical benefits, sign-on bonuses, retirement plans, and ensuring the drivers get home every night. Also, the industry as a whole is taking measures to enlarge the pool of CDL holders who can drive interstate. Notably, the ATA has supported a new bill aimed at allowing the interstate operation of commercial vehicles by candidates aged 18-21 years. Previously, this demographic was bypassed from the truck driving work force because that age group tends to take industry jobs immediately after high school and then ends up staying in those industries. The bill, part of the “Developing Responsible Individuals for a Vibrant Economy” or “DRIVE-Safe” Act, still needs to pass in both the House of Representatives and the Senate before going into effect.
Lastly, while there is a great deal of buzz around the industry suggesting the introduction of driverless trucks might ease the pain of the driver shortage, most analysts and carriers don’t expect to see this technology let loose on our highways for at least a decade. For now, carriers will need to reflect internally on what they can do to attract and retain drivers to transport the seemingly endless amount of freight being sent their way. For any questions regarding the driver shortage, business practices geared toward driver retention, or pending legislation aimed at alleviating the driver shortage, please contact Kevin Coghill at email@example.com or (804) 377-1273, or Steve Setliff at firstname.lastname@example.org or (804) 377-1261.