Oct 05, 2016
More product, fewer drivers
As our state and national economy rises from the Great Recession, the production of goods continues to rise while unemployment falls to near-record lows. For the trucking industry, this has brought the blessing of more product to move along with the curse of fewer drivers to do the moving. In October 2015, two trucking industry economists explored and quantified the several reasons behind why the U.S. was down 38,000 drivers, and why that number is expected to grow over the next decade.
The largest factor identified was retirement, accounting for 45% of the driver shortage. The average age of drivers currently is over 50, and firms struggle to attract younger drivers. Industry growth, thanks to a strengthening economy, is responsible for 33% of the shortage, with the remaining 22% was identified as drivers leaving the industry for other work, or drivers not meeting requirements and safety regulations, and essentially being forced out.
Finding solutions to the talent shortage
So what can be done? Let’s assume everyone would like to see the economy (and therefore the trucking industry) grow, so we’ll throw out “stop producing goods” as a possible solution.
While keeping safety in mind, a reexamination of current regulations for sensible solutions would be a step the right direction. For example, those 18-20 years old in the U.S. have the highest rate of unemployment, while at the same time regulations demand drivers must be 21 or older to cross state lines in a tractor trailer. Assuming those under 21 required extra steps in certification, those steps would take less time than waiting 2-3 years for their 21st birthday.
This example would perhaps bring some truckers into the workforce; however you would not be wrong to ask “Are 19 year olds clamoring to get into a big rig?” This question opens the discussion on what it the most critical piece of the shortage puzzle – how do you make the job more attractive to younger drivers? (“Younger” in this case meaning workers under 40). Fixing the image, and perhaps reality, and the trucking business would solve the lifestyle and age problem by attracting younger drivers. For example, some truck drivers are away from home more than a week at a time. One solution to keep drivers closer to home is turning long-haul trucking into more “relay trucking,” meeting other drivers half way to a destination and keeping both drivers closer to home. That’s one small step, but bigger issues of perception must be addressed.
Companies nationwide are constantly improving their employee’s workplace environment, why shouldn’t the same be done for trucking fleets? The advances in vehicle technology will improve fuel efficiency, overall safety, and shorten drive times. But that same technology can be used to to improve the driver experience if invested in the cabin and not just behind the dash or under the hood. Offering more spacious, Wi-Fi enabled cabins can enable drivers to better broker deals while on the road if their truck is empty after a delivery, and other freight needs to be delivered to an end user, and the driver just so happens to be in the proximity of that freight, give the driver the power to make the deal happen, and get an extra commission. And of course, that same Wi-Fi network can be used to connect flatscreens for Netflix or gaming for drivers needed a break. Investing in technology and comfort can improve the driver’s efficiency and profitability, while providing more attractive workplace environment at the same time.
As with most industries, raising wages helps boost employee retention as well. NPR featured Warner Enterprises, which raised wages to be competitive with other jobs that might be competing for the same workers, but beat trucking in the “lifestyle” category, and therefore could reduce the sky-high turnover rate trucking firms face. While the 90th percentile of truckers can make well over $60,000 per year, the median annual salary for all truck drivers is just $40,260 according to BLS numbers. Trucking wages have grown faster than the rate of most other industries, however general freight trucking still sees median wages almost $20,000 less than specialized trucking jobs for amusement and recreation, or express delivery services. This gap must be closed in order to attract more drivers into freight trucking.
By raising wages and improving the general work-life balance of a trucker, companies could also find themselves tapping into the underrepresented labor markets of women and veterans. Only 6% of truckers are female, a number which has gone up just 1.5% since 2000. Military veterans face staggering unemployment rates, which is why the American Trucking Association plans to hire 100,000 veterans. However, they must make the job just as attractive to veterans as any other group to meet that number.
Will autonomous vehicles help?
Looking down future roads filled with autonomous and connected vehicles can lead us to think that this problem will be solved when drivers are no longer in demand. However, with legislators and government agencies at every level struggling to piece together how driverless cars and trucks will be regulated, and companies still so highly invested in trucks that require a human behind the wheel, that “solution” may well be more than five years away.
With driverless trucks still off in the distance, the current shortage is stunting the growth of trucking companies and has the potential to get worse as the economy grows. The labor side of this market has made its position clear: the truck driving occupation in its current state is not attractive new drivers. The solutions? Experts have them identified, and let’s not think that companies will not let stagnation remain for too long before making these changes that will attract the drivers needed to grow their bottom line.
