A Driver Shortage With No End In Sight
AUGUST 31, 2015
Trucking is essential to the U.S. economy. According to the American Trucking Associations (ATA), approximately 70% of all inland freight in the United States is carried by trucks. Accordingly, the trucking industry is vital to nearly every segment of the economy. As the economy grows, so too does the demand for additional trucks to carry goods and equipment across the nation. However, there is a shortage of truck drivers to deliver these goods.
By industry estimates, there currently is a shortage of somewhere between 35,000-40,000 truck drivers in the United States. In 2012, the ATA estimated that the shortage has the potential to reach approximately 240,000 drivers over the next decade. Not only is there a shortage, but turnover is high. The turnover rate for long-haul trucking companies has recently been as high as 96%. Recruiting and training new drivers is a significant human resources and financial burden on the industry. Currently, the average driver is approximately 50 years in age. As older drivers retire, fewer and fewer younger employees enter into the industry. The ATA estimates that the trucking industry needs to recruit 100,000 new drivers each year to keep up with the growing demand.
There are several factors which seem to be contributing to why many individuals are not entering the trucking industry. For many, it comes down to the lifestyle. Many young workers prefer to be closer to home and on the road less. Also, 18, 19 and 20 year old truck drivers can only operate within the borders of their state. Federal law prohibits drivers crossing state lines unless they are at least 21. Rather than explore a career in trucking, many 18 to 20 year olds are joining the trades and other industries. Currently, there is a bill in the Senate that would allow neighboring states to participate in a pilot program. Under the proposed program, drivers under 21 could travel 100 miles into neighboring states. The proposed program would open many routes, particularly in the northeast. However, it has its detractors, who fear that a younger driving age will lead to an increase in accidents. Equipment costs have also increased, making it more difficult for owner-operators to get into the industry or obtain financing to purchase a tractor. Increased regulations also play a role for some, as they may be ineligible to drive.
To combat the shortage, the industry has taken several steps. Most notably, pay has been increased. Also, many companies are now offering sign-on bonuses. Some companies have noted that there is little room for advancement, and some are recruiting management from within the driver ranks as a way of retaining and recruiting talent to the industry. While there is no substitute for home, many companies are making the road more comfortable by upgrading to newer tractors. Some include the capacity to have pets and offer kitchens, in addition to increasing fuel economy.
However, these improvements do not change the fact that drivers are often away from home two to three weeks each month. Some companies have increased the number of trailer yards and started load swapping programs to split long hauls. Driver one drives to the trailer yard, drops his cargo which is then picked up by driver two, while driver one returns with a load to his home region. Others are exploring flexible work arrangements and schedules. Advances in technology are offering another potential solution. Companies like Cargomatic work to increase efficiency by utilizing a software app that functions much like Uber for truck drivers, allowing them to haul more efficiently, thereby making more money and working at their own pace. Long-term solutions include automation, where trucks are driven, primarily in less populated sections of the country, by themselves, and then by human drivers when nearing more heavily populated areas. Due to safety concerns, the need for advanced technology and regulations, it will likely be many years before we see trucks operating without drivers. However, many believe this is the future of trucking and is a matter of when, not if.
Unfortunately, there does not appear to be any one solution for the driver shortage. Pay and bonuses are increasing, yet the shortage continues to grow as older drivers retire and younger drivers do not fill the gap. If the economy continues to improve and the shortage grows, consumers will ultimately feel the pinch. As transportation costs rise, so too will the price of goods and equipment. While there is not one solution to the shortage, it is clear that costs will rise as a result of it.