Continued driver shortage requires creative approaches to fulfilling shipping needs

November 2015

By Lynn Gravley CEO

Goodness how things have changed since that 18 year old farm boy followed the grain truck up to the driver’s license office in order to get his commercial driver’s license, which eventually became a CDL. In 1980 the requirements to drive a truck were much different than they are today, and the number of people wanting to enter the profession certainly seemed to be more than today. The number of drivers, or actually more importantly, the lack of drivers, is certainly a hot topic in our circles today.

According to the American Trucking Association, approximately 70% of all freight tonnage (approximately 9.2 billion tons) moved in the US goes by truck. Concerns over truck driver shortages first began appearing in the third quarter of 2012. Today, that shortage continues to grow at an alarming rate, and is creating serious issues for the transportation industry. Even with a fairly high unemployment rate, companies struggle to find drivers. Experts in logistics credit the shortage to several factors impacting turnover in the truck driving industry.

The turnover rates for small truckload fleets increased to 95% during the last quarter of 2014. These turnovers are sometimes attributed to drivers leaving to work for large truckload fleets that have the ability to offer higher pay, signing bonuses, and better benefits. However, according to The American Trucking Association, even large truckload fleets experienced a 103% turnover rate in the second quarter of this year (2015) and some experts are predicting that rate could climb to 150% before the year is over. Even more surprising is that the turnover is no longer limited to long-haul drivers. Less-than-truckload and private fleets are also seeing a significant increase in turnover. With a shortage of experienced drivers, carriers find themselves competing against each other for the same resources and unfortunately, the underlying issues of truck driver turnover are complicated with no easy solution in sight.

One of the more often sited issues is the demographic of drivers. Many of the drivers are baby boomers who are retiring and companies are finding it hard to attract younger drivers to the industry. Current regulation (minimum age of 21) prevents the hiring of young drivers who are just out of high school and the college enrollment of Millennials continues to increase, thus decreasing the pool of age eligible drivers. However, even eligible drivers are becoming more difficult to find and keep.

In the past, many of the large fleets have attempted to reduce turnover rates by offering higher salaries, signing bonuses for experienced drivers, and increasing the amount of time a driver has at home between trips. Unfortunately, even these benefits cannot offset some of the more challenging aspects of a driving career.

Increasing the amount of home time a driver gets between trips is a complicated dance between providing the necessary benefit to a driver and managing costs associated with the necessary route to provide home time. These routes require optimum back-hauls, careful route planning, and staggered days off for a driver, which can wreak havoc on home life. The costs involved can skyrocket quickly and then must be passed on to the consumer. As companies seek to expand these types of benefits, they must also negotiate the costs that are ultimately passed on to distributors and consumers. Money and time for a personal life are often cited as negatives aspects when considering a job as a truck driver, but drivers needs also extend to proper equipment. Since truck drivers must often sleep in their work-spaces, having comfortable sleeping berths as well as a secure and comfortable environment for both work and sleep is critical. Regularly updating a large fleet is a huge expense for companies to maintain although these actions are necessary. The near record sales of class 8 trucks this year are perhaps indicative of just such a necessity. In addition to direct benefits, drivers require the same types of soft benefits that employees at more traditional jobs also need.

As employees who are rarely onsite, drivers deserve a clear and regular form of communication from their employers. Understanding expectations, clear rules and regulations, and perhaps most importantly, a dedicated avenue for support and feedback from the drivers to their managers is critical for a driver to feel like a true part of a team.

I have highlighted some of the known variables behind the shortage of truck drivers, but as I mentioned, the issue is complicated. In addition to these issues, regulatory changes and economic fluctuations also have a direct impact. For example, speculations based on anecdotal information suggest that when there is a housing shortage and building increases, the truck driver pool goes down because individuals are able to acquire jobs closer to home. Companies are faced with the challenge of both recruiting and retaining good, experienced truck drivers and unfortunately, no simple Band-Aid exists that will solve the problem.

The driver shortage has resulted in a significant increase in rail traffic. According to the Wall Street Journal, rail traffic was up 4.5% in 2014 and 28.7 billion carloads, containers, and trailers were shipped by rail. As a logistics provider, I strive to find creative ways to continue to support our carriers and our shippers through this increasingly difficult situation. We consistently seek creative avenues to provide capacity and efficient options for our clients and their supply chains. By utilizing both truck and rail, we can often provide our customers with a plan for successful logistical strategies.

Lastly, our personal goal at NT Logistics is to always treat each and every truck driver with the professional courtesy they deserve. These folks many times deny themselves and their families for our customers. We will continue to work with our customers and shippers to ensure that they are preparing for this shortage of drivers in many ways. One is by striving to become more of a “Carrier-friendly Shipper.” This is a phrase you really didn’t hear much before, but today it is necessity and a theme for successful shippers. We must find ways to treat these men and women that deliver our goods as the true professionals they are. In a future blog, I hope to explore some ways we go about this at NT Logistics. Until then, have a great day.