Driver Shortage: How Trucking Companies Are Curbing the Quandry
According to American Trucking Associations, moving 9.2 billion tons of freight annually requires nearly 3 million heavy-duty Class 8 trucks and over 3 million truck drivers. The issue of a driver shortage in the trucking industry is not one that is unheard of; a 1998 Monthly Labor Review report indicated that deregulation led 586,000 new trucking employees to enter the industry between 1980 and 1994. Here a few ways that trucking companies are battling capacity constraints.
Recruiting younger drivers, minorities, and veterans. The average age of truck drivers is 49 years old, and much of the current turnover rate is attributed to retirement. As demand for qualified drivers ramps up, the industry is looking to the younger generation to fill the roles. A comparison between the average age of truck operators, construction and service employees, and the total workforce in the United States is shown in the chart below.
To incentivize new drivers in the younger age cohorts, some companies such as C.R. England and Crete Carrier are offering free commercial driver's license (CDL) training, job opportunities after completion, and improving benefits such as time at home and retirement plans. Other recruiting methods include new safe driver and performance-related rewards, pet-friendly trucks, and first-year career advancement opportunities to retain employees.
“Millennials aren’t going to like the idea of being ‘owned’ for this certain time of the day,” said Dana Hook, past chairman of the Women's Transportation Seminar in an interview with American Shipper. “They don’t like offices. They like flexibility. That’s not necessarily going to appeal to truckers in the current structure. Is there technology available to connect you with more drivers when you need them? Can we in transportation look to flexibility of Uber-type technology to bring different people to be a part of the supply chain?”
In addition to targeting younger drivers, carriers are increasing efforts on recruiting women and minorities. Representatives from organizations striving to promote inclusiveness in the transportation industry say that talent across all demographic categories should not only be captured, but could also help to alleviate the driver shortage.
According to the Bureau of Labor Statistics, women comprise only about 6% of the driver population and 38.75% are minorities. Groups such as Women in Trucking and the National Minority Trucking Association (NMTA) hope to serve as connectors within the trucking industry, engage these segments of the workforce, and increase the number of respective drivers. NMTA launched a jobs initiative to create 500,000 transportation jobs by 2025 by connecting potential drivers, technicians, and other transportation workers with trucking and logistics companies.
Paying drivers more. The Driver iQ 1st Quarter Trends in Truckload Recruiting and Retention survey reports that more than 90% of carriers that generate more than $30 million in revenue believe a salary of $75,000 or more is necessary to attract and retain truck drivers. As for the smaller carriers, fewer than 70% of respondents felt that driver salaries needed to be over $75,000. The Bureau of Labor Statistics found that driver pay, when adjusted for inflation, should be $111,000 per year after the industry was deregulated in 1980.
The survey also found that, despite unrest about the ELD mandate and hours of service requirements, total compensation was the top reason for driver turnover in the first quarter of 2018. Other causes of driver turnover are shown in the chart below.
With current compensation based on miles driven, matters can be complicated when drivers are found waiting hours waiting to get into shipping ports or waiting for services to be performed in the event of a breakdown.
To attain attract new recruits and retain current drivers, a growing list of operators are increasing pay. These motor carriers are implementing policies such as a guaranteed annual salary to provide a consistent income regardless of the amount of miles traveled, as well as additional compensation and bonuses. Other companies are improving per-mile pay for drivers with pay increases as experience grows.
According to Transport Topics, 60% of carriers in the Trends in Truckload Recruitment and Retention survey said they have raised their cents-per-mile pay. What's more, over 50% have implemented performance bonuses and about 11% are implementing a guaranteed weekly wage. Less than 10% said they had not raised compensation levels. No one in the survey expected salaries to decline.
Keep current drivers healthy. In the results of a study that interviewed 1,670 drivers about their health and work practices, the National Institute for Occupational Safety and Health (NIOSH) found long-haul truckers were twice as likely to be obese compared to the adult working population.
If a driver can get such conditions under control, it will improve their entire life.
Additionally, it was determined that long-haul truckers are more likely to smoke tobacco and suffer from other risk factors for chronic disease. Of this group, it was determined that 69% were obese, 54% smoked, and 88% reported having at least one risk factor (hypertension, smoking, obesity) for chronic disease.
To retain talent and foster rapport, several carriers have invested in driver health and wellness programs. For example, Schneider offers a range of services to drivers including a “nurse line” to call into, physical therapy, lifestyle and wellness coaching, screening and treatment program for obstructive sleep apnea, and access to fitness centers and walking trails at many of the carrier’s facilities.
“If a driver can get such conditions under control, it will improve their entire life,” says Christine Schneider, Health and Wellness Manager in an interview with Truckinginfo. Although it is difficult to find the true ROI of the program, "...we all share the road together. Helping improve driver health and wellness is the right thing to do.”