Driver shortages at issue in 1Q reports

Driver shortages at issue in 1Q reports

Driver shortages at issue in 1Q reports

Even though many carriers are reporting increasing revenues and profits, driver shortages continue to dog trucking executives.

“The driver recruiting market continues to be extremely challenging,” said Clarence Werner, chairman, president & CEO of Omaha, NE-based truckload carrier Werner Enterprises. “The supply of qualified truck drivers in our industry remains visibly constrained due to alternative jobs that are becoming available with an improved economy [coupled with] stagnant demographic growth for the industry's targeted driver base over the next several years.”

As a result, Werner expects the tight driver market will make it very difficult for truckload carriers, both large and small, to add meaningful truck capacity in the near future.

“It’s a very tight driver market and it’s going to continue to be so for the rest of this year,” John Hancock, director of training and driver recruitment for Springfield, MO-based Prime Inc. told Fleet Owner. “As a result, capacity is going to remain tight for 2005, since growth is being constrained by a lack of drivers.”

“The market for hiring drivers is tight and our salaries, wages and employee benefits and other expense lines reflect the additional costs required to keep our tractors manned,” noted Robert Powell, chairman & CEO of Van Buren, AR-based USA Truck.

Even though truck freight grew a scant 0.4% year-over-year in February -- substantially below the 5% to 6% increases seen in the first half of 2004 -- truck capacity continued to remain tight, said Eric Starks, president of Nashville, IN-based economic analysis firm FTR Associates.

“Preliminary estimates show that U.S. tractor capacity in use fell slightly in the first quarter of this year but is still at historically high levels,” he explained. “With a preliminary reading of 95.7% recorded in the first quarter of 2005, tractor capacity has averaged 95.4% over the last six quarters. This is substantially higher than the previous peak seen in the first quarter of 1998 when it posted a reading of 91.2% and significantly higher than its historical average reading of 85%.”

That, in turn, continues to put pressure on trucking companies to find drivers.

“Driver availability continues to be a serious concern for the segment, as well as the industry,” said Kirk Thompson, president & CEO of Lowell, AR-based truckload giant J.B. Hunt. “Increases in driver pay over the last few months have resulted in only marginal improvements in driver supply. We see no signs of fundamental improvement in driver availability for the foreseeable future. Therefore, we do not anticipate significant capacity additions in the truckload marketplace in the near term.”

The key to getting enough drivers onboard – and keeping them – remains a combination of good pay and good treatment, Prime’s Hancock told Fleet Owner.

“Anyone who says pay is not the major issue for drivers today is delusional,” he said. “It’s always about the pay. But it’s also about getting excellent pay and excellent treatment at the same time – that’s the key to retention.”

Hancock pointed to Prime’s new pay structure as an example, which allows drivers with 12 to 17 months of experience to start at 35.5 cents/mi., and earn up to 62.5 cents/mi., which includes all bonuses and programs such as fuel surcharge and driver training benefits.

“This recognizes and rewards drivers based on their number of years driving and credits experienced drivers with mileage driven for future pay increases,” Hancock said. “When you ask the question, ‘why is it such a tough driver market?’ the answer is pretty simple: looking at this career long term, the hype can dissolve overnight to stay in it if the earnings and good treatment aren’t there.

“So that means we as carriers have to put our money where our mouth is to make sure they stay happy in their jobs,” Hancock added.

TAGS: Operations
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