So I covered the release of the 24thannual State of Logistics report yesterday (click here for more details) and found – much to my interest – that truck driver issues comprised a hefty portion of its material. Indeed, the growing shortage of truck drivers and resulting truck capacity crunch were cited by several of the panelists as a reason for the recent growth in demand for intermodal services.
“The retail industry is making a shift to intermodal where possible, as well as to more dedicated fleet operations with set routes,” explained Brent Beabout, senior VP-supply chain for Office Depot, during a panel discussion about the report held at the National Press Club this week.
The shortage of truck drivers “is forcing a network change,” he added. “We’re seeing more satellite distribution centers, more cross-docking, and more intermodal usage.”
Rosalyn “Roz” Wilson – senior business analyst with Delcan Corp. and primary author for the report – noted some other critical challenges where truck drivers are concerned.
“The trucking sector has been in a delicate balance for several years now, just on the breach of experiencing capacity problems,” she explained. “Utilization rates are at all time highs with load volumes on the rise but new regulations are expected to take a bite out of industry productivity, especially the new hours of service (HOS) rules from the Federal Motor Carrier Safety Administration (FMCSA).”
Wilson said the new HOS rules – due to go into effect July 1 – represent a theoretical 17% reduction in a standard work week for truck drivers and estimates on their actual impact fall somewhere between a 2% to 10% productivity decrease.
She added that carriers are still reporting difficulty finding enough drivers, with the industry right now short about 30,000. “The HOS changes could have the effect of a net 2% to 5% reduction in driver capacity, so projecting that out arrives at the need for another 100,000 drivers,” Wilson warned. “That is without an increase in volume.”
However, truck drivers represent a job category with the fewest potential workers trained to fill them, she stressed, with only about 17% of the current driver population under age 35 and a far larger portion of the driver population reaching retirement age.
Wilson also stressed that maintaining the current minimum age requirement for a commercial driver’s license (CDL) at 21 is also a creating a major problem in terms of recruiting a pool of potential workers.
“This is actually a big issue – we’re missing a huge piece of the population as they go to college or find some other avenue of work,” she said. “The industry also hasn’t done a good job in terms of changing the often negative image of the profession.”
Marc Althen, president of Penske Logistics – which helped sponsor the report along with the Council of Supply Chain Management Professionals (CSCMP) – added that increasing both driver pay and home time are critical to recruiting and retention efforts but also difficult in the face of rising logistics costs.
Many other issues related to the dearth of truck driver candidates came up as part of this annual report, including:
- Trucking companies used to sponsor more drivers in driver training programs, but tougher economic times did away with many of the programs
- Expanded unemployment benefits, coupled with what some call the underground economy, means many potential candidates for truck driving careers can get by on long-lived unemployment benefits supplemented with cash only jobs usually related to a personal service like lawn mowing, handy man work or childcare.
- Private fleets are attracting some of the most desirable drivers with better pay and working conditions.
- More drayage work is available because of the growth of intermodal, pulling drivers out of mainstream driver jobs because of the better hours. But loading delays could drive many away as fewer “turns” equates to less earning potential.
- Sign on bonuses and productivity or performance bonuses are becoming quite prevalent and grow higher with each passing day, with performance bonuses offering a “double benefit” by keeping drivers happy and improving the bottom line.
- The industry is not very successful in recruiting younger drivers because trucking companies have not done a good job of dispelling negative views of the job and do little to demonstrate a career path to drivers.
Paul Svindland, COO for Pacer International, also stressed that the regulatory impact on the truck driver labor pool must be addressed.
“The intent of such regulations is to make driving safer; however, the economic impact cannot be overlooked. Because when drivers work less, they make less,” he said.
By 2016, Svindland added, the shortage of truck drivers due to HOS reform and other issues could top 200,000 to 300,000. “We’re not sure of what the number will actually be, but it will be significant,” he cautioned.
All the more reason to start addressing the needs of truck drivers – for better pay, more home time, career options, etc. – now rather than later, when there just simply might not be many of them around.