Truck transportation jobs stagnated in July at 1,358,600, according to seasonally adjusted preliminary data released by the Bureau of Labor Statistics. Drivers traditionally comprise just over half of these jobs, which underscores that carriers aren’t adding as many drivers as expected at a national scale.
The preliminary data marks the first time since September 2003 that the trucking industry has not expanded its payroll.
Bob Costello, chief economist for the American Trucking Associations (ATA), said that the industry’s inability to expand capacity at a rate that paces freight demand continues to be a serious problem and shows no sign of abating in the foreseeable future.
“There will be driver shortages in the months coming,” Costello said. “Even though national job growth has been disappointing, trucking is still doing very well, and that’s because manufacturing is doing very well.”
The buzzing manufacturing sector is reaping the benefits from recent strength in consumer spending, low inventories, and business spending. However, this creates a double-edged sword for trucking as the driver market is being tapped out.
(See Consumers Get Thrift as Manufacturing Accelerates)
“Unfilled orders are continuing to grow, freight in the pipeline is growing, and tax incentives at the end of the year are leading to businesses doing a lot of capital investments,” Costello said. “Tonnage is going to continue to be robust and driver shortages will continue to be in the queue as well.”
ATA is currently investigating “structural issues”— factors such as long trips away from home, insurance companies’ criteria to insure new drivers, and regulations that require drivers to be 21 to haul interstate freight— and their effect on driver shortages.
“They may not necessarily be bad things, but these structural issues are playing a major part in driver shortages,” Costello said.
Chris Brady, president of Commercial Motor Vehicle Consulting, concurs that with freight demand continuing to mount as new drivers trickle in, shortages are here to stay. “Because freight is going to continue to grow at relatively strong rate and carriers will continue to be under pressure to expand capacity, expanding capacity and fleets is a difficult process,” he said. “I’d say at least through the end of the year there will be an imbalance of drivers and the capacity that fleets need.”
Notably, although Class 8 truck sales are booming, OEMs cite pent-up demand due to delayed replacement cycles rather than fleet expansion. “For example, if retail sales come up to 200,000 trucks and replacement demand calls for 150,000 trucks that leaves 50,000 more trucks for expansion. Out of a nationwide fleet of 2.1-million Class 8 trucks that’s miniscule,” Brady said. “Next year we’ll see larger growth— once you hit the next phase and the replacement cycle is complete, that’s when you get to expansion.”
However, based on the recent wave of job and personal income data, it is unlikely that the U.S. economy will be able to regain its fevered growth during the first quarter, ATA’s Costello said.
“We [the economy] are no longer in a recovery phase where growth tends to be fast— we are in an expansion phase,” Costello said. “In an expansion phase you can’t be thinking that every month is going to be a stellar point— we’re at that point.”
