Driver shortage creates quandary for trucking

Driver shortage creates quandary for trucking

A conspicuous shortage of truck drivers is creating a Catch-22 of sorts for the trucking industry, according to recent comments by carrier executives

A conspicuous shortage of truck drivers is creating a Catch-22 of sorts for the trucking industry, according to recent comments by carrier executives.

On the one hand, a lack of drivers is restricting the ability of trucking companies to expand and meet current freight volumes. Yet that same lack of drivers results in tight capacity, which is allowing fleets in many cases to get higher rates from customers and reject unprofitable business.

“Our results for the quarter were assisted by a favorable relationship between freight demand and truckload capacity,” said Steve Russell, chairman & CEO of Indianapolis-based truckload carrier Celadon Group.

“We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers,” he continued. “Assuming a continuation of the current freight environment, where growth in freight demand has exceeded increases in truckload capacity, we believe there will be opportunities to continue to raise freight rates faster than cost increases. Consequently, we continue to be confident in our ability to move to a 90% operating ratio or better.”

“A solid U.S. economy and a favorable relationship between shipping demand and truckload capacity contributed to a 5.9% increase in our average revenue per loaded mile,” noted Kevin Knight, chairman & CEO of Phoenix-based Knight Transportation.

“Solid productivity, improved fuel surcharge collection, and constant focus on expense control more than overcame cost increases relating to higher prices of revenue equipment, higher diesel fuel prices, declining fuel efficiency due to emissions control regulations, and increases in driver compensation,” he added.

“Customer demand for our services continued to be strong,” said Randolph “Randy” Marten, chairman and president of Mondovi, WI-based refrigerated carrier Marten Transport. “The combination of solid freight demand with limited industry-wide capacity and strong freight selection by our sales and operations team contributed to a 6.6% increase in our average freight revenue per total mile.”

Still, the growing lack of drivers is causing fleets a variety of headaches – especially in terms of the bottom-line impact.

“The limited availability of experienced drivers continues to challenge the trucking industry,” said Russ Gerdin, chairman & CEO of Coralville, IA-based Heartland Express. “We recently announced a driver pay increase for the third consecutive year and as a result our most senior and experienced company drivers will be earning 50 cents per mile while our owner-operators will be earning a base rate of 95 cents per mile by the end of 2006.”

Marten Transport reached even deeper into its wallet to try and shore up its driver base by making a big equipment purchase at the end of 2005.

“After evaluating our expectations for customer demand, the continued attrition of owner-operators from our industry and our ability to attract and retain company drivers, we decided to take delivery of 246 tractors during the fourth quarter last year, more than half of the increase for the entire year,” said Randy Marten. “But we believe that continuing to increase our capacity is important to major customers, and we wanted to make sure that we were prepared to grow with our customers in 2006.”

“The driver recruiting and retention market remains more challenging than ever,” said Clarence Werner, chairman, president & CEO of Omaha, NE-based Werner Enterprises. “The supply of qualified truck drivers continues to be constrained due to alternative jobs to truck driving that are available in today’s economy. Yet we believe that a solid freight shipping market … combined with extremely tight truck capacity is [maintaining] a strong freight market.”

TAGS: Operations
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