The new driver math

Nov. 1, 2010
Dealing with a driver shortage used to be fairly simple. If a fleet needed drivers, it really only took a nice sign-on bonus and some extra cents per mile to get applicants to line up at the door. Sure, over time, some might leave for what seemed to be greener pastures at other carriers, but by then there would usually be another group of potential recruits waiting for their chance at some up-front

Dealing with a driver shortage used to be fairly simple. If a fleet needed drivers, it really only took a nice sign-on bonus and some extra cents per mile to get applicants to line up at the door. Sure, over time, some might leave for what seemed to be greener pastures at other carriers, but by then there would usually be another group of potential recruits waiting for their chance at some up-front cash and a few more pennies for each long and lonely mile. Though this caused a lot of “churning” in the industry, it sure kept the trucks hauling freight and generating revenue … until now.

Now, the driver recruiting and retention game is being forever altered by a complex mix of factors that are all arriving at the very same time. A generational shift is reducing the overall number of workers, tighter driver regulations are shrinking the labor pool, and increasing demands for more “work-life balance” among current and potential drivers are combining with the across-the-board increase in trucking costs to put more pressure on recruiters than ever before.

The truck driver's job itself is also becoming far more complicated with an emphasis on technology like never before. “So much has changed in trucking that it's almost impossible to expect the same performance out of the next generation of drivers,” says Jamie Steele, director of fleet operations/recruiting for TL carrier Celadon Group. “You're dealing with far more traffic congestion, new regulations, and a public perception of the truck driving career that's very different from a decade ago.”

As a result, recruiting and retention strategies in 2010 and beyond need to be very different from those of the past, even those of just last year, believes Mike Hinz, vice president-recruiting for Schneider National.

The first piece of the new driver equation revolves around a generational shift in the U.S. workforce as a whole, with 77 million Baby Boomers set to retire over the next two decades. This change is complicated by the fact that those 77 million will be replaced by only 46 million new workers, according to numbers tracked by the American Society for Training and Development (ASTD).

ASTD's research indicates that Generation X workers typically value a strong balance between life and work, priding themselves on self-reliance and resourcefulness. Then there are Generation Y, or Millennial, workers who are more technologically savvy and desire even more workplace flexibility.

At the same time, noted Celadon's Steele, such “next generation” drivers will need to be educated about the fundamentals of trucking, since the pathways they're following into the industry are very different than in the past.

“Our ‘old school’ drivers typically came from trucking families, so they knew the importance of the basics, such as on-time delivery of freight,” he says. “New drivers though, by and large, are unfamiliar with such industry needs. Being 30 min. late, for example, might not be a big deal to them — ‘Hey, there was traffic.’ Well, 30 min. late is a big deal to a customer. We might be doing $10 million a year worth of business with them. And shippers call you on that and ask how you're going to fix it.”

Then there's a tighter regulatory net all drivers — current and wannabes alike — must navigate.

The Federal Motor Carrier Safety Administration's CSA, for example, is a safety regime set to go into full effect by this December. It's expected to slice as much as 5% from the available pool of truck drivers, according to Jason Siedel, director of equity research for Dahlman Rose & Co.


Factor in that “regulatory reduction” with 4% projected freight growth through next year, combined with the 25% to 35% reduction in trucking capacity during the recession and you've got the makings of an acute shortage of drivers by 2011 and one that is expected to grow to about 150,000 annually over the next few years, says Noël Perry, principal of research firm Transport Fundamentals and senior consultant with FTR Associates.

“Remember, to actually seat 150,000 drivers, you need to start by processing 1 million applications to get 175,000 to 185,000 qualified people into driver training programs — and you lose some of them along the way,” he explains. “Soon, we'll be right back where we were in 2004.”

“The convergence of regulations in late 2011 and 2012 — from CSA, new hours-of-service regulations, and driver identification requirements — will put a lot more pressure on the supply of drivers,” adds Max Fuller, co-chairman & CEO of TL carrier U.S. Xpress Enterprises.

That's just the tip of the regulatory iceberg, notes Annette Sandberg, CEO of TransSafe Consulting and FMCSA's former chief administrator from 2002 to 2006.

With new HOS rules reportedly set to reduce drive time from the current 11 hours down to 10, mandate a significant “rest break” during the workday, and change the 34-hour restart provision to 48 hours or greater, more drivers will be needed to compensate for more time-constrained working conditions, she explained at the FTR 2010 Transportation Conference earlier this fall.

Such a reworking of HOS rules alone would pose challenges to truckers, she pointed out. Yet this is but one of nearly 40 new regulations being put in place now or within the next few years, and dealing with such a massive slab of new rules in such a short time frame will significantly alter the underpinnings of the trucking industry, Sandberg stressed.

“It's not just CSA or changes to HOS. It's also about the new pre-employment screening procedures [PSP] that began in May 2010; new entrant regulations put in place December 2009; EOBR [electronic onboard recorders] mandates; and new entry-level driver training requirements due January 2011, just to name a few,” she said.

“You have to look at the regulatory ‘ripple effect’ from this broad context; if all of these come out on schedule in the next few years, they'll have a significant impact on trucking,” Sandberg noted.


Another factor is that the ability to view driver records via the Internet through the reporting requirements within the new PSP and CSA rules will put shippers “on the hook” like never before in terms of liability for trucking accidents, warns Donald Broughton, managing director and senior transportation analyst with Avondale Partners.

“It falls under ‘negligent hiring and entrustment.’ If the driver's record is out there available for viewing in an easy manner, shippers will be denied ‘cover’ in terms of saying, ‘Hey, that responsibility is on the carrier, not me,’” he says.

Sandberg explains that this “liability factor” may shift freight patterns as a result. “Some shippers may start shifting more freight to brokers in order to screen themselves further off from liability,” she said. “This is one reason why shippers need to be more involved in commenting on proposed trucking regulations, especially in terms of the impact on costs.”

Another important wrinkle in all of this comes from the drivers themselves — an insistence on better “work-life balance” when it comes to the job of piloting a truck.

“Drivers willing to stay out on the road for three weeks or a month at a time are few and far between. They are a dying breed,” says Celadon's Steele. “They want more time with their families, but it's not just about being home. It's about being home when they need to be home. It's no good to get them home on a Sunday when their child's high school graduation was on Saturday.”

“That work-life balance is the number-one issue for us right now,” adds Gary Short, senior director of recruiting for Ryder Transportation Systems. “We're looking at all our route designs to have drivers home as frequently as possible. Pay and benefits, of course, will always remain important, but we're finding drivers will trade some of that for more home-time. ”

Celadon, for one, is trying to re-craft its routes so drivers are out a maximum of 10 to 14 days before getting home, creating a more “regional” home-time structure out of Celadon's long-haul operation, where the average length of haul still hovers around 900 mi.


The key to making this work is for drivers to live in the main freight lanes served by the company, Steele said, which is largely the Midwest and Texas, with border-to-border connections to Canada and Mexico. “If a driver lives in Dallas, for example, the chances are very high he'll be home every 10 days to two weeks,” Steele says.

While the candidate's work history and driving record remain critical, Brett Terchila, director of operations at Transport America, says other key points now include technological know-how such as working laptop computers and inputting data into electronic onboard recorders, as well as job expectations.

“A big piece of what we're doing is an ‘expectation exchange,’” he notes. “We want to know what the driver expects of the job and to convey to them our expectations. We set standards on both sides, for them and for us, at the outset.”

Transport America also now measures a conglomeration of metrics — safety, on-time delivery, out-of-route mileage, idle time, and fuel economy — that it shares on an ongoing basis with its drivers. “Our goal is to coach drivers to achieve what we need,” Terchila explains. “We put a lot of emphasis on training our fleet leaders in order to help them engage with drivers, to create a more positive give-and-take to change behaviors instead of marching them out the door.”

It's also about offering drivers more choices as they progress through their careers, says Schneider National's Mike Hinz. “Job choice is also going to be a big deal. We find drivers may start out wanting to drive coast-to-coast, to see the country, then as a family comes into the picture, want to stay home more often,” he notes. “Having long-haul, regional, and dedicated contract carriage operations all under one roof … gives drivers more options to match changing lifestyle needs.”

One broader change that's actually helping truckers is that freight is now becoming far more regionalized, Hinz adds. “It used to be we focused on finding coast-to-coast or long-haul drivers. Now, more manufacturers want to shorten their supply chains, so we're witnessing a boom in regional freight,” he explains. As a result, Schneider National aims to hire 2,500 drivers by the end of this year for its five regional operations: West, Southwest, Midwest, Southeast and Northeast.

“The customer demand for our regional service has exceeded our expectations and created enough freight density to get [these] drivers home weekly,” Hinz noted. “And that helps, as work-life balance is more important than ever to today's professional truck driver.”

One would think that this would speed up an influx of younger workers into an industry where the average age for truck drivers now hovers at 47. But Hinz says that's not been the case.

“We will always need younger drivers, but right now we're actually seeing older workers who are transitioning from other industries, from job losses due to the recession, and just the chance to try something new,” he points out. “Veteran workers with their career experiences in many cases are better able to handle the challenges and conflicts of the job.”


Getting younger people, especially the under-35 crowd, to choose a career behind the wheel of a big rig is also tougher because the job's pay has steadily declined relative to the cost of living, notes Keith Klein, COO and executive vice president for TL carrier Transport America.

“Twenty years ago, truck driver pay was significantly more competitive relative to similar jobs across a variety of industries,” he says. “Over the last 10 to 12 years, though, driver pay has been relatively flat and in many cases has actually declined over the last eight to 10 years.”

One fleet noted that a truck driver should make $65,000 to $70,000 per year based on the demands of the job; however, the annual average pay actually hovers around $45,000. That's partly due to how hard it's been for fleets to raise rates since the industry was deregulated in 1980, says Max Fuller of U.S. Xpress. “Since deregulation, rates have only gone up 2% a year, so we [trucking companies] have had to reduce costs to make money,” he says. “Now we've about run out of ways to do that.”

Yet fleets recognize that they'll have to shell out more to attract people into the driver's seat, Fuller notes. For example, Fuller said it would require a base pay increase of 4 to 6¢/mi. plus a $5,000 sign-on bonus just to increase the U.S. Xpress driver corps by 5% today.

Even more is required for specialized jobs, such as hauling hazardous materials and team operations. Schneider National, for instance, offered a $10,000 sign-on bonus to experienced teams ($5,000 per team driver) in September of this year in an effort to beef up its ranks in that segment, along with 6¢ more per mile than solo drivers, priority dispatch, assignment of late-model tractors, and 99% no-touch freight.

Still, even with all the challenges facing fleets as they try to find and keep drivers, Celadon's Steele believes the truck driving profession still offers some advantages over traditional 9-to-5 jobs that may appeal to the more flexible nature of next-generation workers.

“The freedom of the road appeals to most next-generation workers seeking a very flexible work environment,” he says. “They are not stuck behind a desk or on an assembly line all day. They are out on the road, in a different place every day. Those are just some of the factors that can still make driving a truck an attractive career for many.”


The vacation factor

One way Indianapolis-based TL carrier Celadon Group is trying to make driving a truck a more attractive profession is through a unique “vacation time” package.

A Celadon driver receives one week of paid vacation time for every 30,000 mi. accumulated, notes Jamie Steele, director of fleet operations/recruiting. Clock in 126,000 mi. in a calendar year, and they get a fifth week of paid vacation, time they can also “cash out” if so desired, he stresses, in case they need money to cover a large repair bill for their home or personal vehicle, for example.

“Drivers can bank up to three weeks of vacation as well, and they can use it where they like it,” Steele notes. “Some carriers restrict vacation to just the home address and one alternate location. Our drivers can use it where they like it; that appeals to the older ‘nomad’ driver, allowing them to use a week in Seattle to visit their mom, then a week in Detroit to visit their uncle, for example.”

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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