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New solutions being aimed at driver shortage

Aug. 4, 2014

Pay increases, switching over to more dedicated operations, even the deployment of detailed “wants and needs” surveys are just some of the new efforts being undertaken by fleets to try and find ways to solve the ongoing driver shortage issue.

For example, a new truck driver survey crafted and deployed by logistics conglomerate National Retail Systems (NRS) – the parent company of Keystone Freight Corp., National Retail Transportation, and other retail-focused trucking firms – seeks to identify and hopefully dismantle major roadblocks in the truck driver recruiting and retention process.

Chris Saville, marketing director for NRS, told Fleet Owner that the company’s ongoing survey effort – which to date has polled about 1,000 drivers – so far has determined the biggest issues about the truck driving career remain pay, home time, and benefits.

Saville added that to date NRS is finding it far easier to recruit for local truck driver jobs in its network versus regional and long-haul positions. “It’s not necessarily ‘easier’ per se to recruit drivers for any position today,” he stressed. “It’s just easier by comparison to fill local trucking jobs where home time is more frequent versus long-haul jobs.”

Large carriers continue to focus more effort on finding ways to solve the driver recruiting/retention issue. For example, Kevin Knight, chairman and CEO for TL carrier Knight Transportation, noted in the company’s second quarter earnings release that developing and retaining high quality driving associates remains a significant challenge to the industry.

“Despite a strong freight environment, the current driver supply situation has been a headwind for adding additional capacity,” he said. “[Thus] our driver development and training programs remain a primary focus area for our management team.”

The problem is particularly acute as data tracked by the Bureau of Labor Statistics (BLS) indicates the industry still hasn’t replaced all the driver positions lost during the “Great Recession.” According to the agency’s figures, the number of active truck driving positions shrank by 13.4% between 2007 and 2010, while only rebounding 8.1% from 2010 until now.

Swift Transportation recently rolled out a new multi-pronged effort to improve its driver recruiting and retention efforts that includes pay raises and the development of more dedicated operations.

“We are instituting a large driver pay increase in the third quarter [and] if current driver shortages continue, driver wages may continue to increase, but probably not to the extent of the increase we are giving this year to our drivers,” said Jerry Moyes, Swift’s founder and CEO, during the carrier’s second quarter earnings conference call with analysts and reporters.

“The dedicated business is much more driver friendly,” he added. “It's more consistent, predictable and generally allows for more regular home time. All of which are desirable in a difficult driver retention market like that which we are facing today. [That’s why] we are currently talking to our customers about the need to get more money in the hands of our drivers.”

Swift – which currently employs 14,700 drivers along with some 5,000 contracted owner-operators – noted that revenue per loaded mile increased 3.7% on average in its TL segment, with the carrier expectation that rise further  in the latter half of the year by 4% to 5% as it boosts rates in order to cover the cost of its driver pay increase.

“The driver [pay] increases we are talking about are more like a step function and will increase immediately while the rate increases from customers and other operational improvements that are expected to help compensate for this increase will occur over time,” noted Ginnie Henkels, Swift’s executive VP and CFO, on the call.

“It is no secret that capacity is extremely tight in the market right now and our customers know it costs more to secure capacity today,” she added. “We were successful in getting the rate increases on a number of our lanes while keeping them out of the bid process.”

Richard Stocking, Swift’s president and COO, also noted on the call that the driver market is tight and not trending favorably. “Driving is a tough job where you spend a lot of time away from home and family and it deters a lot of people,” he explained, which is why Swift is boosting driver pay - though he would not say by how much.

“We want drivers to start with Swift in our schools and remain with Swift until they retire. We want to deliver a better life to our drivers because they deserve it,” he said. “By taking care of our drivers, they will take care of our customers, who need us now more than ever, and by taking care of our customers, they should take care of you, our shareholders.”

Yet Gordon Klemp, founder and president of the National Transportation Institute, stressed in a conference call hosted by Wall Street investment firm Stifel, Nicolaus & Co. back in June that even the “adventurous, free-spirited individual looking to see the country” may no longer be a good fit for a truck driving job in today’s environment.

He noted that the more restrictive nature of the truck driving position today may be partially to blame as individuals now often must:

  • Drive only specifically “optimized” routes and fuel at only specified locales;
  • Rest/sleep only at specified times and places;
  • Cope with engine speed governors typically set at 63 mph;
  • Agree to be continuously monitored increasingly by in-cab event recorders/cameras;
  • Be paid on the basis of safety, productivity, on-time pick-ups and deliveries, plus fuel efficiency;
  • Be away from home for prolonged periods while conducting most of his/her job functions in the absence of any co-workers or companions.

“And all of that must be endured for a reasonably pedestrian annual compensation of plus or minus $50,000 per annum,” Klemp said. “Sounds like fun, right? No wonder a growing shortage exists [for] the job is less psychologically rewarding than it used to be, at least for many adventurous truckers from the years gone by.”

NRS’s Saville noted that his company is working to try and develop more “flexible” schedules to enable truck drivers to be home more often at times they desire, while also casting a broader net through different communication mediums to find new and willing recruits.

“Recruitment in the year 2014 is not like how it was 20 years ago where one newspaper ad would suffice to hire your operation's needs,” he explained. “Today's recruitment efforts are a full-out campaign, which includes hiring fairs, flyers, banners, multiple recruitment sites, blogging, a social media presence, targeted emails, and mobile application optimization to name a few.”

Saville added that industry leaders are well aware that without a revolving door of drivers, carriers cannot meet customer demands, which ultimately affects consumers who will feel the impact when they go to the store and see aisles of empty shelves.

“The cold hard fact of the matter is that truck drivers keep our economy moving, and the fewer that enter the workforce the greater the demand is to hire drivers,” he said.

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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