A better economy and higher safety standards have created two major challenges for trucking companies across the country trying to fill empty seats with safe drivers.
“Despite some estimates, I believe that in terms of raw numbers, the trucking industry is currently short somewhere in the range of 20,000 to 30,000 drivers. However, if we continue to see growth in freight volumes, we can expect that number to rise in the near future, exacerbating the qualitative shortage and creating a quantitative one,” said Bob Costello, chief economist for the American Trucking Associations.
Jim Crowell, director of the Supply Chain Management Research Center at the University of Arkansas, says over the next five to eight years thousands of drivers will retire, further complicating the issue.
“It will be interesting to see how the industry makes up that shortage,” Crowell said.
Companies like J.B. Hunt, USA Truck and others are already diversifying away from traditional truck load business moving more freight-to-intermodal transport and expanding their brokerage divisions that hire owner operators and smaller carriers to move freight orders on a per-load basis.
“There is still some extra capacity in the intermodal sector and more companies are trying to get into that game. Intermodal still requires truck drivers but most of them make fairly short runs and are home most nights,” Crowell said.
Longhaul drivers in short demand are those who are asked to spend extended days on the road, sleeping in the trucks which can be a lonely lifestyle, analysts say.
The American Trucking Association said the driver turnover rate for linehaul truckload fleets broke through the 100% barrier for the first time in more than four years. Among large truckload fleets — those reporting revenue in excess of $30 million — the driver turnover rate hit its highest level since pre-recession 2007. The sector reported a 106% employment turnover rate in the second quarter of this year. The last time the rate topped 100% was in January 2008.
“We continue to see steady, albeit sluggish, growth in freight volumes, which increases demand for drivers,” Costello said. “That, coupled with continued pressure on fleets to improve their safety records as a result of regulatory oversight changes, is increasing competition among carriers for drivers with clean histories.”
Crowell said the rule changes that limit the amount of time a driver can be behind the wheel also present a pay challenge for carriers trying to recruit new drivers.
“If a driver is paid for each mile and he is required to drive less hours a day then he won’t cover as much ground and his paycheck will be less. This requires carriers to rethink pay strategies in a highly competitive industry,” Crowell said.
Multiple messages left at J.B Hunt Transport, P.A.M. Transportation and Willis Shaw Express were not returned.
Costello said smaller truckload fleets posted a turnover rate of 86% in the second quarter, a 15-point jump over the previous period. The spike put turnover at its highest level since the third quarter of 2007.
“We have been contending that the driver shortage is by and large qualitative, rather than quantitative,” Costello said.
Crowell said the shortage will be something to watch closely as trucking/transports are vastly important to the state and regional economy.
In July, the Bureau of Economic Analysis indicated there were 60,000 jobs in the transportation and utility sector across the state. Jobs in this industry are trending higher since they bottomed out at 58,900 in 2010.
The Arkansas Trucking Association says they have roughly 125 member firms in their trade group ranging from small owner/operators to large national firms like FedEx Freight and J.B. Hunt Transport Services Inc.
The driver employment turnover rate for less-than-truckload fleets averaged just 9% in the second quarter, up from 8% in the previous quarter, according the Costello.
David Humphrey, spokesman for ABF Freight System, said it’s not uncommon to see some longline truckload carriers report 200% driver turnover rates during better economic times because many of them will be able to find jobs doing other things that allow them to be home at night.
He said less-than-truckload fleets like ABF typically see lower turnover rates because drivers can be home most nights given they make shorter dedicated runs.
“Last year if you take out or normal retirements ABF had driver turnover rates somewhere between 2% to 3%,” Humphrey said.
Crowell said carriers will continue to face some uphill challenges with respect to higher fleet costs and compensation issues in the face of a serious driver shortage, and that will only worsen as the economy improves.