The University of Arkansas at Fort Smith is one of hundreds of institutions around the country trying to help address a growing truck driver shortage, and the slowdown in the U.S. energy industry has helped a regional Arkansas carrier fill some of its open driver positions.
Analysis made public Oct. 6 by the American Trucking Associations indicates the shortage of truck drivers has grown to nearly 48,000 and could expand because of expected growth in freight demand and a retiring workforce. The 12-page analysis said the driver issue is the trucking industry’s biggest problem.
“The ability to find enough qualified drivers is one of our industry’s biggest challenges,” ATA President and CEO Bill Graves said in the report. “This latest report plainly lays out the problem – as well as some possible solutions – to the driver shortage.”
Key findings in the report include:
• By the end of 2015, the driver shortage will reach nearly 48,000. If current trends hold, the shortage may balloon to almost 175,000 by 2024;
• Over the next decade, trucking will need to hire 890,000 new drivers, or an average of 89,000 per year;
• Roughly half, 45%, of demand for drivers comes from the need to replace retiring drivers; industry growth is the second leading driver of new hiring, accounting for 33% of the need; and
• Fleets consistently report receiving applications for open positions, but 88% of carriers said most applicants are not qualified.
“Our work shows the great and growing need for drivers,” Costello said, “but we also highlight several solutions including increasing driver pay, getting drivers more time at home, as well as improving the image of the driver and their treatment by all companies in the supply chain. Make no mistake, the driver shortage is a challenge, but it is not an insurmountable one.”
The report said driver mistreatment is common.
“Compounding the already difficult lifestyle, drivers often complain of mistreatment at shipping and receiving facilities. Complaints range from restricting access to restrooms to having to wait extended periods of time before the trailer is loaded or unloaded,” noted the report.
ATA officials also suggest the industry look beyond recruiting men. The report said females make up 47% of all U.S. workers but are only 6% of all truck drivers, according to the U.S. Department of Labor.
“The share of female drivers has remained stagnant between 4.5% and 6% since 2000. This is a large, untapped portion of the population,” the report noted.
The retirement issue was a hard hit for Fort Smith-based Carman Inc. The family-owned regional trucking company is celebrating its 30th year and operates 45 tractors. Greg Carman, company president, said the carrier has over the years been able to avoid driver shortage issues because of good pay, good equipment and “consistent home time” for drivers. But earlier this year a wave of retirements changed the picture.
“We have had an excellent base of mature drivers with long tenure that were stable and dependable. However, in early 2015 we found ourselves with six drivers retiring over a period of a few months. They certainly earned their right to retire and we are happy for them, but it has been challenging to replace them,” Carman said. “Several very good applicants came from the slowdown in the energy field. They are very hard workers, but if that industry comes back they might leave to the big earnings they were formerly used to.”
Carman also said the growth in federal regulations could make it difficult for the overall trucking industry to recruit and retain drivers.
LARGE FLEET PROBLEMS
Larger carriers like Van Buren-based USA Truck and Little Rock-based Maverick USA also are struggling with driver issues. USA Truck noted in its most recent quarterly earnings report that it has “significant room to improve” its driver retention. The company ended the first half of 2015 with an average of 2,119 tractors, down from a 2,218 average during the first half of 2014. The average number of seated tractors – trucks with drivers – was 1,929 in the first half of 2015, down from 2,040 during the same period of 2014.
Maverick, which operates more than 1,400 tractors, in January boosted its pay so that experienced drivers could make up to $66,500 a year. Students with less than six months of experience are able to average $53,000 in their first year.
Lowell-based J.B. Hunt Transport, a large national intermodal and logistics company, was clear in a recent federal filing about what a shortage of drivers could mean for its bottom line.
“If we are unable to attract and retain the necessary quality and number of employees, we could be required to significantly increase our employee compensation package, let revenue equipment sit idle, dispose of the equipment altogether, or rely more on higher-cost third-party carriers, which could adversely affect our growth and profitability. In addition, our growth could be limited by an inability to attract third-party carriers upon whom we rely to provide transportation services.”
Maverick also partners close with a commercial driver license (CDL) course taught by the Center for Business and Professional Development at the University of Arkansas at Fort Smith. Dave Robertson, president of the center, said they are placing 96% of students who pass the four-week program. The program is funded in part by a federal grant seeking to find jobs for veterans and dislocated workers.
Robertson said 43 people have obtained a CDL in the last 12 months, and that’s up between 15%-20% from the previous 12-month cycle. He expects that pace of growth to continue for the near term. The school also has worked with 85 employed drivers to boost their skills.
“We’ve had to add instructors. It’s been very very busy,” he said.
In addition to Maverick, trucking operations who also seek to recruit graduates of the CDL course at UAFS are US Xpress, Werner and Knight Transportation, Robertson said. Classes are full through January. Tuition is around $2,700, with qualifying applicants able to get 100% of that paid by the federal grant.
A driver shortage also leads to higher turnover rates. An Oct. 13 report from the American Trucking Associations found that turnover at large truckload fleets rose three percentage points in the second quarter of the year to an annualized rate of 87%.
“While below recent averages, driver turnover is still high and a sign of a very competitive market for qualified drivers,” ATA Chief Economist Bob Costello said in a statement. “We repeatedly hear from carriers that they are unable to find enough qualified drivers, leading to fears of a growing driver shortage and these numbers reflect that.”
Turnover at smaller truckload fleets, those with less than $30 million revenue, fell seven points to 76%, its lowest mark since the third quarter of 2013. Turnover at large fleets is at its lowest point since the second quarter of 2011 and below the 2014 average of 95%.