Driver shortage persists amid COVID-19 pandemic, mixed freight demand

Carriers in Arkansas continue to struggle with driver shortages, and the issue is again their top concern in 2020.

Nationwide, carriers ranked the driver shortage as the No. 1 issue in the trucking industry, according to a recent survey completed by the American Transportation Research Institute (ATRI), a nonprofit research organization of American Trucking Associations. And a similar survey for Arkansas showed the shortage remains the top issue for carriers in the state in 2020, said Shannon Newton, president of the Arkansas Trucking Association.

“Many of our carriers are saying this is the worst the driver shortage has been since the early 2000s shortage, if not ever,” Newton said. “We have the same systemic problem with the pipeline of potential drivers today that we had over a decade ago: aging driver population, underrepresentation of women and minority drivers and job market competition.”

The average driver age in the for-hire, over-the-road truckload industry is 46, and the average for less-than-truckload and private carriers is higher, according to reports by the American Trucking Associations.

“In addition to targeting a younger demographic, we’ve made strides in recruiting women and minorities,” Newton said. “However, they still only account for 6.6% and 40.4%, of all drivers, respectively.

“The driver shortage is further driven by the strength of the U.S. job market overall. Pre-pandemic, truckers and would-be-truckers could have their pick of jobs and along with it, wages and benefits. Because of the 21-year-old interstate driver requirement, we’re really missing an opportunity to recruit straight out of high school,” she added. “We’re hopeful to see the results of a pilot program currently underway with the FMCSA (Federal Motor Carrier Safety Administration) that would allow 18-year-olds to enter the industry.”

At the start of the pandemic, freight demand declined as lockdowns reached a peak, Newton said. However, freight volumes have since returned to pre-pandemic levels. “We’ve even seen some significant gains brought on by the e-commerce boom,” she said. “But this demand for trucking only further highlights the shortage of qualified drivers.

“Consider this, too: With the average driver age hovering around 50, we’ve seen a lot of drivers opt for early retirement or careers outside of trucking due to COVID-related health concerns,” Newton added.

Amid the pandemic, the industry not only has a year-over-year shortfall in the trucking workforce but also for the first time in at least a decade, the number of drivers at smaller fleets declined as freight demand rose, according to a recent Journal of Commerce (JOC) article.

The number of drivers at carriers with up to 100 trucks declined by 150,172 between July and October, according to a recent analysis of FMCSA data by third-party logistics provider Tucker Company Worldwide and shipper risk management company QualifiedCarriers.com.

Since July, the number of truck drivers has declined by 4.4%, the article shows. Many drivers left the industry as expanded unemployment benefits expired July 31.

Meanwhile, larger fleets, or those with 1,001 to 2,500 trucks, added 3,797 drivers. “However, the loss of 150,172 drivers at smaller operators throws a spotlight on the damage done to those carriers in the first months of the recession, when a quarter of U.S. freight shipments disappeared overnight,” the article shows. Truckload spot rates fell to less than $1 in March and April, but the rates rose in June and July as freight demand increased. Yet the rise might have been too late for some carriers because they might not have been able to pay their drivers after the damage done at the start of the pandemic, according to the article.

Some sectors of the trucking industry have had strong demand, such as those working to restock grocery stores or deliver medical supplies, Newton said. But others, especially tankers, have had a decline in demand that’s not expected to recover until the summer 2021 driving season, she added.

The mixed freight demand was reflected in American Trucking Associations’ advanced seasonally adjusted For-Hire Trucking Tonnage Index that declined 6.3% in October after rising 5.7% in September.

“While there are indications that the economy is losing momentum, I believe October’s tonnage softness was more of a seasonal issue during a pandemic than anything else,” said Bob Costello, chief economist for American Trucking Associations. “Typical seasonality is off this year, and it was a reason why October was down so much. Not seasonally adjusted tonnage was down a fraction as much as normal over the last five years during September, leading to a big seasonally adjusted gain. However, that means October’s not seasonally adjusted tonnage grew less than half as much as it typically does, leading to a big drop in the seasonally adjusted figure. There are plenty of carriers still saying that tonnage, retail tonnage, in particular, is good.”

The seasonally adjusted index fell 8.7% in October, from the same month in 2019, and the decrease was the seventh consecutive year-over-year decline. So far through 2020, tonnage is down 3.9%, from the same period in 2019.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by carriers before any seasonal adjustment, rose 2.7% in October, from September. The index mostly accounts for contract freight as opposed to spot market freight.

In 2018, the trucking industry was short about 60,800 drivers, up nearly 20% from 2017, according to a 2019 report by the American Trucking Associations. Arkansas has 34,700 heavy and tractor-trailer trucker drivers, according to the U.S. Bureau of Labor Statistics. To meet existing demand, Newton said the industry needs to add between 700 and 1,000 drivers in Arkansas.

“The driver shortage is as real as it was in 2017,” said Shelley Simpson, executive vice president and chief commercial officer for Lowell-based carrier J.B. Hunt Transport Services Inc. She spoke in a recent JOC Inland Distribution Webinar. “Pay can fix the problem in the short-term, but [in the] long-term we need to change the job.

“We don’t think there’s necessarily a driver shortage long-term, but we think there is a shortage of information and connectivity that would create a more efficient network,” said Simpson, adding that such a network would include more miles for drivers.

On Monday (Dec. 7), ATRI announced the 2021-2022 Research Advisory Committee that included Chief Jay Thompson of Arkansas Highway Police and Doug Voss, Arkansas Highway Commission Endowed Chair at University of Central Arkansas in Conway. The committee is responsible for annually identifying the top research priorities for the trucking industry. The members represent carriers, industry suppliers, drivers, shippers, law enforcement, academia and government. Shawn Brown, vice president of safety for Cargo Transporters Inc., was appointed to serve as chair of the committee.