Faced with an improving U.S. economy, trucking industry experts suggest ways to address wage gaps and the shortage of new drivers.
As America starts zooming along on the road to recovery, drivers are afraid of being left in the dust.
While the U.S. begins to climb out of an economic hole, trucking industry experts are becoming more concerned about the widening driver wage gap. With people getting back to work, and a rising demand for products to hit the road, the number of drivers and wages still falling behind other industries.
Although concerns over driver shortages have been growing for years, the increased activity from an improving economy is making the driver gap hit trucking industry close to home.
Several facts have caused the trucking industry to worry about the future:Writer Jon Ross attributes the driver shortfall to two factors: lifestyle and demographics. In an article in American Shipper magazine titled “Short-Changed: Trucking Industry’s Attraction to Future Drivers Lacks Incentives,” Ross suggests a shift in thinking about the role of the driver is necessary for the future health of the trucking industry.
- The average truck driver today makes around $40,000 a year; wages that lag behind other comparable industries.
- Experts say this will result in shortages of between 100,000 to 150,000 drivers.
- Several carriers report driver applications in the first quarter of 2013 are off about 20 percent.
- Most of these workers are seeking jobs in more profitable industries, like agriculture and construction, where the salaries can be higher.
According to Ross, carriers and shippers, as well as other stakeholders, must re-evaluate their relationship with drivers—things more than just higher wages:
Dave Haessly, director of distribution at Hibbett Sporting Goods, thinks trucking companies won’t be as fast to remobilize capacity once an economic turnaround occurs — either because they can’t find enough drivers or it wouldn’t be in the best financial interest of the management.
The issue of the driver gap turns out to be a two-headed sword. First, there are enough drivers to manage more business; second is preventing (or absorbing) rate hikes associated with better wages. Growing salaries might be easy, but the challenge is to have the compensation that will attract enough new drivers to fill industry needs.
To complicate matters, the newly introduced Federal Motor Carrier Safety Administration’s Compliance Safety Accountability (CSA) enforcement program has put additional pressure on carriers to keep up employee rosters.
The “new Normal” of the trucking industry is starting to change the ways of doing business. In the past, asset-based drivers would receive a lion’s share of the business, with only a small percentage going to independent brokers. Now, in some companies, a majority of traffic goes to brokerage drivers.
To reduce the burden of the driver gap, as well as avoid general hikes that could cause rate negotiations to get even more aggressive, Ross points to the possibility of “greater flexibility” in the types of products shippers will deliver. Finding the truckers to transport goods makes it an appropriate time to move “less desirable” freight at rates of about 10 to 15 percent higher.
Some carriers believe that the worst is not over yet. In light of that attitude, they also believe the driver gap will begin to end, only if shippers and carriers cooperate. Ross discusses this optimism with Max Fuller, chairperson and chief executive officer of US Xpress:
“Everybody will (have to) be more flexible,” Fuller said. “I think there are a lot of solutions to mitigate some of this potential hit, but it’s going to take the shippers and the carriers working together to be able to mitigate a lot of that impact.”
To read the entire article by Ross—“Short-Changed: Trucking Industry’s Attraction to Future Drivers Lacks Incentives”—visit the May 2013 online edition of American Shipper Magazine.