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Driver Shortage & Retention
The trucking industry is down an estimated 35,000 drivers since the conclusion of the Great Recession and the steady recovery of the economy. According to a projection by the American Trucking Association (ATA), the industry could be short 240,000 qualified drivers by the year 2022. The rise of consumer demand in the last few years has effected an increase in freight production, but manpower has failed to match this positive trend.
The turnover rate for trucking companies has also risen to 97% as of February 2015. This means for every 100 people hired, 97 people quit. For some larger truckload carriers this rate is even higher, signifying that drivers are leaving and replacements are not available. Compounding the shortage of qualified drivers, this industry-wide turnover rate pressures shipping costs to rise and carriers to rejuvenate their hiring techniques.
The Truckload Carriers Association (TCA) has taken serious note of this workforce void and hosted their 12th Annual Recruitment and Retention Conference February 4-6, 2015. This strategic meeting was designed for managers in the trucking industry to learn methods to increase their success finding and engaging the most valuable drivers. Tactics such as these are necessary in the current environment to increase driver numbers.
A shortage of qualified truck drivers is debilitating the trucking industry and has been an issue of concern for years. In the last decade, 2009 was the only year where an overall demand for truckers was low and capacity rates were met. This corresponded with the recession and was an anomaly within the shortage trend.
With an aging workforce, a void in younger driver sign up, an increase of retiring drivers, long periods away from home, few pay incentives, and stricter driving laws, membership in the trucking industry is low. The average age of a truck driver is 55, according to the Bureau of Labor Statistics. Additionally, a survey by the ATA found that 90% of carriers could not find enough drivers to meet the Department of Transportation’s (DOT) trucking criteria. The entry-level driver training requirements implemented by the Federal Motor Carrier Safety Administration (FMCSA) also restricts driver enrolment and maintenance. These mandates oblige employers to instruct drivers about: driver qualification requirements (medical exams, responsibilities, orders, loss of driving privileges), hours of service (HOS) rules, driver wellness (health maintenance, avoiding excessive use of alcohol), and finally whistleblower protection (the right of an employee to question the safety practices of an employer without reproof). These strict training dictates also make it difficult to retain and recruit drivers.
To combat this driver shortage, carrier companies have begun to offer incentives like signing bonuses and coverage of licensing costs. The aim of these schemes is to decrease vacancies and increase overall productivity within the industry. Yet, in spite of these measures, there are still not enough skilled new drivers signing up. In fact, Bob Costello, chief economist for the ATA, says, “As the industry starts to haul more because demand goes up, we’ll need to add more drivers – nearly 100,000 annually over the next decade – in order to keep pace.”
Shipping rate escalation and thus inflation is the anticipated result of this truck driver shortage. In August 2014, the shipping rate per mile on long-term contracts rose 8%. This increase is trickling down to the consumer, and making the demand to shore up the driver shortage even greater.