The driver shortage is an ongoing challenge for carriers. Driver turnover continues to remain stuck near 100 percent. Freight rates and capacity demand continue to hold steady, leading driver income to flatten. The short supply of well-qualified drivers — those with very few tickets, a safe driving record, no criminal background, etc. — puts a major strain on the market. You’ve heard it all before.
Why the Driver Shortage?
But why is there a driver shortage? It’s driven by five major issues:
- Demographics — The baby boomers were the most populated generation ever. They poured a significant amount of labor into the market, beginning in the ’60s and ’70s on through to the ’80s. Since that boom, subsequent generations have been unable to match the supply of labor. In fact, since 1994, a higher percentage of newer generations have pursued and obtained college degrees, further decreasing supply of those interested in blue-collar jobs. According to the U.S. Bureau of Labor Statistics, the United States was down to 3.7 percent unemployment in 2018. “That’s absolute full employment, so there aren’t a lot of people to hire,” says Gordon Klemp, founder and chief executive officer at National Transportation Institute (NTI).
- Lack of Interest in Blue-Collar Jobs — Younger generations more often perceive blue-collar jobs as low paying and high difficulty. Trucking in particular includes obstacles such as “lumpy” pay (paychecks that can vary significantly from week to week), irregular schedules, inconsistent time at home, increasing regulation, and inefficiencies at the loading dock that curtail earning potential. It’s highly frustrating to have to sit in line for hours waiting to get loaded or unloaded and not getting paid.
- Increasing Drug Use — With the rise in legal recreational use of certain drugs in some states, the job pool naturally shrinks with less drivers qualified for class A or class B CDLs. Considering 43 of 50 states allow marijuana for either recreational or medical purposes, the trucking industry loses a lot of drivers who test positive for THC.
- Less Fungible — “Today’s drivers are less likely to swap from one trailer type to another simply because of pay,” says Klemp. “They like driving flatbed, they like driving dry van, they like driving a refrigerated trailer.” These drivers aren’t as willing or adaptable out of their comfort zone. NTI has also seen a lot of sensitivity toward location-based hiring. Truckload (TL) in particular often is unappealing because of the irregular routes.
- Age — Thirty percent of drivers are in the 45–54 age range; 20 percent are between the ages of 55 and 64. The fastest growing age range the last couple of years has been in the 65-and-older demographic, increasing from roughly 4 percent to just under 7 percent right now. “We don’t see anything good happening as far as younger drivers choosing driving as a career,” says Klemp.
Predictions Show Little Relief
NTI’s predictions for the near term show little relief in sight. U.S. labor will remain tight, driver supply will again hit critical levels when the GDP hits 3.0 percent, and the aging work pool will continue to diminish while incoming workers will have little interest in entering the blue-collar market, much less the driving segment. Truck driver training schools will continue to struggle keeping classrooms full in spite of the fact that many carriers will pay student tuition. Hair testing, which offers a longer look back at drug usage, may disqualify 7 percent to 10 percent more drivers than before. Additionally, a drug and alcohol clearinghouse is on the horizon, which despite making the highways safer, may take out another 2 percent to 3 percent of the driver pool.
Courses of Action
To combat these possible outcomes, Klemp recommends three main courses of action:
- Raise Pay — As stated repeatedly, raising pay statistically correlates with lower turnover.
- Guaranteed Pay — Take the lumpiness out of pay. “Guaranteed pay is very strong when done right,” says Klemp. “And if your guarantee isn’t significant enough, it won’t be very helpful.”
- Better Driver Communications — Creating a family-friendly environment creates strong bonds between driver and company. Keeping families in the communication loop, sharing how well of a job the employee is doing, and even offering assistance when family emergencies occur and the driver is out of town can count for a lot in the relationship.
For more information on the driver shortage and other options to combat it, download the Spireon report “Money Talks: The Driver Shortage, the Blue-Collar Problem, and What Carriers Can Do” or listen to the webinar “Driver Compensation and the Driver Shortage: What’s Working?”
To learn more about driver retention and satisfaction, visit the Spireon Driver Retention Resource Center or call one of our friendly experts at 800.557.1449.