In percentage terms, the for-hire trucking industry’s payroll employment gains in both 2011 and 2012 was the highest since 1994, but growth has slowed sharply in 2013.
Trucking payroll employment was up 3.9% at the end of 2011 compared to the end of 2010, according to Bureau of Labor Statistics data. By the end of 2012, trucking had added another 3.7%. Through October, however, trucking employment is up only 1% year to date, which is even slower than the 1.4% year-to-date growth in overall U.S. employment.
Lack of demand for drivers would not seem to be the issue. Freight tonnage through September was up 5.4% compared to the same 2012 period, although American Trucking Associations Chief Economist Bob Costello has pointed out, growth in oil and gas extraction and in housing construction tend to inflate those numbers relative to the growth in loads.
Still, trucking fleets consistently say that finding and keeping drivers is their top concern, and according to ATA, turnover at large truckload carriers is at 100%. Even among small truckload carriers – those generating less than $30 million in annual revenue – turnover is at more than 80%. So fleets are hiring lots of drivers just to hold capacity relatively steady.
One possible interpretation of the BLS data is that 2011 and 2012 hiring growth represented not just drivers but a restoration of other key staffing levels, such as recruiting and compliance personnel, dispatchers and dock workers, from the recession lows. Also, the BLS figures capture only payroll positions and would not, therefore, reflect any growth in the sizeable owner-operator force.
Those are plausible explanations, and all surely are contributing factors. But another credible interpretation should scare most fleet executives. The drop in trucking job growth in 2013 could mean that trucking companies are finally beginning to exhaust the driver supply. Consider these trends:
- An aging driver force;
- A Compliance, Safety, Accountability program designed to become progressively tougher on drivers and fleets;
- Widespread adoption of electronic logs;
- New hours-of-service rules that reduce productivity;
- A generally – albeit slowly – improving economy and job market
Taken together, these developments could make increasingly difficult to keep trucks filled.
Until now, the one clear benefit fleets enjoyed in hiring was high national unemployment, but that’s changing – especially in the industry that competes most closely with trucking for labor. After shedding more than 25% of its payroll jobs in 2008 and 2009, construction hiring has outpaced the overall economy since 2011. So it could be that a depression in construction masked a looming crisis that fleets are just now beginning to experience. And after 12 straight years of job cuts, payroll employment has risen in manufacturing in each of the past four years, suggesting at least stability in that sector.
Talk about a driver shortage is hardly new, but the recent past might be nothing compared what lies ahead.