Face it. The long-haul trucker is king of the road. And in 2013, he will reign only more supreme. Thanks to changes in demographics, regulations and economic indicators, this year should shape up to be the biggest “year of the driver” since before the start of the Great Recession.
Whether a fleet owner regards the driver issue as one of simply too much employee turnover or the result of an out-and-out shortage of qualified workers, much can be done at the carrier level to at least mitigate the crisis to a level manageable over time.
But make no mistake, the shortage is already severe. “Despite an unemployment rate hovering in double digits, motor carriers report having tremendous difficulty in attracting and recruiting drivers,” observes Gary Petty, president & CEO of the National Private Truck Council (NPTC).
Indeed, a recent American Trucking Assns. (ATA) study holds that the current driver shortage is “acute,” albeit limited primarily to the truckload sector, and long-term trends could cause the shortage to “explode” in the next 10 years.
“Carriers and fleet executives have begun expressing concern about their ability to identify and hire qualified professional drivers,” notes ATA chief economist & vice president Bob Costello.
The ATA study found that while the “bulk of the shortage was confined to long-haul, over-the-road truckload carriers,” less-than-truckload carriers and private fleets may have “some difficulty” hiring drivers, too.
ATA estimates the current shortage of drivers to be in the 20,000 to 25,000 range in the for-hire truckload market on a base of roughly 750,000 trucks—and it regards this shortfall as “significant.”
“On average, trucking will need to recruit nearly 100,000 new drivers every year to keep up with demand for drivers,” Costello adds, “with nearly two-thirds of the need coming from industry growth and retirements.”
And per the Bureau of Labor Statistics, the employment of “heavy and tractor-trailer truck drivers is projected to grow 21% from 2010 to 2020, faster than the average of all [other] occupations.”
What will make 2013, especially regarding long-haul drivers, markedly different than 2012 will be the confluence of key demographic, regulatory and economic factors that will tighten the market for these already highly sought-after truckers.
While the effect of demographic changes is ongoing and the regulatory actions are expected, economic activity will have the biggest direct impact on the driver situation.
But a big part of what may unfold economically can at press time be described only as “likely.” Right now, the crystal ball remains clouded. That’s because Washington has not yet sealed a bipartisan deal to avert sending the economy sailing over the so-called fiscal cliff—a truly political construction if there ever was one.
According to Federal Reserve Board chairman Ben Bernanke, avoiding the cliff would be the “most effective way Congress could help to support the economy right now.” And he stated in late November that 2013 could be a “very good year” for the economy—if Congress and the president move quickly to dismantle the cliff.
On the other hand, some analysts prefer such terms as “fiscal slope” and “fiscal ramp” because they contend the impact of Washington inaction would be drastic but gradual and, in some ways, reversible.
“The slope would likely be relatively modest at first,” wrote Chad Stone, chief economist at the Center on Budget and Policy Priorities think tank, in an analysis piece. It’s his view that a “relatively brief implementation of the tax and spending changes required by current law should cause little short-term damage to the economy as a whole.
“The federal budget is expected to shrink dramatically between 2012 and 2013 if the laws governing revenues and spending remain largely unchanged,” explained Stone. “With no action from policymakers, that sharp reduction in the deficit would slow the economy dramatically, likely creating a mild recession in 2013.”
However, he emphasized that even under that scenario “the economy will not go over a cliff and immediately plunge into another Great Recession” in January.
“Rather, most households will begin to receive somewhat smaller paychecks due to higher income tax rates and the expiration of the payroll tax cut, but the impact on their cash flow would play out over the year rather than being concentrated in January,” Stone pointed out.
“More important,” he added, “there is bipartisan support for extending most of the middle-income tax cuts through 2013, so the impact of a temporary expiration of the tax cuts on consumer spending is likely to be modest, given the very high likelihood that lawmakers will end up extending them retroactively to Jan. 1, if they haven’t acted by New Year’s Day.”