Tighter regulations, higher costs, shifting demographics, and equipment shortages are some of the factors clouding the future of a declining truck driver workforce.
Although the slow economy has kept the pressure off of trucking company recruiting departments, the truck driver market is tight, and getting tighter, especially in certain geographic locations. If the economy rebounds, the shortage of truck drivers could quickly reach critical mass and proposed changes to truck driver hours-of-service rules will further exacerbate the situation.
Competition for quality drivers and increases in freight demand have also conspired to increase the over-the-road driver turnover rate. According to the American Trucking Assns.' (ATA) latest Trucking Activity Report, the turnover rate rose to 79% in the second quarter, up from the first quarter rate of 75%. This is the third quarter in a row of increased churn in the driver market. As driver pay and benefits increase, truckers tend to jump from carrier to carrier.
“Even though the increase was small, we still believe the market for quality drivers is getting extremely tight, and fleets are aggressively recruiting to fill openings,” according to Bob Costello, ATA's chief economist. “The slowdown of the economic recovery has affected the turnover rate, but if the economy continues to improve, we'll see further tightening in the driver market and a renewed risk of a severe driver shortage.”
And demographic trends will turn against the trucking industry, according to a study conducted by Global Insight for ATA. Economic growth will give rise to a need for a 2.2% average annual increase in the number of long-haul truck drivers, or an additional 320,000 jobs overall. At least another 219,000 new truck drivers must be found to replace drivers aged 55 and older who will retire over the next 10 years and to replace those in younger demographics who will leave the industry. The combined expansion and replacement of truck drivers means a total of 539,000 new drivers over 10 years, or an average of about 54,000 per year, the study found.
Despite the severe driver shortage, many trucking companies continue to reject a high percentage of driver applicants due to their lack of qualifications. And the challenge of finding qualified drivers has grown due to implementation of FMCSA's Compliance, Safety, Accountability (CSA) program. The government's CSA program has put a premium on drivers with good, clean records.
Statistics estimate that the CSA 2010 policy will, over time, remove about 10%, or between 300,000 and 380,000, commercial drivers from the road.
Raising the bar on becoming a truck driver may also have the effect of making alternative occupations more appealing to potential truck driver candidates, according to Global Insight. “For example, entering the construction industry as a laborer or a semi-skilled worker does not entail the level of certification, licensing, and checks required for the trucking industry.”
ECONOMIC DOLDRUMS HELP
The poor economy has so far kept many drivers from leaving the industry for other occupations. “We're doing quite well, keeping trucks full even when growing significantly,” says Dan England, chairman of C.R. England, based in Salt Lake City, UT. “One thing that's helped is that improvement in the economy has been precipitous…it's been herky-jerky, one step forward then one step back. We compete with the construction industry for drivers so with construction lagging, we've had a bigger driver pool out there.”
C.R. England has a system for finding, training and developing its own driver pool with four driver schools. The fleet trains about 5,000 to 6,000 new drivers a year.
“We have high turnover because new drivers just entering the industry often find out they aren't cut out for trucking,” England says. But the company likes its model of training drivers from scratch to teaching them to conform to company safety and operational standards. “We train them the way we want in terms of safety, operations and just-in-time deliveries. Some fleets are suffering, but we've been able to keep our unseated truck count in a range that we're satisfied with.”
The company is also spec'ing roll stability, lane departure and forward collision warning systems for safety, and to improve driver retention. “They are good tools for us,” England says. “They've helped prevent accidents. And I think it gives a driver an assurance, a little insurance against having an accident that any driver would appreciate.”
The impact of the driver shortage hasn't been felt as heavily in the less-than-truckload (LTL) sector, according to Don Orr, president of Waco, TX-based Central Freight Lines. LTL carriers often don't experience driver recruiting and retention issues as severely as their truckload carrier counterparts because they offer dedicated routes getting drivers home regularly. However, he says, “Everybody's concerned about drivers.”
FINDING IN-HOUSE SOLUTIONS
With the advent of CSA, Orr says they too have seen a decline in qualified drivers. “CSA has made it more difficult to qualify drivers.” Because of that and in anticipation of driver shortage problems when freight picks up, the fleet has reinstituted a program of training dockworkers to put them in the driver seat. The program provides driver training, then an apprenticeship program that involves riding along with experienced drivers and stepping up from straight trucks, to single-axle city trucks, to eventually linehaul trucks. The entire training process can take up to five years, however.
Proposed changes in hours of service will also impact the fleet's driver situation, Orr says. The company has set up relay terminals based on hours on particular routes. “For example, one route from Dallas to El Paso is an 11-hour one-way turn. You can't do it in 10 hours. If the hours-of-service rules change, how do we do that?,” Orr asks. He says the company is looking into moving and adding terminal locations in the event driver hours-of-service rules are changed.
Changing driver hours will add significant costs to carriers, Orr says, including increased driver pay. “A driver who makes $800 a week still needs to make $800 a week. If he can't work as much, we will have to increase pay. It's going to be very expensive to the shipping public. All those extra costs are going to end up being passed back to the customers.
“As people shift and change things to accommodate regulations, it inhibits the economic growth of the country,” Orr says. “It's a fight for survival. We keep losing capacity out of the industry. When things pick up, it will be hard to find people with the money to invest to do it right. Nobody's going to be able to get equipment. It's going to be a disaster.”
Mike Hinz, vice president of driver recruiting for Schneider National, says the driver shortage is “especially pronounced for highly qualified drivers.” And he also predicts the situation will get worse in the next 18 months, especially if more oppressive driver hours-of-service rules are introduced.
On the other hand, CSA has motivated quality drivers to abandon carriers with less aggressive safety programs and turn to the better operators. “We've had record-breaking amounts of applications from experienced drivers and owner-operators,” Hinz says. “It's clear that professional drivers are looking to align themselves with the more professional carriers. They know they won't get pulled over for inspections as much if they align with well-run, safe, productive organizations.”
Don Osterberg, Schneider senior vice president-safety and security, predicts the DOT's Inspection Selection System will cause further migration of good drivers away from less conscientious carriers. Under the system, inspectors plug in a truck's DOT number and a screen will flag the truck green, amber or red. Green alerts the inspector that the fleet has a good safety record and the truck should pass through without inspection; amber allows the inspector to inspect the rig at his discretion, while red requires a mandatory inspection.
THE CASE FOR EOBRS
Carriers that have trucks flagged amber and red in the system run the risk of losing drivers to fleets that aren't stopped for inspections as frequently. “It's a big loss of productivity if you get pulled over for an inspection,” Osterberg says, adding that statistics show that there is a 20% chance that if a truck is flagged for an inspection, it will be placed out of service.
One thing that helps Schneider drivers breeze through the scales is the fact that the entire fleet is equipped with electronic onboard recorders. “When a driver is pulled over and the inspector finds they have EOBRs, the inspection is often suspended,” Osterberg says. “Once they find you are on EOBRs, they don't probe too deeply and inspections have been much quicker since we started using electronic logs.”
CSA has also had an impact on driver hiring at Craig Transportation, Perrysburg, OH. Driver problems are now more transparent, according to fleet CEO Lance Craig. “The more we look, the more troubles we're finding when we dig into the records of applicants. Our turnover is low [34%] but on the flip side, we may not be able to bring in enough drivers to satisfy commitments to customers; it's tough.”
Craig says they have had several applicants that were former owner-operators who were forced out of the industry. Many of them, however, have been off the road too long, he says. “We don't like to bring folks on that don't have at least two years recent experience.”
In order to decrease the number of drivers lost due to poor CSA records, Craig has implemented an online training program. “With CSA, we needed a way to train drivers long distance. Nothing substitutes for face-to-face training, but this gives us the ability to get to drivers having problems rapidly.” And the online training is working, Craig says. “Our CSA scores are getting better. Like anything, you focus on it and it seems to improve.”
Craig says the pressure from shippers to grow often places trucking companies in a position of cutting corners on driver screening. “But I'd rather be small and profitable than large and possibly not profitable. The pressure from shippers to grow is enormous, but I've learned from the last recession not to grow without hard evidence that it's warranted.”
The ability to find drivers has become increasingly more difficult over the past 24 months, according to U.S. Xpress co-chairman Max Fuller. “We felt we were insulated from the problem, but in March and April of this year, the driver shortage started to escalate and we were hit hard.
“Business is going to continue to improve through the balance of the year,” Fuller predicts. “Trucking may be seeing better business than the general economy because of shrinkage from trucking companies going out of business. It will take us 18 to 24 months to bring enough drivers [onboard] as the economy starts to ramp up so we will probably see a pretty severe driver shortage when the economy improves.”
Fuller says the truckload fleet has had to increase its driver recruiting costs from a previous average of about $600 per driver to more than $3,000. “We've invested a lot more in driver training, using simulators, and improving driver communications. We're constantly trying to improve training and communications to get drivers the proper skills. Training has been customized to deal specifically with each driver's individual issues,” Fuller says.
The fleet has purchased 3,200 new trucks this year, and all have been spec'd for driver comfort with premium seats, suspensions, and other driver-friendly amenities. Trucks are also spec'd for safety with collision avoidance systems, premium braking systems, and LED lights to help a driver's line of vision. “You have to give the driver the proper tool to do the job safely. We get driver input daily on vehicle specifications. It's hard to make a purchasing decision without drivers telling us what works and what doesn't,” Fuller says.
Drivers may have different opinions, however, on what works. “We have to offer a variety of specs. Some drivers don't like automatic or automated transmissions, while others will seek out a company solely because they use them. We try to accommodate drivers on vehicle specs as much as possible.”
One spec that made drivers particularly happy was placing a release valve for the fifth wheel in the cab so the driver doesn't have to get out of the cab or get greasy releasing the trailer. “It may seem like a small thing, but it's big to a driver.”
Fuller also expressed concerns over proposed changes to driver hours. “The two previous changes impacted fleet utilization by 12%. If proposed changes go into effect, they will adversely impact fleet utilization an additional 8 to 9%, driving prices to customers up, causing driver compensation to go up… all price increases that will be passed on to the consumer,” he says. “If you're not running teams, it will take six days to do the same amount of work you could previously do in five. If the restart provision is passed, it will take seven, making the trucker's job just that much harder.”
BUYING PREMIUM PAYS
Purchasing premium equipment has helped Brady Trucking, a bulk commodities hauler based in Vernal, UT, recruit and retain drivers. Brady Trucking owns and operates 100-plus power units and over 125 trailers, employing more than 135. The fleet has doubled its size every two years for many years, according to Chuck Johnson, vice president. “We run all Peterbilts and it does help recruit drivers,” he says. “We buy the best equipment available and keep the equipment new, clean, presentable. It's a good tool to keep our drivers satisfied.”
To broaden its exposure and help recruit drivers, the company recently hired a sign company to make vinyl advertising wraps for company trailers to park outside of each of its locations. “We're hoping this new approach to recruiting will be a success,” says Johnson.
Brady Trucking has also been successful at recruiting drivers through job fairs, he says. Job fairs are held in all the regions where Brady has terminals and in other nearby areas with large populations such as Phoenix and Salt Lake.
“We rent a hall or location, cater a lunch and bring company personnel in to discuss driver job opportunities. We're a small company so it's important to get ourselves out from behind all the noise. Individuals we've recruited this way have been [longer] tenured than those from regular recruiting efforts,” Johnson says.
Driver shortage requires long-term approach
In the short term, fleets are trying to fill the seats of the trucks they currently have. But, according to Chris Burruss, president of the Truckload Carriers Assn. (TCA), the industry needs to focus on long-term solutions to driver issues.
“The good news is carriers are busier; the bad news is it has brought the driver shortage back into focus,” he says. “Carriers need to look at how they can differentiate themselves; it's not just pay and perks, it's about respect. Fleet managers and dispatchers play a big role.”
Before the economic slowdown, trucking companies began taking “a top-to-bottom look at how everyone in the organization focuses on drivers as the central force in the company.” That is an approach that needs to be developed and maintained through good times and bad to keep drivers in the industry, he says.
“Long term, the industry needs to consider what we are going to do when the current pool of drivers retires. Most are in their mid-50s. How are we going to fill the trucks of the future?” Burruss asks.
TCA is “dusting off” and taking another look at its younger driver pilot training program introduced in 2001. The program brought a lot of “knee-jerk” criticism when it was first considered. But for the long-term health of the trucking industry, the controversial program deserves a harder look, he says.
Programs to attract drivers from other occupations and demographics have failed, Burruss says. “We've attempted to attract drivers from other potential arenas including minorities, veterans and dislocated workers and it hasn't worked.”
The younger driver pilot program is designed to bring young people that are currently lost to other occupations because of truck driver age requirements into trucking.
“A large percentage of people were against it, mostly just because of the fear of the age factor. But the opposition wasn't based on any real data,” Burruss explains.
The younger driver pilot program was meticulously set up to ensure drivers were properly screened, trained and established as mature enough to handle the job. “We aren't talking about putting a 19 year old in a truck and sending him across the country,” Burruss points out.
A 52-week training program would begin with basic truck driver training through a PTDI-certified truck driving school. Once completed, the driver would move on to a volunteer trucking company — also screened to ensure the fleet has an excellent safety record and driver mentor program in place — for a finishing program. In a mentorship phase, the driver would be teamed with a driver mentor until they felt the driver was ready to drive solo.
“It's continually going to get harder to attract new drivers into the industry without something changing. The knee-jerk reaction is that insurance carriers won't underwrite the risk. We need to get them to at least agree to a pilot program,” Burruss concludes.