The economy is handing fleet managers their best chance yet to end the driver shortage.
Rat-a-tap-tap. The unsolicited knock at the door. It can be a welcome intrusion or it can incite fear. It can be answered or it can be ignored.
Rapping right now at trucking's door is an unparalleled opportunity to cast off the driver shortage — trucking's perennial and costly albatross — before it returns in all its glory on the wings of economic recovery.
The target is huge and the window through which to strike it is narrow and closing fast. And to be sure it will take the courage to change — both to recognize the need for change and then to act upon it — for many fleet owners to answer this call in time.
But wait, what is this talk of a driver shortage? With the economy still deep in the dumpster, a fleet today is more likely to be dropping drivers than hiring them and that means drivers are less likely to leave of their own accord. (See sidebar on pg. 22, “Eye of the storm.”)
CLOSE THE GAP
Yet just as the price of diesel will sometime soon start climbing again, the driver shortage will come roaring back once the economy picks itself up, dusts itself off and starts growing again.
Indeed, the American Trucking Assns. (ATA) estimates that the amount of total freight volume in the U.S. should grow 26% over the next 11 years, with trucking expected to score 71% of that growth.
It should be no surprise, then, that concurrently the demand for long-haul truck drivers will only mount in the very near years ahead.
Indeed, according to the most recent analysis of the driver shortage prepared for ATA by Global Insight Inc. in 2005, “in the absence of substantial market adjustments,” the driver shortfall (projected demand less projected supply) will rise to 111,000 in 2014.
The report urges trucking to close the driver gap by raising pay to make wages competitive with other industries, particularly construction, to draw in new drivers and to remove as many “irritants” to the driving job as possible to boost retention.
Nothing new there — then or now — nor should it be eye-opening that the report points out, as so much research has for decades, that the traditional driver labor pool is shrinking but fast: “The size of the white male population of ages 35-54 — a demographic group that currently provides over half of all truck drivers — will decline by over 3 million persons between 2004 and 2014.”
It would appear, then, that fleet owners today face a pretty stark choice. They can conduct business as usual when it comes to drivers — enjoy the glut while it lasts and bemoan the shortage when it returns. And when history repeats itself yet again, these executives will once again throw good money after bad to hold onto drivers who keep on churning, delivering those jaw-dropping employee turnover rates that leave leaders in so many other fields breathless.
FLEET BY FLEET
Or fleet owners can take individual action now — as the trucking industry as a whole does not have a mechanism in place to make this happen — to seriously reconsider who they might hire as drivers as well as how much more they will pay all their drivers and, what's more, how well they will treat them once onboard and ever after.
Boosting driver pay and improving the work environment for drivers, which can take so many forms, are not new ideas, but they have been given short shrift by too many.
Likewise, the whole idea of looking beyond the traditional driver labor pool to recruit women, minorities and recent immigrants is not novel, as can be seen in these pages going back some 20 years.
What is different now is the high number of highly motivated workers of every demographic description with solid employment track records in other fields who may just make excellent truck drivers.
In particular, don't think in terms of those workers whose jobs have been lost temporarily until “things pick up again.” Rather, consider foremost those whose jobs are never coming back again due to the shake-out our economy is going through.
If only fleets would consider making a place for such displaced workers — if not now then eventually — their entrance into trucking could positively impact driver turnover for years to come.
While fully cognizant of the challenge to look beyond navigating the very rough patch trucking is driving through right now, management consultant and industry analyst Duff Swain, president of Trincon Group, contends there is “a lack of foresight in this industry” that holds fleets back from making measurable — and lasting — progress against the high cost of driver turnover.
“Really, fleets need to be willing to grab the reins and deal with this [turnover] issue before it comes roaring back,” Swain states. “It can't be viewed as a short-term fix either. Fleets have to have something to draw in new recruits and at the same time make it so the experienced drivers want to stay.”
Swain says fleets should also recognize that the so-called “card check” bill — the Employee Free Choice Act — now stalled in Congress “offers a new threat to trucking companies. Were it to pass, union organizers would have a field day signing up dissatisfied drivers.”
Even if it dies on Capitol Hill, one could argue the bill's mere existence is evidence that organized labor is on the march and trucking would be wise to heed its appeal to disgruntled employees of all types.
But Swain says this widely perceived threat can play a very positive role, too. “Before such a bill becomes law,” he explains, “fleets should weed out their bad drivers and bring in fresh blood while putting in place a highly proactive approach to human resources management and communications so that drivers will want to stay — and stay out of a union.”
What drivers most want beyond a job and a good paycheck, according to Swain, is “positive reinforcement and a career path” — some indication they can in time do more than what they first came in the door to do.
“Offering a driver a career path may simply mean indicating the best drivers will be recognized and/or making it plain opportunities to enter other areas of the business exist,” he explains. “Even a small carrier with 20 or 30 drivers, for example, can offer the possibility of a supervisory role.”
Swain argues that laying out a potential career path — and communicating it — will “kill three birds with one stone: help keep the best drivers already in place, help attract new candidates from elsewhere, and provide a positive means to avoid unionization.”
Ellen Voie, president of the advocacy group Women In Trucking (WIT), concurs that fleet owners lack foresight when it comes to dealing with driver turnover.
“Carriers are being shortsighted,” says Voie. “They are not looking far enough down the road. Yes, driver applications are up everywhere now, but what happens when the economy comes back up a few quarters from now? The industry is treading water thinking the [turnover] problem is solved” because it is not a hot button right now. Also, she adds, “it is still surprising fleets aren't doing more to keep the drivers they already have.”
Voie says a key aspect to the issue of bringing new recruits into truck driving — be they women or men — is very few carriers want to hire novice drivers yet “truck-driving schools keep cranking out new graduates.”
“But I don't think anyone benefits if the schools create a glut of new commercial driver license [CDL] holders, and most of them move on to another career when they can't find a driving job,” she says.
The experience of one of Voie's classmates in the truck-driving school she attended recently to secure her own CDL illustrates her point: “One student in my class who passed with flying colors was shocked at how hard it was to find a job. Hard to believe the attitude in trucking just 10 to 12 months ago was ‘find them and hire them.’”
Craig Koven, communications manager for Celadon Trucking, a leading truckload fleet with an enviable safety reputation, is sympathetic to that point of view. But, opportunity or not, he says the carrier remains staunchly committed to its policy of “not hiring trainees, as our hiring strategy includes making sure applicants have a certain amount of on-the-road experience before they come to work here.”
“We feel we can't just hire them straight out of driving school and then have them decide trucking's not for them and quit,” he explains. “When that happens, the money we spent [on recruiting and training] goes out the window with them.”
Koven does allow that while “a carrier like Celadon would not be the entry point [for newly minted CDL holders], trucking would benefit from new drivers coming in. And once they gain over-the-road experience elsewhere, yes, we would benefit.”
Despite the little if any reaching out by fleets to newbie drivers, there is clearly movement afoot toward trucking.
Clayton Boyce, ATA's vp of public affairs, says the trucking association “has heard from a lot of community colleges that want to train as many people as they can to be truck drivers — with some reporting having full courses already. And there will be driving jobs to fill when the recession lets up.”
Boyce notes that ATA regards troops exiting the armed forces as among the best sources of new employees. “We have a partnership in place with the Army Reserve that aims to get returning military personnel to consider jobs in trucking and to get people in trucking interested in joining the Reserve.”
Jeff Stoicheff, senior vp-human resources for Penske Logistics, agrees that it “makes sense” to seek out new sources of drivers, but cautions that it's “not something many would look at right now because there is such a good market for existing good drivers” to hire.
“It makes sense to recognize that so many have been laid off in other fields. Someone who was making $40,000 to $50,000 working in a factory, say, could make more than that as a truck driver,” he allows. “The economic downturn will push people our way, but in the long term, the key is to make the job of a professional driver more attractive to the existing driver workforce as well as to draw in younger workers — Gen-Xers, millennials, including women and minorities.”
Stoicheff says turnover is “not the biggest issue” for Penske Logistics, which employs nearly 6,400 drivers who pilot Penske Truck Leasing equipment leased to its logistics customers. “Our 2008 turnover rate was 28% and this year, the rate annualized is 14%,” he notes. “The average tenure for our drivers is 5.32 years.”
QUALITY OF LIFE
According to Stoicheff, that enviable record is due to several key quality-of-life and compensation factors, including being able to get most of its drivers home every night and providing a benefits package that exceeds the industry standard.
On top of that, he says Penske Logistics drivers know they work for a company that is well run, which for them chiefly means there is an obvious commitment to operating safely with well-maintained equipment.
Turning to the long view, Stoicheff agrees that trucking can only benefit by getting the word out about what it offers. “There are lots of good companies for drivers to work at,” he remarks, “but we all have to strive to get more people into trucking. Any long-term solution to the driver shortage must involve better marketing, public relations and community outreach efforts to tell people of the opportunities in the world of trucking.”
Kim Lorimer, director of safety for the Evans Network of Companies, a logistics transportation provider that operates six divisions and contracts primarily with owner-operators, contends that trucking as a whole would be well served if it reached out “more to local governments and schools as a way to inform potential workers about what the industry can offer.”
Lorimer points out that she is active in a local logistics professional group that seeks to do just that. “We speak to students in our area about the careers available in trucking, helping to push the educational process.”
Even closer to home, Lorimer says one of the company's divisions, West Motor Freight, runs with company drivers and has found “being able to offer them a career path to become an independent contractor with our other divisions has great appeal.”
Yes, change can be hard to embrace. On the other hand, change is inevitable and in the long run, it most benefits those who are out in front of it — not those watching it roll by.