New data shows an improving for-hire truck driver market, in part because most drivers will be exempt from the new federal COVID-19 mandate, which is now winding its way through federal courts on a likely journey to the U.S. Supreme Court.
The data comes from the October reading of the Driver Availability Index by ACT Research, a monthly survey of for-hire trucking service providers.
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“The most critical survey takeaways this month revolve around the driver market, with the Driver Availability Index improving considerably in October, as it became clear that most fleets will be exempt from proposed federal vaccine rules,” Tim Denoyer, VP and senior analyst at ACT Research, said in a release from the publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts.
“The large fleets who train the vast majority of the industry’s drivers would be impacted by the mandate, though it appears only driver schools and team drivers will fall outside of the exemptions. We see ongoing supply-chain turgidity limiting capacity growth, but the pace of hiring is gradually improving, which will be key to the rate trajectory.”
A snapshot of the overall driver shortage released in October by American Trucking Associations (ATA) showed a shortage of 80,000 drivers industrywide and possibly 160,000 by the end of the decade. Many in the industry feared the Biden administration COVID-19 vaccine mandate, now being contested in the 6th U.S. Circuit Court of Appeals by a long list of plaintiffs from several states, including ATA, would aggravate the driver shortage.
But the U.S. Department of Labor last month declared most truck drivers to be exempt from the mandate, issued by the Occupational Safety and Health Administration (OSHA), which covers businesses with 100 or more employees and would require either proof of COVID-19 vaccination or weekly testing of unvaccinated employees.
According to OSHA, employees exempt from the mandate include those who don’t report to workplaces where others are present; those who work from home; or those who work exclusively outdoors. But some trucking industry employees, such as those in fleet offices or maintenance shops, would need to comply with the mandate if it passes muster in the courts.
President Biden last week urged companies to comply with the vaccine mandate, even though its fate is uncertain while court challenges proceed. A federal judge in Missouri on Tuesday also blocked the vaccine mandate for health workers at federally funded facilities in 10 states. That case involves four lawsuits that oppose the mandate.
Other October data from another ACT index, the ACT For-Hire Trucking Index, which covers all of that segment of trucking and not just the driver market, showed a decrease in volumes, pricing, and productivity, with capacity up slightly and with a lower but still-healthy supply-demand balance, according to the Nov. 30 release from ACT Research.
Denoyer added, “While the pandemic continues to cast uncertainty, the freight volume outlook remains positive. In spite of the supply-chain constraints, retailers have managed to stock up ahead of the holidays, the consumer balance sheet is strong, and massive restocking demand remains ahead.”
Regarding the supply-demand balance, he noted, “We continue to see a slower-than-normal rebalancing in U.S. trucking markets, featuring record rate increases. Equipment capacity is tight as Class 8 tractor and trailer sales are constrained by parts shortages, leaving immense unmet demand. With some structural driver issues likely to outlast the pandemic and a generally positive freight outlook, we do not expect the market to loosen quickly.”
The ACT Freight Forecast provides forecasts for spot truckload rates by trailer type for four to six quarters and truck volumes and contract rates for three years for the truckload, less-than-truckload, and intermodal segments of the transportation industry.
In 2019, the average accuracy of the report’s truckload spot rate forecasts was 98%, according to ACT Research. Its freight forecast uses equipment capacity modeling and the firm’s economics expertise to provide visibility for the future of freight rates.
