North American trucking companies have been facing a unique challenge over the last several years- namely driver shortages. Subject to an aging workforce (amidst a social climate that continues to rely on transported goods), the trucking industry is facing a substantial driver shortage with recent estimates indicating that approximately 890,000 new drivers, half of which will be serving as replacements for retirees, will have to be hired over the next decade. A recent study by the American Trucking Associations suggests that this year alone, 47,500 new drivers will have to be hired in order to adequately handle customer demands.
The current situation is in stark contrast to only several years ago when, due in large part to the 2008 economic recession, demand for goods plunged and the continent faced a surplus of willing drivers with no freights to haul. In this regard, today’s shortage proves a testament to a gradually improving and expanding United States economy that relies more heavily on imports.
Shipping costs have increased as companies have increased wages for individual drivers. While shipment delays resulting from a lack of available drivers have thus far remained rare, and increased wages are certainly a fortuitous arrangement for individual rigs, the ATA warns of potential dire effects that might result from the shortage in the near future.
“If the trend stays on course, there will likely be severe supply chain disruptions resulting in significant shipping delays, higher inventory carrying costs, and perhaps shortages at stores,” read the ATA report.
For the time-being, the wage increase has helped minimize driver turnover in the industry, bringing the turnover rate down from 100% in 2012 to just over 90% last year, which might seem like a negligible difference, but has proved a significant enough decrease to keep companies slightly off the hook.
The figure of 890,000 required new drivers represents over half of the current 1.6 million tractor-trailers currently on the road, with approximately 45% of new hirees likely to be used as replacements for the massive number of anticipated retirees over the next decade. Beyond that, ⅓ of the remaining new hires will be necessary to fill the gap of projected demand increases. The remaining chunk will be required to replace the inevitable portion of drivers who move on from the industry for other reasons.
In an effort to increase interest in truck driving positions, some companies have have begun offering a minimum guaranteed salary regardless of miles driven, as well as additional means of enticement.
“We know an even greater capacity crunch is coming, and we’ve got to make being a professional truck driver as attractive as possible,” said Robert Hatchett, vice president of recruiting for covenant transport, a Chattanooga, Tenn company that tends to require about 3,000 new drivers a year.
While the ATA’s findings provide something of a rude awakening for many fleets, they have yet to take into account the potential impact of the new federal regulations, including electronic logging, on the industry’s future.
“Our work shows the great and growing need for drivers,” said ATA chief economist Bob Costello, “but we also highlight several solutions including increasing driver pay, getting drivers more time at home, as well as improving the image of the driver and their treatment by all companies in the supply chain. Make no mistake, the driver shortage is a challenge, but it is not an insurmountable one.”
Whatever the industry faces in the future, one thing remains clear: North America’s reliance on transported goods and services isn’t looking to end any time soon, and that means that the role of the truck driver will remain as pertinent to the continent’s infrastructure as it has since its inception. Here at Scout Logistics, we are proud to be a part of it.
To keep up to date with news regarding the driver shortage check out http://www.drivershortage.ca/.