In the U.S., the truck driver shortage is causing a lot of headaches for shippers. Not only is it forcing carriers to pay out higher wages and, subsequently, pass those increases along to individual shippers, but the trend is also creating capacity issues for anyone that relies on truckload (TL) or less-than-truckload (LTL) transportation. Compounded by the higher insurance and equipment rates that trucking companies are paying right now, the driver shortage has created double-digit freight rate increases in 2021.
Unfortunately, the imbalance between demand for and availability of truck drivers probably isn’t going away anytime soon. In fact, this could become the “new normal” environment for the next five years. “The shortage in the number of truck drivers is expected to deepen in the U.S. by the year 2026 in a development that subsequently will influence rates,” Bulk Transporter reports. Currently, it says the industry is “short” about 63,000 drivers—a problem that could accelerate due to several factors.
Those factors include the current rate of retirement for existing drivers, electronic logging device (ELD) mandates that dictate how many hours a driver can be behind the wheel, and the fact that younger job candidates are looking for “less-demanding careers,” the publication notes.
One recent study revealed that nearly 25% of the current commercial driving workforce will become eligible for retirement in the next 10 years, and that 57% of the current drivers are over 45 years of age, according to Transport Dive. And, the FMCSA’s Drug and Alcohol Clearinghouse database currently prohibits about 65,000 drivers from driving. Combined, these factors are making it more and more difficult for carriers to put qualified drivers behind the wheel.
Higher Wages, Better Working Environment
With the truck driver shortage in full swing and not expected to end anytime soon, the carriers themselves are taking new steps to help solve the persistent problem. In some cases, they’re offering sign-on bonuses, more competitive wages, and enhanced benefit packages in hopes of attracting more candidates to fill open positions.
“The biggest obstacle to attracting new truck drivers may be pay,” NACS Daily observes. “While Walmart truckers—all of them employees of the retail giant—make a highly publicized salary of about $90,000 a year, the average annual wage for a tractor-trailer truck driver was $45,570 as of May 2018.”
In early-April, Knight-Swift Transportation Holdings Inc., told WSJ that wages for recently-certified drivers jumped by 40% or more in recent months. In November, Paper Transport Inc., said certain regional drivers will receive a 7% pay increase on average and a minimum weekly pay guarantee, while Venture Transport announced that it would increase pay for certain regional and over-the-road drivers, Transport Topics reports.
Other companies have taken a similar stance, and experts predict there will be more wage hikes to come in 2021. “We anticipate further wage action will be necessary this year,” one transportation analyst said in WSJ, “just to maintain current fleet size.”
According to Joe Jaska, EVP Land Transport Americas, “In addition to pay, another obstacle to bringing drivers into the market is improving the quality of life for the driver. More home time, less wait time, better facilities, and driver friendly freight will differentiate shippers to be the ‘shipper of choice’ and improve the ability to attract and retain drivers.”
Schools Step up to the Plate
Under pressure to produce more qualified candidates, truck driving schools around the nation are also playing a role in helping to ease the shortage. In February, Roadmaster Drivers School opened a new location in Savannah, Ga., with the goal of helping to “tackle a nationwide driver shortage and prepare students for employment,” WSAV News reports. The school teaches job candidates the essential skills required to earn their Class A commercial driver’s license (CDL) and become professional truck operators.
Roadmaster’s efforts appear to be part of a nationwide trend. In South Carolina, for example, Trident Technical College is renovating an existing campus into a training facility that will house CDL training, a diesel mechanic program, and IT and logistics training.
“So, we’re responding to a community need for truck drivers and diesel mechanics and all the logistics related careers,” the college’s president told WCSC News. “It’s a high paying career, these are not jobs that we have to go import people from anywhere else.”
Can Self-Driving Trucks Save the Day?
As the transportation industry works to level the imbalance between available capacity and demand for its services, self-driving trucks are emerging as a potential long-term solution to the problem. And while autonomous trucking is still largely in the developmental stages, the idea that the current driver workforce could at some point be augmented by these advanced vehicles is pushing more companies to explore their development.
According to NACS Daily, Daimler, Aurora, Waymo, and Embark Trucks are all working to develop a self-driving truck that can move goods across the country safely.
“TuSimple of San Diego already has 40 autonomous trucks transporting goods on U.S. roadways,” the publication adds. “So far, all of them have a backup driver on board. The company plans to create routes through Texas and between Los Angeles and Jacksonville, Florida, in the next few years.”
Navigating the Perfect Storm
If current trends persist, the American Trucking Associations (ATA) predicts that the driver shortage could reach 160,000 open spots by 2028. That means shippers that rely on TL and LTL to get their goods from point A to point B should pay close attention to the trend and how it’s impacting their rates, service, and profitability.
“Shippers can then leverage that intelligence into transportation decisions that make the most sense for their operations,” said Jaska. “Finally, by working with an experience logistics partner that understands the market fluctuations and nuances—and can provide reliable guidance through any conditions—shippers can effectively navigate this storm and prepare for a more predictable future.”