A respected group of industry analysts has issued a report predicting that a shortage of truck drivers will lead to annual truckload rate hikes of 3 to 5 percent through 2007—and that estimate may be too conservative, they now say.

The report from the Richmond, Va.-based equity research firm BB&T Capital Markets, issued in late September, notes that the company's review of U.S. demographic trends found no reason to expect any signs of relief from that labor shortage until at least 2008.

The core message of BB&T's analysis is that population demographics for the trucking industry look bleak for the next decade, as demand for new recruits continues to outstrip the pool of candidates. The American Trucking Associations (ATA) has estimated that the trucking industry will need 82,000 new drivers annually to fill the seats of big rigs. Yet between 2000 and 2010, the U.S. population of men and women aged 20–44 is expected to increase by a mere 330,000, from 104.11 to 104.44 million. Individuals in that age group are considered to be the most likely to consider truck driving as a career. Under federal law, however, an individual must be 21 years old to obtain a commercial drivers license (CDL), which is required for operating a large truck.

A closer look at population trends shows that the next four years will be especially difficult for motor carriers that need to find new recruits. The number of males aged 20–44 will shrink by 53,700 individuals between 2003 and 2007. And although some industry observers have suggested that companies consider hiring women drivers, the demographics for that gender are equally unfavorable: The number of females aged 20–44 will shrink by 69,000 during that same period.

BB&T estimates that demand for freight capacity will mirror the 3 percent projected growth in the gross domestic product (GDP). If that's the case, it could make the driver shortage 12 to 15 percent worse than it is now. "If GDP averages 3 percent and there's no increase in driver productivity, GDP growth will match the increase in loads," said Thomas Albrecht, BB&T's managing director. "With no equipment productivity, you've got to have a 3 percent annual increase in the number of drivers. Otherwise the math doesn't work."

Because truckload carriers will lack an adequate supply of drivers—and hence will have less capacity to handle demand—they will be in a strong position to exact rate increases from shippers. For that reason, BB&T's analysts wrote, "Truckload rates are likely to go up by 3 to 5 percent for several years, not just for 1 to 2 years as some have postulated."

That's an average over several years, but the brokerage firm suggests in its report that truckload rates in the coming year will exceed that average and rise between 4 and 5 percent, excluding fuel surcharges. And even that may be too conservative: When reached for comment, Albrecht said he's now concerned that the report's estimate may be low and that base truckload rates could increase by as much as 6 or 7 percent in the coming year.

BB&T's analysts suggest that truckload carriers' inability to hire and retain drivers may lead them to seek radical solutions to that problem. One possible tactic would be mergers. Historically, the analysts noted, truckload carriers have made acquisitions to gain access to equipment or territory. When equipment values fell between 2000 and 2002, motor carriers had little incentive to buy other trucking companies. With used equipment prices stable again, they concluded, some truckload carriers could avoid driver-retention problems by deciding to buy another trucker, sell off the equipment assets, and retain the drivers.

There's no simple, fast solution to the human resources battle that motor carriers have been fighting for more than a decade. If truckload carriers are to keep up with demand and avoid pushing rates through the roof, there's only one way to go: "The industry has got to convince people to come into trucking," Albrecht said.