More than meets the eye when it comes to the truck driver shortage

Not only is the truck driver shortage ostensibly a problem that won’t go away, the situation appears to have become exacerbated compared to previous sentiments in recent years.

Given that this dilemma is far from new, there are also more related problems, at least on the surface, when it comes to assessing just what needs to be done to remedy things.

One action item that has received a fair amount of attention of late is increasing driver pay packages and recruiting efforts, especially on the truckload side.

This summer, many well-known carriers, including Swift Transportation, Con-way Truckload and US Xpress made what amounts to a full-on press regarding increasing driver wages in an effort to secure more capacity and keep their wheels moving, as well as to prevent driver turnover at a time when it is becoming more difficult to recruit and retain drivers.

What’s more, most of the data regarding driver turnover, due in large part to low wages, and other issues like time spent on the road away from family, a sedentary lifestyle behind the wheel resulting in poor health patterns for many drivers, among others, are some of the many challenges carriers are up against.

“Today, the industry has in the range of 30,000 to 35,000 unfilled truck driver jobs,” American Trucking Associations Chief Economist Bob Costello said. “As the industry starts to haul more because demand goes up, we’ll need to add more drivers – nearly 100,000 annually over the next decade – in order to keep pace.”

Projections from freight transportation forecasting consultancy FTR Associates estimate that this problem is likely to get worse, with the driver shortage potentially in the 250,000 range by the end of this year, which Stifel Nicolaus analyst John Larkin said is going to create a capacity shortage which will translate into “fairly sizable rate increases” that might be steeper than what has occurred during the slow growth period over the last couple of years.

These statements all echo the common refrain that has been intact for many years: there are seats to fill, and there are simply not enough available, or willing, people to fill them.

At the recent Council of Supply Chain Management Professional (CSCMP) Annual Conference in San Antonio, Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report, made the driver shortage situation very clear with a simple sentence: “the driver shortage could be the leading problem for the entire economy.”

And this is being illustrated in many ways based on indicators like the increasing number of shippers engaging in dedicated contract carriage agreement, as well as increased outsourcing, too.

An example of the outsourcing, she cited, was how large shippers are using two separate 3PLs to secure more capacity than what is actually needed to ensure they have sufficient assets to have the needed capacity in place for the holiday rush between Thanksgiving and Christmas.

While this situation is a difficult one to be sure, Jeff Tucker, president of Tucker Worldwide, the nation’s oldest freight brokerage, said there is more than meets the eye, when it comes to the driver shortage and related over-the-road capacity issues.

Tucker explained that based on government data there are more than 10,000 carriers in business today compared to the beginning of the year, and over the last 30 months the total number of active for-hire carriers has gone up 20 percent from 155,000 carriers at the end of 2012 to 186,000 today that can be hired by any shipper, carrier, or broker today.

So, why is there so much talk about how hard it is to secure capacity, due largely to a dearth of available drivers then?

“A lot of them are small and upstarts, while the largest carriers will have you thinking that nobody wants to drive a truck,” he explained. “The fact is the economy is picking up, and people are willing to drive trucks.”

With that as the backdrop, he said that many shippers are simply looking in the wrong places, when it comes to finding drivers, or capacity.

“Every large shipper has the same carriers on speed dial and when the economy ticks up just a little bit, all of them call the same carriers and then, of course, the shipper will call one of the biggest brokers and the brokers will have you churning in the owner operator field and that is not capacity, or at least that is not the capacity shippers are used to dealing with,” he said.

Therein lies the problem, one could argue, when it comes to finding drivers and loads. Are too many shippers trying to get the same piece of driver and capacity pie, when there is really enough pie to go around to quell the constant concerns over the driver shortage and available capacity? Time will tell, it appears, but perhaps shippers need to start with bigger fork at least.