New era coming in trucking human relations, experts say
November 12, 2013
It’s a new era in trucking employee relations as the virtually union-free industry—except for UPS, YRC and ABF and a handful of other Teamster-related companies—copes with a pending labor shortage that is bad and threatens to be even worse.
As the industry copes with forecasts of a potential driver shortage of as many as 160,000 as soon as 2016, truckers already are coping with driver turnover that exceeded 100 percent on average for the last year full statistics are available.
In 2012, turnover in the trucking industry was 112 percent. That lowered to 94 percent in the first quarter this year, according to the figures supplied by the American Trucking Associations.
“Trucking is not a complicated business—we move stuff from A to B,” said Dee Dee Cox, director of human resource development for Old Dominion Freight Line, a major LTL carrier with 222 terminals. “How we treat people is our secret ingredient. Our secret is to find the emotional connection with the people we lead.”
Keeping the Teamsters union out of a company should not be the primary focus of a non-union carrier, human relations experts said at a panel on the future of trucking at the 26th annual North American Transportation Employee Relations (NATERA).
“We never really said the ‘U-word,’” said Cox, instead emphasizing the need to “communicate, communicate, communicate. “You can’t over-communicate.”
Communication pays. ODFL is the nation’s most profitable LTL carrier, earning $159 million the first nine months of this year, posting an 85.0 operating ratio, a slight improvement from the 86.4 OR the first nine months of 2012.
ODFL’s success today comes in the wake of a decision by senior leadership 15 years ago to diversify away from merely being a Southeast regional LTL carrier to being a total transportation solutions company.
At ODFL, all workers are invited to watch monthly webinars at their convenience. Supervisors are instructed to know all their employees and their family names.
“And if their son plays on the football team, they should find out when their games are and try to go,” Cox said. “It’s not easy, but that’s how we do it.”
“Fifteen years, we had a vision—to be the premier transportation provider in a union-free environment,” Cox said. “We want (employees) to understand our values,”
Ron Fetty, senior director of industrial relations for ABF Freight System, the nation’s sixth-largest LTL carrier, recently was part of year-long negotiations with the Teamsters union for a 6.5 percent wage concession in a new contract through 2018.
Fetty recalled ABF negotiating alone with the Teamsters committee this time.
That’s because except for YRC-related companies, nearly all the other Teamsters-affiliated companies have exited the industry since the Motor Carrier Act of 1980 largely deregulated the industry.”
“We have to listen, and listen well,” Fetty said. “We have to communicate our needs, and communicate well.”
“We got a good contract—but it was a two-way street,” Fetty said. “We worked together—for the most part—that will help us grow and prosper as a company. I give them (Teamsters) a lot of credit.”
At non-union carriers, the issue is not so much negotiating contracts as it is finding compliant drivers able to satisfy the government’s ever-toughening standards for drivers.
It costs trucking companies as much as $10,000 to find and recruit an able-bodied truck driver.
“Retention (of drivers) affects everything—your profit, your brand, your operations,” said Lee Miller, president of Miller Transporters, a 72-year-old family-owned tank truck company headquartered in Jackson, Miss., “It’s good to attract them through the front door. But it’s more important to keep them from leaving out the back door.”
Miller said the worst thing carriers can do is hire the wrong type of driver. “It’s not about the dollars, it’s not about the equipment, it’s all about the people,” Miller said.
“You have to find people who buy into your culture—ours is safety and service,” Miller said.
Jon Jones, a trucking veteran executive for Watkins Associated Industries, Lakeland, Fla., a group of four trucking companies that includes reefer carrier Watkins Motor Lines, said he had the “utmost confidence” that the industry would be able to attract enough drivers in the coming years.
FTR Associates has projected the trucking industry will need to attract as many as 160,000 new drivers by 2016. A combination of changing demographics, tougher safety demands associated with CSA 2010, stagnant wages, increased drug and alcohol testing and other workplace changes are cited for reasons behind the shortage.
“There is no solution—everybody has a solution,” Jones said. “Our job is to not fit butts in the trucks. Our job is to find somebody to be part of the family.”
Watkins, which traces its history back 82 years (and sold the bulk of its operation to FedEx Corp. in 2006 for $780 million to form the basis of what became FedEx Freight LTL operations), prides itself on going slowly in expansion.
“We don’t want to leave a big wake,” Jones said. “We always look to blend in—not swim upstream.”
Educating workers on the virtues of trucking is paramount for companies to cope with the driver situation, Jones said.
“We have a good job for folks,” Jones said. “Driving is on the cusp of being a different job in the future.”
John Pryor, vice president of human resources and safety for Southeastern Freight Lines, a leading regional LTL carrier with 7,200 employees said his company recently changed its operations because of the Affordable Care Act. He said Southeastern’s self-insured health care costs eat up about 7.5 percent of total revenue, and is rising at what he called an unsustainable rate.
He said Southeastern recently changed its operations so that part-timers would not work more than 29 and a-half hours—just below the level set by the ACA for mandatory coverage.
“People are nervous right now,” Pryor said. “People don’t know. We don’t have a lot of answers right now. We’re evaluating. We’re not sure what the right thing to do is.”
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