Same concerns remain, when it comes to the truck driver shortage

If someone asked you point blank: “what is the biggest issue in freight transportation today?” there is a better than good chance that the truck driver shortage would be at the top of the list.

Why wouldn’t it be either? It is a topic of daily discussion at every industry trade show and conference, while also getting a ton of attention in the form of commentary or data being issued fairly frequently. If it has not been for you, then perhaps you have going to different events.

And it is no secret as to why the truck shortage remains intact, whether it is due to an aging workforce, too much time away from home, salary and benefits, a minimum age requirement of 21, and many other things, too.

That said, those have been some of the overarching themes related to the driver shortage, something we have covered in-depth on this website and also in the pages of LM. It is our job after all.

Related Article: “The never-ending truck driver shortage”

But what got me thinking about it, again, was quarterly data issued by the American Trucking Associations (ATA) this week.

According to the ATA, the driver turnover rate  for the fourth quarter of 2017 for large truckload fleets (those with more than $30 million in revenue) dropped seven points to 88%, signaling its first sub-90% reading going back to the first quarter of 2017.

Even though that number is trending in the right direction, ATA Chief Economist Bob Costello commented that the driver market remains tight, with the driver shortage remaining a real concern for fleets and the industry.

And looking ahead, Costello noted that: “If the economic climate continues to improve, I expect both turnover and driver shortage concerns to rise in the near future.

ATA’s data also noted that the driver turnover rate for small fleets in the fourth quarter was down four points to 80%, with the turnover rate for large and small fleets, respectively, each up 14% annually.

ATA’s Costello also commented that despite the continuing tight driver market, he thinks there are a couple reasonable explanations for the dip in turnover this past quarter,”

First, freight demand was very strong, which may have encouraged drivers to stay at their current fleet because they were making even better money with strong volumes,” he said. “And second - many fleets implemented or announced pay increases last quarter, which may have disincentivized drivers from moving to new jobs.”

Costello is spot on in citing improving freight demand and pay increases as reasons for not as much turnover, but, at the same time, the myriad challenges remain intact.

A good example of that was apparent in an October 2017 survey of 1,500 motor carriers conducted by the American Transportation Research Institute (ATRI). The ATRI survey found that the driver shortage topped the list of concerns the industry is facing, marking the first time since 2006 that it was the chief concern.

To be sure, that may be viewed as a somewhat obvious finding, but it in no way quells the larger issues at hand and the question of what is going to happen if things keep trending this way. There are not a ton of easy answers at a time when all supply chain stake holders needs to be making this a top priority.

Also in October 2017, the ATA issued a report, entitled “Truck Driver Shortage Analysis 2017,” which examined the current driver shortage situation, with analysis on where things may be headed and what needs to happen to prevent a bad situation from becoming even worse down the road.

Perhaps one of the most telling stats included in the report was that 70.6% of freight tonnage moves on U.S. highways, as per the ATA’s Freight Transportation Forecast 2017 to 2028, which was released in 2017. Another stat is that 43% of trucking’s operational costs are allocated towards driver compensation and stands as the largest operational cost for a motor carrier.

ATA’s Costello wrote in the report that “as volumes increase, the existing driver pool is only more strained.”   Could that be any more spot on?

No, it really could not be, it seems. While the economy has shown steady signs of improvement, many challenges remain as they relate to the ongoing driver shortage. Let’s hope there is more action than reaction occurring, as the narrative has not really changed.