By Kyle Gholston, CTB, Vice President of Conexus, LLC
Talk to anyone in the supply chain today and you’ll hear a common theme, these are challenging times. We are facing global political unrest, economic uncertainty, threats of terrorism and a constant slew of changing regulations. And while most businesses are grateful to be climbing out of greatest recession of our time they are now being faced with one of their biggest challenges yet, a lack of domestic capacity due to a massive driver shortage.
Economists and industry leaders alike have been pointing to this day for a number of years as the need for truck drivers is projected to grow 21% from 2010-2020, faster than the average for all other occupations. But while the industry is ripe for new recruits, trucking companies are having a difficult to near impossible time finding and retaining enough qualified drivers to fill the trucks needed to match demand for current and future capacity. These days, it’s not uncommon for a trucking company to go through nearly 1,000 applicants before hiring one qualified driver. Up until recently, predictions of a massive driver shortage were temporarily staved off due to poor economic conditions; however, businesses are now starting to see their worst fears become a reality. But how have we gotten to this point? What are the major factors contributing to one of the greatest challenges of our time?
- First off, the traditional truck driver is aging. The days when young boys dreamed of growing up to drive on the open road have been replaced by daunting statistics such as high divorce rates, long hours and dangerous work environments. According to the U.S. Bureau of Labor Statistics, the average age of a truck driver in the United States is over 48 years old and that average continues to increase. Since 2000 the number of service and truck drivers age 55 or older has surged 19% to about 616,000.
- Unfortunately, as the labor force changes and baby boomers begin to exit the workforce, trucking companies are faced with the increasing challenge of attracting younger drivers – a challenge that is posing extremely difficult to achieve. Would be drivers and current ones, attracted by well-paying construction jobs which allow them the opportunity to come home every night to their families, are choosing to leave the road behind and instead opt to spend their days working on construction projects, which are on the rise as a result of an improving economy.
- Increasing new housing sales, lower unemployment numbers and a higher GDP are all signs of a recovering economy, and as the economy recovers, sales will increase causing a need for more trucks to move equipment and products. The American Trucking Association (ATA) reported a 2.9% increase in the for-hire truck tonnage index for January 2013 after a 2.4% increase in December of 2012. Since November 2012, the ATA reported a minimum of 2.4% growth each month showing an overall increase of 9.1% for that time period, and the numbers are only expected to increase. These statistics and more point to a rebounding economy in demand for greater volumes of shipments of all types.
- Complicating matters further, the FMCSA has made a number of changes regarding CSA requirements and Hours of Service (HOS) for drivers. One of the major changes taking place is the change in HOS from 11 hours at a time to 10 hours. This change alone could result in companies having to hire more drivers to make up for the driving hours lost, adding to the already significant driver shortage.
- Additional changes to CSA requirements, while striving to make the road a safer place for all drivers, will make it more difficult for trucking companies to secure qualified drivers. Many drivers who may have passed CSA guidelines prior to the changes may no longer meet the new requirements for safe driving. This will result in greater competition among trucking companies looking to hire qualified drivers and necessitate higher pay and benefits resulting in increased shipping rates. This too will take from the already shallow pool of qualified drivers necessary to move the goods and services required in a rebounding economy.
The end result is a tumultuous and uncertain climate for all aspects of the supply chain and inevitable price hikes across the sector for shippers. To help weather the storm, shippers today would be wise to strengthen their relationships with their current transportation providers and evaluate new ones that they can turn to in a pinch. No one can fully predict what the future will look like in the months and years ahead, but one thing is certain, it’s going to be a bumpy ride.