Driver shortage is increasing, but signs continue to point positive for industry in general

ATA Chief Economist Bob Costello said the industry driver shortage has now reached 50,000 drivers. ( Photo: Shutterstoc k)

The driver shortage is increasing, according to Bob Costello, chief economist of the American Trucking Associations, but it’s not as bad as many people believe.

Costello updated ATA’s official driver shortage count for the first time since 2015, and after asking the audience at ATA’s MCE 2017 conference in Orlando what they thought it was (more than half of respondents believe it to be above 75,000), Costello said it is 50,000.

“I’m not surprised [many guessed more] because it feels more to all of you,” Costello told the audience. While 50,000 is a lot of drivers, it could balloon to 174,000 drivers by 2026 if nothing changes to attract more to the industry. “First and foremost, it’s a demographic story. There are also more job options today than ever before.”

Derek Leathers, CEO of Werner Enterprises, added that it’s not so much a lack of applicants, but a lack of qualified applicants.

“It’s a quality driver shortage,” he said. “It’s the ability to find drivers who meet all the criteria. Part of that is more transparency into past transgressions” that is part of the driver screening process today.

Leathers said that Werner has received over 100,000 driver applicants this year, but has a hiring rate of just 2.7% because many are not qualified for one reason or another.

Rebecca Brewster, president of the American Transportation Research Institute (ATRI), noted that 55% of the current workforce is over the age of 45 and only 4% is between the ages of 20 and 24.

“We are not bringing in the people to the industry we need to fill those retirements,” she said, noting that only 28% of schools in America have any programs that highlight the trucking industry as a potential career.

ATRI is developing a tool to try and validate younger drivers, perhaps giving a pipeline to carriers to attract new talent.

During the session, Costello also updated some additional industry numbers. Driver turnover in the first half of 2017 is 82% in the truckload segment (although the second quarter saw a 90% rate) and 9% in LTL, he said.

Driver pay is also trending up. Brewster noted that ATRI’s Operational Cost of Trucking found that driver pay and benefits is now the top cost driver for fleets. Driver wages climbed 5%. She also noted bonuses paid to drivers remain strong, with the average safety bonus at $1,499 and on-time delivery at $1,946. Starting bonuses are now $949 and retention bonuses are $1,143.

“We as an industry are looking at more and more innovative ways to reward drivers,” Brewster said.

Leathers added that it’s beneficial for fleets to reward their good drivers and the industry should be spending more in that area. At the same time, he believes that while the industry is doing better at paying drivers, it does come with a cost and that is higher operational costs.

Costello also said he is projecting a 2.5% increase in truckload loads for 2017 following a 0.1% increase in 2016, and a 1.1% increase in LTL loads after a 0.7% drop in 2016. Both he and Leathers believe the growth is “sustainable” growth not being influenced by many outside factors.

“I think it’s picked up and I think it’s picked up in more sustainable ways,” Leathers said. “We’ve been through a lot of intermodal optimization and packaging and shipping optimization … but it’s more sustainable this time.”

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Categories: Economics, Intermodal, News