While the country shut down for the pandemic, the trucking industry shined. The current market was the light at the end of the tunnel: high volume, high rates and increased compensation for drivers.
The stars have seemed to align for the average long-haul driver, but ironically, trucking companies are having difficulty locking down new drivers.
In a recent Randall-Reilly study, truck driver job postings in 2020 rose by more than 300,000, but job seekers rose by only 70,000.
In the report, 33% of drivers said their top concern was paying their bills, while 68% agreed that they were not paid enough. Nationwide carriers like Knight-Swift, Cheema Freightlines and Forward Air have listened and recently raised pay for drivers.
Yet employment data from the Bureau of Labor Statistics shows after the dramatic decrease prior to the pandemic, trucking companies have not been able to increase their driver labor force back to pre-COVID highs.
Recent unemployment data showing that individuals are going back to work raises the question: Where did these truck drivers go?
The response might be as simple as two words:
Final mile.
Long-haul drawbacks
With regard to over-the-road trucking, drivers have found many issues that go beyond driver pay. According to the Randall-Reilly study, the following are among reasons why drivers would consider changing jobs and driving for another fleet:
- 21% want to choose their routes and hauls.
- 14% want more time at home.
- 6% want a clear career path.
On the subject of one thing that could attract and retain drivers:
- 18% want guaranteed minimum pay.
- 11% want more regional hauls to come home more.
- 10% want a certain amount of home time each month.
Drivers are now realizing that final-mile delivery addresses these concerns. Expectations about its immense growth in the future make it even more appealing.
Final-mile delivery boom
According to McKinsey, e-commerce has experienced 10 years of expected growth in Q1 of 2020, with 60% of consumers expecting to integrate online shopping into their post-COVID lives. To keep up with this consumer demand, there will need to be an increase of final-mile drivers for on-time delivery.
Unfortunately for long-haul carriers, data suggest that qualified drivers are starting to make their moves toward this side of the industry.
There has been a significant increase in one section of labor over the past year: courier and messenger services.
The SONAR chart below shows a continuous rise in these services, including elevated highs for seasonal increases in demand. While most employment sectors in transportation have stayed relatively flat, final-mile employment has shown a continual increase over the past five years.
Final mile delivers answers
The final-mile transportation sector has a much lower barrier to entry than the typical medium- to heavy-duty truck driver faces.
In an interview with FreightWaves, David Olshansky, co-owner and chief operating officer of recruiting firm DriverSource, explained how the final mile is creating a new hurdle for recruitment.
“The Amazon effect is creating a shortage of drivers, and others like DoorDash and Grubhub are creating a new industry where drivers can make the same amount of income and they don’t have to get involved with DOT regulations,” he said.
Amazon, a leader in final-mile delivery, lists only a few requirements to become an Amazon Flex driver. This program allows drivers to use their own vehicles to deliver packages for the company, only requiring that its employees be 21 or older and have a valid driver’s license, a midsize or larger vehicle, and a smartphone.
Many other final-mile services limit their requirements to these few items, and some, like DoorDash, drop the age to 18.
These programs allow drivers to make their own schedules, control their pay and limit their exposure from increasing costs, including insurance, that many owner-operators deal with.
Historically, final-mile carriers pay lower premiums because of the nature of their business due to the familiarity of their routes in a specific area of operation.
“Insurance is absolutely killing [trucking] companies right now,” Olshansky explained. “I have heard quotes of $30,000 or $40,000 per truck per year for motor carrier insurance.”
The barrier to entry is higher because of the need to obtain a commercial driver’s license to become a long-haul driver of medium- and heavy-duty trucks. The following conditions must be met:
- Be able to safely operate a medium- to heavy-duty vehicle.
- Be physically qualified to drive a commercial vehicle under Federal Motor Carrier Safety Administration standards.
- Have a valid medical certificate, including a drug test, completed by a registered medical professional.
- Obtain a valid road test certificate.
Olshansky thinks issues on both ends of the driver age spectrum arise from these standards.
“I am a firm believer that there are a number of younger individuals that are not wanting to be a part of a drug-testing type of industry,” he said. “Also, [veteran] individuals are wanting to get out of the industry because of it.”
How recruiters are confronting these needs
Olshansky explained that instead of just raising pay for drivers, trucking companies need to invest in different areas of driver concerns.
“We have been telling a lot of our clients to focus on upgrading their equipment and doing what you can to have a driver home every night.” he said.
In an interview with FreightWaves, Scott Smith, chief executive officer and co-founder of P&S Transportation, described the same difficulties of competing with last-mile logistics jobs that often get drivers home every night.
Smith said this was the first time truck drivers are choosing local delivery routes over long hauls.
“We are mainly an over-the road company, and we struggle with work-life balance,” he said of maintaining his fleet of over 1,300 trucks, operating in 15 locations across the U.S.
Olshansky suggested considering a different fulfillment process for customers to help get drivers home more often.
“We will work with over-the-road companies in an effort to change their route structures to where we can have ‘home every day’ positions,” he said. “Having different relay points to help turn it into a ‘home every day’ position can help open up a pool of potential drivers.”
He emphasized that trucking companies will need to become much more strategic about driver recruitment in the future, and those reluctant to invest in these areas will continue to struggle with finding drivers.
“One thing is for sure: Companies that are not willing to change their way of thinking in this industry are going to be the companies that don’t make it in the long run,” he said. “There are many challenges coming from different fronts, and things are not going to get easier.”
Click here for more articles by Grace Sharkey.
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Leo Slubicki
I was a long haul trucker for 20 years.
Truck drivers often times get disrespect, sometimes by their own employers.
Waiting time at docks or truck repairs: free.
Get a short haul load with excessive time before your appointment. Too bad. You get paid by the mile. Waste a day…..for no pay.
I have an endless supply of stories where my time was wasted…..for free.
Slow freight, like during a recession, and you can’t get reloaded until tomorrow? No pay, and you can sit in your truck.
But, companies don’t want to pay by the hour or per day. Drivers are expected to give their time away….for free.
UPS doesn’t seem to have to advertise to get drivers. They pay well, that’s why.
John
So…the younger generations want truck driving jobs and truck driving paychecks, but they don’t want to do truck driving work.
Got it. Par for the course today. Let’s all change for them.
Real_trucker
Ive seen th seen these “final mile” jobs and their ao called “great” pay. Cool, $15 an hour driving jobs will be most welcomed, lmfao. “But but, youre home every night” its almost the industry chant as a justification for lower pay.
Char McKeon
I’m looking for a new job because I want something closer to home. From what I’ve seen, the biggest problem with driver retention is expecting more work and higher qualifications from the driver without compensation.
Companies want endorsements and TWIC cards for low wages. They put so many computers in the trucks now, that drivers are micromanaged. In-cab cameras might be good for employers and insurance companies, but they don’t promote a welcoming environment to the driver whose making the company their money. We are governed by ELDs and expected to still make impossible load pickups and deliveries.
Hometime is usually secondary to these companies, especially the big ones. Then, when you do get to go home, they make sure the miles are so low a driver can’t afford to take their earned time off.
It’s a very unrewarding career for all the work expected. So of course drivers will choose to work closer to home for the same pay, less certifications and less drama.
Dennis Mogan
TURN BACK OPERATIONS On specifies routes trucking companies should consider turn back assignments. Using the Chicago to Los Angeles route with the Chicago to Omaha leg as the template. Westbound rig, assignment 101A leaves Chicago at 6 am and arrives at Oxford, Iowa (midpoint) at 11 am Eastbound assignment 100 A leaves Omaha at 6 am and arrives
Oxford at 11 am. The drives would exchange equipment and return to their home terminals, arriving back at their respective terminals with about 500 miles and 10 hours of duty time. Oxford would be an interchange terminal and be exclusive to the trucking companies signature to the turn around process. The facility would be first class, clean and well equipped with lavatory, shower and lounge amenities. Fueling capabilities would be a plus. The facility would be supported by the users similar to airport landing fees.
QUALITY OF LIFE would be greatly enhanced as the drivers would be home each day. Away from home expenses would be eliminated, meals and lodging where applicable.
Trucking companies need to think outside the box for future success. Money is great but if jobs provide little quality of life, money serves few benefits to overall health and family.
Manuel Acosta
Most of the mega carriers in this country in 2019 could’ve care less about driver pay and retention of the drivers that they employed. This mega carriers did away with dedicated routes and had OTR drivers cover the dedicated routes. My question to mega carriers that did this, how well has it worked out for them.
Big noc
Per article the big national carriers may need to change their strategies about drivers work & home life now in these current conditions. I agree with both oddly, not a one size fit all, yet one should find their fit. I got away from the long haul for more home time bottom line, things are not like they were decades ago and DOT well they keep increasing their requirements which makes it tougher.
Adrienne Bonne
As for owner operators, we stay out for up toy 3 to 4 months at a time. If those wheels aren’t turning, you’re not going to make that new truck pay for itself.
As for freedom there’s no such thing. Home time for us is when our truck requires repairs and maintenance.
Most owner operators are extremely hard working people. We still have to deal with rude customers and staff. There’s no friendliness like there was back in the 70′ s.
We can handle the rule’s and regulations that gov and states make.
We’re the backbone of this country. No trucks, no supplies.