The seemingly perpetual marketwide truck driver shortage is not real, nor is it marketwide. While specific fleets can and do have driver shortages — i.e., unseated trucks — the trucking market quickly corrects.
There also are periods of capacity shortages, but those get addressed very quickly by the market.
With no barriers to entry, almost anyone can create a trucking company. That is exactly what has happened over the past four years.
Operating authority for motor carriers of property issued by the Federal Motor Carrier Safety Administration grew by 45% from July 2019 to August 2023, according to FreightWaves SONAR’s latest data, released in partnership with Carrier Details. Truckload demand as measured by the SONAR Outbound Tender Volume Index (OTVI) is only up about 11% during the same period.
The current difficult conditions in trucking are a result of too much capacity chasing too little freight.
Where does the perpetual driver shortage myth come from?
Generally speaking, the driver shortage myth stems from larger trucking companies that find it difficult to recruit drivers into their fleet operations. After all, fleets have to compete for truck drivers with other trucking companies. In addition, some licensed truck drivers go to work in other sectors of the economy, like construction and warehousing. But the fleets also have to compete against the growth of independent operators.
The American Trucking Associations propagates the narrative of the shortage. ATA members consist of midsize and large trucking fleets, which have increasingly become a smaller percentage of the trucking industry’s total capacity.
The ATA’s membership dues are indexed based on company size. For example, a large fleet with $4 billion in revenue will pay a much larger fee than a carrier with $50 million in revenue. Moreover, the ATA is a trade association and lobbying organization, which seeks to influence Congress when it considers legislation that impacts the trucking industry.
As the ATA encourages Congress to pass laws and appropriations that fund employee driver training and recruitment programs — while minimizing regulations that favor larger trucking fleets that employ drivers rather than independent owner-operators — it helps to paint a picture of a perpetual driver shortage.
After all, if Congress realized how fast capacity enters the market from independent operators when there is a capacity crunch, it would mitigate the need for employee driver recruitment and retention entitlement programs.
The FMCSA data tells the story about the growth of the small independent fleet
SONAR, FreightWaves’ proprietary data platform, collects data from a number of sources, including the FMCSA, the regulatory body that oversees the trucking industry. One of the FMCSA’s data sets tracks fleet registrations by the number of trucks that are assigned to a particular fleet.
SONAR breaks down the fleet sizes into cohorts to provide a more accurate reflection of the growth and fragmentation of trucking fleets.
In the SONAR chart below, the white line is the total number of tractors among fleets of one to six trucks; the purple line is the total number of tractors among fleets of seven to 11 trucks; the yellow line is the total number of tractors among fleets of 12 to 19 trucks; the blue line is the total number of tractors among fleets of 20 to 100 trucks; the orange line is the total number of tractors among fleets of 101 to 999 trucks; and the green line is the total number of tractors among fleets of 1,000 trucks and more.
Of the 2.9 million trucks in the market, 1.2 million are in fleets with more than 100 trucks — or just 41%. In 2010, fleets with more than 100 trucks comprised 54% of total trucking capacity.
Midsize and large fleets have problems recruiting new employee drivers, often due to lifestyle issues. Many drivers do not want to be away from home for days or weeks at a time, especially in a forced dispatch operation, which is typical of truck driver fleet operations.
For truck driving entrepreneurs who want to have the autonomy of their own operations, no such challenges exist. After all, if you want to dictate which loads make sense for you, based on destination, time in transit or even commodity, you can do so as an independent trucker with far more control than an employee fleet driver. Therefore, independent owner-operator entrepreneurs are constantly entering the market.
With the barriers to entry for new fleets becoming increasingly less burdensome, the number of smaller fleets in the industry will continue to grow. I broke down this phenomenon last week in an article on the growth of mom-and-pop trucking companies.
A downside to this trend? It is likely that boom and bust cycles in trucking become more pronounced and violent.
But for now, a capacity correction is underway and this is welcome news for everyone in the trucking industry.
All of the charts presented in this article are available for SONAR subscribers. Sign up for a demo today.
Robert F Baumann JR
WHEN I started, the companies had multiple drivers per truck and did slip seating.the shortage is also of drivers staying with one company, low pay. When the economy is good the grass is always greener on the other side of the fence.
Too many cut throats keep rates low, which makes it difficult for a small company to compete and grow. The shortage tends to go in cycles with the economy.
Anonymous
Many of these new carriers were financed by SBA loans. The easy money caused the meteoric increase in used truck prices from 2019-2021, then overcapacity, then rate collapse, then loan default. Those defaults are happening right now, but the banks have no worries because these loans are guaranteed by the SBA. (I have first-hand knowledge because I work in that space.) It’s a mess.
Mr. Fuller is correct; the boom-and-bust cycles are going to be closer together and more severe.
gmoney m.
The larger companies, eat up and spit out drivers with a 100% turnover, some with 300 percent turnover!. Many of these companies take drivers that have recieved money or grants from the federal government and should be heald accountable for their turnover or risk losing their pipleline of drivers. The states and feds should look at these companies and not allow young drivers to work for them or their loans will be reworked and reverted back to the drivers for full payment rather than a grant. We know who these companies are, they know who they are but nothing has changed in 25 years. One driver comes through the front door with a smile and handshake, 3 walk out, slamming the door on their way out.. Many of these drivers who have recieved tax payer money with no strings attached with hopes of a viable career, never get back behind the seat again. Next man up!
Rob
I have been say this every time somebody says there is a shortage. If you are an owner op or a small fleet owner trying to get a good rate. You want a small number of quality drivers, to keep rates up. If your upset that you package took 2 days to arrive instead of 1, then you call it a driver shortage. Coincidentally the same people who complain about the number of trucks on the road when they do leave the house.
Tony
I have been saying for years that there is not a driver shortage. The large fleets have issue getting and retaining drivers, but there are plenty of people out there that are skilled and able enough to fill the demand. The issue is that people are getting fed up with being treated like second hand citizens, being underpaid, and being away from their families. The issue isn’t a driver shortage, it is a management issue. The trucking industry, as a whole, needs to rethink how it does business and how it treats it’s employees. The large fleets, with help from the ATA, have been trying to force out the owner operators and the small fleets for years. They have created this issue.
John silveira
Again and again rhe lies about trucking and truckers are on and on…Never was a shortage of drivers and driver candidates , reality is simple it is a shortage of benefits and decent pay, that’s the issue.. one pays over 10k on fees ans education to became a UNTRAINED and INEXPERIENCED driver,and what the companies does; no secret here, the new driver becomes a driver “trainer” co driver, running team’s freight, stressing this new driver to the point of over 50% leave,simple give up, because of the ABUSE OF THOSE TRAINERS AND ITS COMPANIES. Some goes on, get they authority and the result is a bunch of rude, rage, drivers making all caind of errors and mistakes on the road, simple because, CDL schools are,indeed, mills, where local DMV officers easily pass those candidates, putting everything and everyone at risk. Companies love this system because they make millions on exploiting those new drivers.. DOT and FMCSA are to busy. Making stupid and unrealistic rules. To care, troopers are to greedy giving all caind of pursuit and harassment to commercial drivers and vehicles, cities and citizens are prejudicial against truck and truckers, because we are big and noise.. now add all up and anyone can figure out, it’s nos shortage. But greedy and unprepared system, where experienced truckers are paying for the newcomers actions. YES TRUCKERS ARE THE MOST ESSENTIAL FOR EVERY SINGLE NEED,yet we are treated as criminals and uneducated people, well some drivers are to be shamed of.. but our sacrifice has been unnoticed for decades, the disrespect from business and citizens needs to be, at least controlled, but troopers and LEOS are.to busy pursuing truckers,
I have my own company, 3PL local. And even paying 30,00 a.hour plus ot after 8 hours monday to friday, it’s hard to get decent,honest, hard working drivers, and if I get someone from one of those cdl school..they need to be schooled again..
Not shortage, just exploiting and abuse towards drivers.
Right whing chicken hauling
Everyone knows that, the drive shortage myth is created by mega carries,wall stret crooks, For the reason known they need more victims for thier homeless shelter on 18 wheels, 3 weeks out 2 days home. There drivers are treated like human waste.
And that is where huge turnaround comes from. Needless to say there is lot of book cooking going on in those same companies, is one of those things, Everyone knows it,just keep it look legit.
Zud
I would ask for a reclassification on the term from shortage to a turn rate on drivers. It’s a lure profession of someone not being over you on a day to day job. Some can get into the life style of doing it and others exit quick when they realize your out and not on the next exit from home. My thinking is now from a trucking company’s prospective, you know your frieght base and what needs to done and recruit the right individuals to fit the role. However, when you have tractor assets sitting you see the pressure to fill them without hiring the right individuals. I can say many individuals are not hireable but they are in the market and they are what I call the churn.