The logistics industry has been wrestling with the infamous driver shortage for years. This issue has only been exacerbated by the coronavirus pandemic, and the American Trucking Associations (ATA) predicts the industry will be a record 80,000 drivers short in the next year.
While the driver shortage has been growing, demand for transportation services has also been rising. Consumer spending surged back to life in late 2020 after being suppressed by the pandemic earlier that year, and demand across most sectors has remained elevated since that point.
“We’re seeing growing demand for less-than-truckload services as the industrial economy continues to rebound, as well as very strong growth in e-commerce,” said Tavio Headley, vice president of investor relations at XPO Logistics. “With the strong growth in e-commerce, we’re seeing that drive more retail shipments to LTL carriers.”
While XPO is more prepared than most companies to compete for employees in a tough labor market, companies across virtually all industries are experiencing labor shortages right now. The unemployment rate was only 3.9% in December, according to the Bureau of Labor Statistics. This suggests that there simply are not enough workers to fill all the jobs created by the latest economic surge.
“The labor market is extremely tight, not just in the trucking industry. It’s tight across the board,” Headley said. “We have over 2,000 positions that we’re trying to fill in our LTL business, and that includes commercial truck drivers as well as dock workers. We’re making significant investments to ensure we are competitive in this very tight labor market.”
To remain competitive, XPO recently completed a market-by-market analysis of its compensation and benefits packages, making tweaks where necessary. The company also streamlined its hourly pay structure, reducing the amount of time required to get to the top of its pay scale.
Offering a strong compensation package is only the beginning of what XPO is doing to attract and retain new talent, however. According to Headley, the company is focused on hiring diverse employees, recruiting directly from largely untapped talent fields.
“We’ve been partnering with veteran support groups, historically black colleges and universities, and support organizations for people with disabilities,” Headley said. “We’re also proud that we were recognized by the Women In Trucking Association as a top company for women to work for. It is no secret that the transportation industry is male-dominated. We’re striving to close the gender gap by promoting and recruiting all roles, from the boardroom to the driver’s seat.”
XPO has also put a significant amount of time and money into recruiting younger folks. With the average age of truck drivers on the rise, this is an area of concern for most companies. XPO is taking a multipronged approach, meeting young people where they are and offering them hard-to-pass-up opportunities to join the team.
“We’ve been ramping up social media campaigns and targeted advertising. We’ve also been working with external driver school partners, as well as specialized recruiters, in specific regions,” Headley said. We also have a competitive edge in that we have 130 in-house driver training schools in the U.S.”
When people go through XPO’s driver training programs, they receive free schooling and an attractive XPO job offer upon completion. The company saw approximately 900 driver graduates in 2021, and that number more than doubled in 2019. In 2022, XPO is targeting close to 2,000 driver graduates. New hires who go through XPO’s driver training programs tend to be stickier hires, according to Headley.
Once hired, all XPO employees are invited to participate in the company’s Grow at XPO program. This program is designed to help workers develop their professional capabilities and move through the ranks faster. While it is open to employees across all departments, the program’s primary purpose is enabling XPO’s frontline workers to grow into higher-paid positions within the company. This program creates a way for employees to advance, improving retention rates.
On top of the growing driver shortage, the logistics industry continues to face equipment shortages as well. XPO is also meeting these challenges head-on in order to continue serving customers in the best way possible.
“Capacity is still tighter than ever, and that’s why we’re focused on strategic initiatives that will add capacity to our LTL network,” Headley said. “In addition to what we are doing with drivers, we are adding equipment and strategically building out our network of LTL terminals.”
Over the next 12 to 24 months, XPO plans to expand its North American network by about 900 doors, or about 6%. This expansion will allow the company to move more freight, work more efficiently and capitalize on surging demand.