According to the American Trucking Association, the United States is short nearly 30,000 drivers. Analysts are on the fence about why this is happening. Shortages are common in every industry during periods of economic growth. Cheaper gas prices and an increasing economy mean more drivers are needed to meet demand.
Analysts on the other side of the fence claim the stagnation is due to excessive regulations, low pay, and a lack of interest. These experts predict that unless the current problems are fixed, the driver shortage is going to keep getting worse. So which is the truth?
The Deficit’s Beginning
The number of trucking positions decreased sharply during the housing recession. Less people were buying homes and moving furniture from one home to another. Retailers were hit extremely hard in 2008, and suffered for years as the economy struggled to get back on its feet. Box stores offering bulk deals saw small increases, while some retailers were losing anywhere from 5-25% of sales per month in 2009. Stores that relied on the housing market were affected particularly hard. Home Depot lost more than $300 million in the third quarter of 2008.
Trucking was heavily affected by the 2008 economic crisis. Trucks move raw materials from storage to manufacturing sites. Trucks move completed products to warehouses and retail stores. They support hospitals, banks, and construction sites. 70% of freight moved in the United States is done by truck, which is more than $671 billion worth of goods. After the severe downturn, tens of thousands of truckers lost their jobs and were forced to retire early or switch careers
The driver shortage did not begin with the housing crisis. In fact, the trucking industry cited a lack of talent in the middle of the crisis. Now that the market is recovering, the shortage still exists, but is more keenly felt. Trucking, as a rule, is not an attractive industry for young people to enter. Most of the turnover, hiring’s and firings, happen to the same people moving from carrier to carrier.
And the turnover rate is extremely high. In the first quarter of 2014 turnover was at 92%. This was the ninth quarter in a row turnover exceeded 90%. Young people that do enter the field are appalled by the work schedule and low pay rate. The ATA cites pay and a lack of new generational interest as two major factors that contribute to the workforce shortfalls. It is not just the newer generation, either. Veteran drivers returning from active duty realized first-hand the time they had lost from their families, hobbies, and friends. Some of them opted for a job at a fixed location close to home.
Many companies also struggled through the housing crisis. Independent contractors and smaller carriers lost permanent drivers, equipment, and valuable permits needed to continue their business. Despite the improving market, these businesses present a risk due to their prior failure, and have a harder time obtaining new credit.
Simply put, compensation for drivers must increase. Analysts predict if the trucking industry maintains its current trajectory, the shortage will increase to more than 200,000 unfilled jobs by 2022. Some companies are heading this up to improve salary and compensation. One company invested an additional $14.2 million in compensation in 2014, increasing wages per mile to make the long hauls more exciting for drivers. Until this problem resolves itself, we must simply wait and watch.