There is no denying that the trucking industry is in a state of flux right now. Even though demand is rising, the industry as a whole is facing a monumental shortage of qualified drivers. Just how big is that shortage? By the end of 2015, the driver shortage had ballooned past 45,000. Some estimates indicate that the shortage could reach over 150,000 by 2024. That is a scary thought, and one that will certainly drive up the cost of truck shipments.
But why is there a shortage of drivers and how can the industry turn it around? First and foremost, wage growth has been stagnant for 30 years in the trucking industry. Over the last year or so, trucking companies have tried to fix the situation by offering better pay and larger signing bonuses. However, as the economy has recovered, the number of industries that are hiring is increasing. And this has caused would-be truck drivers to seek out other opportunities, generally ones that pay at least as well without all the travel time on the road.
Another factor that is impacting the shortage is the average age of drivers. The truck driving industry employs an older generation of workers. The average age of truck drivers is creeping north of 50, with many of these drivers on the verge of retirement. The industry is simply not attracting a younger set of drivers of these days. As more drivers retire, the shortage will only increase.
A few months ago I was a conference where one of the panels examined the trucking industry from the carrier’s perspective. In the panel, carriers talked openly about what they are doing to attract more qualified drivers, and what they see as the future of the trucking industry. Everyone was in agreement that there has to be a shift in thinking and that something must be done about the driver shortage or the industry as a whole is in serious trouble.
The first theme to emerge was around driver pay. According to the American Transportation Research Institute (ATRI), 34% of trucking’s operational costs per mile is driver pay. As fuel prices have decreased, it pushes driver pay as the top operational cost for carriers. As demand increases, it only drives up the cost per driver. However, the carriers were in agreement that better pay, and better benefits, will help to attract more qualified drivers. As with most problems, if you throw money at it, it can be part of the solution.
The second theme to emerge was around autonomous, or driverless, trucks. I’ve actually written about this before as a possible solution to the driver shortage. Driverless trucks could be part of the solution, but considering that any autonomous truck currently in production still needs a qualified driver in the truck while it is operating, it will not be the solution everyone is hoping for. But, it does have its own unique set of benefits, including: no lost time to snacks, meals, or hours mandates; no fatigue issues to deal with; and resources can be dedicated to other tasks, to name a few. However, in the wake of the fatal Tesla autonomous car accident, public perception of autonomous vehicles is likely to set the industry back.
The third theme to emerge, and the one that generated the most interest as a viable solution to the industry’s driver shortage, was to actively recruit new segments of the population to join the industry. There were two main segments that carriers are actively recruiting. The first is females. Currently, only about 6% of drivers are female, despite the fact that females make up 47% of all US workers. This represents a major untapped market. A major draw for women into the trucking world is the fact that they will make the same money as their peers, as they get paid by the mile or the load of the percentage. Schneider, along with many other carriers, have converted their entire fleet over to automatic transmissions. This is a move geared entirely towards recruiting female drivers.
The second population segment that these companies are aggressively targeting are millennials. With the average age of truck drivers trending up, new recruits need to be young. Better pay packages and benefits are one of the ways carriers are trying to woo millennials. Carriers are also updating technology within the cab, as millennials are generally accustomed to receiving information on demand. One of the big issues, however, is the fact that current age requirements to drive a tractor-trailer across interstate lines is 21. This eliminates eligible employees between the ages of 18 and 21, who will find work elsewhere.
The driver shortage is showing no signs of slowing down, and is putting the future of the trucking industry in flux. If the shortage continues to balloon to what some analysts expect to be 150,000 by 2024, the cost of using trucks, and the timeframes in which goods will be delivered, could cripple the industry. However, companies are looking at a few new ways to reduce the driver shortage. First, they are offering better salary and benefits packages for new drivers. Second, they are looking at the possibility of autonomous trucks as a stopgap for the problem. And third, and most importantly, carriers are actively recruiting individuals from untapped labor pools: females and millennials. This last effort could make the biggest difference in the future of trucking.