September 2010, TruckingInfo.com - Fleet Innovators
Heavy Duty Trucking's 2010 Truck Fleet Innovators offer their viewpoints on the coming capacity crunch and driver shortage.Ben Bauman, President and CEO, Bolt Express
The shrinking pool of qualified drivers for hire is starting to become a reality, where before was just a conversation. It has become evident in several ways. First, we are starting to see the freight rates increasing due to capacity shortage; second, we are seeing recruiting initiatives to better attract and retain drivers. Bolt Express has implemented several new programs related to driver pay and retention; we have added additional staffing in the recruiting area, and we have created a carrier development position to increase capacity within our partner carrier program.
There is currently a driver shortage of 200,000. By the year 2012 it is estimated that the driver shortage will reach 400,000. The shortage is from a variety of factors.
CSA 2010 - many drivers will become too big of a risk factor for companies to hire them.
FMCSA - as they continue to demand higher health standards, many drivers will become disqualified to drive.
Death - the average driver today is approaching 51. Life expectancy is currently 61, and the same group is getting older.
Lawsuits - the ever-growing number of lawsuits related to accidents will make certain drivers uninsurable.
Health insurance - the rising cost of health care will make it unaffordable to retain unhealthy drivers.
Bolt Express realizes that the traditional methods of addressing these issues will not work in this new economy. The driver with a CDL and a heartbeat is not going to work any longer.Jim Burg, President/CEO, James Burg Trucking
We are experiencing challenges finding qualified drivers, like we have in prior periods. However, this time around will be much more severe.
Demographics show that who we have historically employed will not be available in the numbers we need to keep up with attrition. The lifestyle that some segments of the industry demand are not being sought out as enjoyable careers. If current drivers are not encouraging their offspring to be involved in the industry, who will we find? We previously had an influx of immigrants which softened the shortage. I don't believe our government is going to expand our immigrant work force when unemployment is expected to remain over 9 percent for the next 36-39 months.
New safety programs such as CSA 2010 will crimp new hires and reduce competition. (Here at JBTC, since the implementation of the FMCSA Pre-Employment Screening Program, 50 percent of all applicants that previously would have been given an interview were not.) Possible regulation such as an hours of service re-write, will decrease the industry's productivity without proven cost savings from reduced crashes. Challenges to the use of independent contractors and individual states' pursuit of taxes and worker's compensation fees will also have an effect on overall driver capacity.
All these conditions point to the "Mother of all Driver Shortages."
Our current drivers are the company's best asset. They are experienced, trained, professional - walking testimonials of the company's treatment of its employees. I have been telling them not only how valuable they are to us now, but how much better their careers will be in the future.
Of course, this is all talk without action. We recently absorbed the entire increase of our health costs for the upcoming renewal. I am also taking small steps to improve the pay for drivers who perform safely and without incident. I will be expanding on this over time and as the company has resources. Future and additional business is being quoted using the expected increasing costs of drivers. This may slow our short-term growth, but it will ensure that the growth we do enjoy will be sustainable.Jim Mickey, Co-owner and President, Coastal Pacific Xpress
I expect in the months ahead we will see developing signs of a supply chain crisis of insurmountable proportions. Our fool's reality of cheap and abundant trucking capacity is nearly over. The signs are beginning to emerge on many fronts, mostly notably on the driver application numbers and quality of those applicants.
The prolonged financial uncertainties and contracted economy that caused the capacity glut in the trucking industry also completely closed off new entrants to the career of truck driver for the past several years. In addition to the many that have left the industry due to aging, there are those who have exited due to dissatisfaction with the poor working conditions of these past few years, not likely to return. And of course, it is a very rare company who maintained much of a training and development program through these past few years.
We as an industry have even less to offer the prospective new driver entrant than we did pre-recession, as our margins have no room for additional driver wage components at this time. The general job conditions continue to decline, the pay cannot be considered an incentive, and we struggle in a society where the job has very little respect or allure.
The gathering support to raise the bar on the basic driver qualifications (think CSA) has the potent effect of reducing not only the current ranks of men and women, but also reducing the pool of potential new recruits due to the reluctance of fleet managers to take on applicants with the potential to be less than average performers.
Our local action is simply to be keenly aware of the changes in the larger world around us, to be prepared to ratchet up our freight rates in tandem with the inevitable pressure to pay a much higher wage to attract manpower in a supply-dictated labor market, to have the internal resources to handle the challenge of higher turnover and lower competencies among our newest drivers, and to educate our customers on the market realities and work to shelter them from the devastation that would otherwise occur without a prepared trucker in their corner.Tom Voelkel, President/COO, Dupr Logistics
We have been able to find the drivers that we need, although we are going through more applicants to find them. Since most of our business is hazmat, this makes it a little tougher. We have invested time and effort in making Dupr "The Ideal Place to Work." In doing this we have built a quality job and work environment for professional drivers. We have built our business model to have work for our drivers that they like and that maximizes their available hours. With the diverse number of clients that we service, drivers have the opportunity to move to different job opportunities with our company. Some of our drivers have taken advantage of the opportunity to move into supervisory responsibilities.
I think that hiring quality drivers will become even tougher in the months and years to come. CSA 2010 will make our highways safer but will put more pressure on the drivers that can meet the new requirements. Over time, the industry will have to make this job more attractive to draw people in the industry. I believe that this will require higher pay for drivers and will increase costs. Clients will have to work with logistics service providers to determine the total cost of logistics, which would include transportation costs plus the clients' cost of doing business with the provider.