ALK Conference Keynote Addresses Driver Retention
May 20, 2014
Richie Henderson, J.B. Hunt Transport's senior vice president of administration and technology, gives the May 20 keynote.
In his keynote address during the opening day of the ALK Technology Conference in Princeton, N.J., Tuesday, Richie Henderson set the theme for the rest of the day.
“Everything begins and ends with the customer and employee experience,” he told the packed house. “The customer experience is the new differentiator [when it comes to our industry].
And with this customer-centric focus, the pressing problems of the trucking industry have come to the forefront. At the top of the list is the driver shortage, which Henderson, who is senior vice president of administration and technology for J.B. Hunt Transport, says will hit critical levels — a deficit of at least 239,000 — within a decade. What’s primarily fueling the shortage are stagnant driver wages. The new hours of service rules and infrastructure issues aren’t helping matters.
Raising wages will only be a temporary fix, however. “Ultimately how drivers are treated, the equipment they have to use, how much time home they have, and how they’re treated by the customer is more crucial,” Henderson said.
Retaining qualified drivers makes good economic sense. Henderson noted that it costs $5,000 to $10,000 to replace a single driver. “And this is inflationary to the U.S. economy. The cost will be passed on to the consumer,” he said.
Capacity is another issue forcing drivers out of the market. For instance, the DOT's Compliance, Safety, Accountability enforcement regime disqualified about 3% of drivers. When new hours of service rules came online last year, it had a negative impact on between 3% and 5% of drivers. Speed controls are also limiting capacity. With the lack of drivers and other constraints, Henderson said, freight prices will rise between 4% and 6%.
Compounding the capacity issues is what Henderson termed the “Omni Channel.” Essentially, this is a consumer-driven phenomenon where there is a demand for a seamless buying experience in which an order will be fulfilled within about 24 hours. It is here that technology can play a part, with better routing and scheduling.
“We all better get good at data analytics,” Henderson said. In fact, he predicted that successful trucking companies will be those with the best analytics. Piggy-backing on this is “Big Data” (another theme of the first day of the conference).
Finally, the improving economy will put added pressure on recruiting and retaining drivers and strain capacity further.
In closing, Henderson shared J.B. Hunt’s goal — and a recipe that could be used by the rest of the industry — to retain good drivers: “Enriching employee lives and build a sustainable culture based on the service experience.”