In the fourth quarter of 2020, the for-hire trucking industry added nearly 29,000 payroll jobs – the most in any three-month period in 25 years. Since year-end, however, trucking has added a net of only 3,800 jobs through the end of March, which is not very strong considering robust freight indicators.
This sudden deceleration of the hiring spree seems odd, given that most indicators of freight demand – such as spot market volume and rates, consumer spending, and industrial production – suggested continued upward pressure on hiring.
A weak patch in the middle of an employment surge is uncommon, but we might be seeing the first instance of what could become an annual phenomenon. Data from the Federal Motor Carrier Safety Administration’s Drug and Alcohol Clearinghouse suggests that December and early January saw a disproportionately large loss of drivers due to positive drug tests.
The clearinghouse, which went into effect in early 2020, lacks a mechanism to alert a current employer if a driver working for that carrier tests positive while applying for a job at another carrier. To counter that blind spot, the FMCSA requires carriers to conduct a "partial" query on all drivers it uses at least once a year to see if any have tested positive in pre-employment tests.
The deadline for the first annual query was January 5, 2021. Nearly half of those queries occurred in December and the first five days of January, so the loss of drivers due to pre-employment testing almost certainly was higher during this period than during the rest of 2020. This loss would have been a drain on payroll employment, which could help explain the weak net increase in January and the loss in February.
How many additional drivers did trucking lose during December and early January? We do not have enough data to know for sure, but we can make an educated guess.
We start with the number of pre-employment positive results during 2020 and make conservative assumptions regarding the number of drivers already employed when testing positive and the number of those drivers who might have been removed anyway due to random testing. We further assume that half of the remaining drivers were removed during December and the first five days of January 2021, given that half the queries were conducted during that period.
Given these assumptions, we estimate that at least 3,500 drivers were removed during this period in addition to those who were disqualified through the normal clearinghouse process. That might not sound like a large number, but it is equivalent to the 13th largest truckload carrier shutting down over about a month.
This probably is a conservative estimate. Due to the pandemic, FMCSA granted considerable flexibility in random testing, so random testing probably removed fewer drivers than normal. We also assumed that only half of drivers testing positive in pre-employment tests were already driving for another carrier. That percentage likely is higher, but we do not know.
Although carriers might have regretted putting off annual queries, we generally expect this pattern to hold each year. Due to high turnover, carriers likely will find it easier to conduct all their annual queries at one time rather than try to space them out. However, if the clearinghouse does its job in exiling drug-using drivers, we should see fewer drivers added to the ranks of the disqualified each year.
EDITOR'S NOTE: Article corrected 4/12/2021 to reflect revised federal job numbers.