For the first time, driver compensation and detention/delay at customer facilities appeared on the American Transportation Research Institute’s annual Top 10 list of the Top Industry issues.
In a session Oct. 6 during the American Trucking Associations’ Management Conference and Exhibition in San Diego, ATRI, the not-for-profit research institute arm of ATA, unveiled the list, which revolved largely around driver issues. For the third year in a row, the driver shortage is the top-ranked issue for trucking fleets, as they struggle to recruit and retain qualified drivers – but most of the other issues on the list are related in one way or another to drivers as well.
The annual survey, which generated more than 2,000 responses from motor carriers and commercial drivers, results in a detailed report that also includes prioritized strategies for addressing each issue.
1. Driver Shortage
“Surprise, surprise, surprise,” said Rebecca Brewster, ATRI president and COO. “For the third year in a row, the driver shortage comes in at the top.”
According to ATA Chief Economist Bob Costello, the industry was short about 61,000 drivers at the end of 2018, which is an all-time high.
Possible solutions discussed included opening interstate commercial drivers licenses to younger drivers (currently drivers in interstate commerce must be 21, yet younger drivers can legally drive trucks intrastate in most states); and attracting more women into the industry (they make up 47% of the workforce but only 6% of truck drivers).
2. Hours of Service
The hours of service rules held on to the #2 spot in the survey for a second consecutive year, reflecting the industry’s call for additional flexibility in the rules, particularly the sleeper berth provision.
FMCSA recently proposed changes to the hours of service rules that would address many of the flexibility issues the industry has called for.
3. Driver Compensation
Driver compensation ranked third overall and represents two sides to a complex issue; motor carriers who have raised driver pay significantly over the past year in response to the driver shortage, and drivers who are concerned that their pay has not kept pace with inflation.
Last year, Costello said, “we saw pay rates go up significantly, we saw things like guaranteed minimum weekly pay. Now you have softer freight and rate environment. How do you walk those pay increases back? I don’t think you can.”
At the same time, however, although pay rates have gone up, a driver’s actual pay may not have increased as much.
“We’ve seen a 6.5% increase at USA truck year over year in driver wages,” Reed said. “You can’t un-ring that bell. Drivers don’t get paid enough for the work they do. I’ve also learned, as I talk to more and more drivers, many of them are excited to earn more money so they can work less and keep the same standard of living.”
In addition, Costello pointed out, “it’s also because of the changing supply chain. E commerce has had a dramatic impact on average length of haul. It was 503 miles for average truckload last year, down from 800. The pay rates have gone up, but if you’re not driving as much, your take home pay hasn’t gone up as much.”
4. Driver detention
Making its debut at #4 on this year’s list, driver detention and delays at customer facilities reflects growing concern over excessive delays that create cascading impacts for drivers’ hours-of-service compliance, compensation, and ability to find safe, available truck parking.
“The driver issues are pretty bad,” Reed said. “We’ve all heard of situations where a driver is at a dock for six or eight hours, no restrooms, no break facilities, nowhere to park the truck when you run out of hours.”
With capacity looser and rates softer, Reed said, many carriers don’t have the clout they did last year to enforce accessorial charges for detention.
“But we now have some tools available to use, driver surveys of sites where we can collect information about the driver experiences, and we’re starting to get insight into how long the average wait and dwell time is by time of day so we can coordinate our scheduling with those customers. And I use that information in rate negotiations with customers. I will price lanes using that information.”
5. Truck Parking
The lack of available truck parking ranks fifth overall, but ranks third among commercial driver respondents after compensation and HOS rules. It first showed up on the list in 2012 and has been in the top 10 ever since. Trucks lined up along highway entrance ramps are a more common sight all over the country since the ELD mandate took effect.
6. Driver Retention
This year driver retention dropped three places. Costello shared ATA’s driver turnover numbers and pointed out the industry is doing better. “The all-time high was 136% in 2005 for truckload carriers. But even at less than 90% [as it is currently], it costs the industry hundreds of millions of dollars a year.”
Reed said he believes the cost is even more. “I think if carriers would do the math of how many you added, and subtract how many you lost, you’d find out your real cost is north of $100,000 dollars per driver,” not the $5,000 or $6,000 commonly cited.
7. ELD Mandate
This concern was number one in 2016, just before the mandate went into effect, and has been dropping ever since. As fleets that have been operating on grandfathered AOBRD devices do their final transition by the December deadline, there will still be some headaches, but not at the level of the initial ELD mandate implementation two years ago.
The Federal Motor Carrier Safety Administration’s CSA enforcement regime (Compliance, Safety, Accountability) first appeared on the list in 2010, when CSA first went into effect. When the FAST Act in 2015 removed some of the scores from public view and started reforms, its importance in the list dropped.
“Anytime there’s uncertainty, people are worried about it,” Reed said. “Now that we know the crash preventability determination program is permanent, that takes some of that uncertainty away. We’d like to expand some of the appealable collisions, and we’re still trying to understand what’s going to happen with the IRT model and what that will mean to us.”
9. Infrastructure and Congestion
This is an issue that has been in ATRI’s top 10 list since it began 15 years ago. In ATRI’s latest study on the impacts of congestion, Brewster said, it found 1.2 billion hours are wasted each year as a result of congestion. “That’s the equivalent of 425,533 commercial drivers sitting idle for an entire year.”
10. The Economy
Costello explained that there are threats to the economy, including a slowing global economy and a trade war, but “if we can avoid disaster with those, we can move back to trend growth of about 2% a year. I don’t see a recession around the corner.”
For trucking fleets that get most of their business from the spot market, however, it’s been a very difficult year. Volumes are off 40% in the spot market, Costello said, and rates are down 15-20%.
“We saw double the number of fleets go out of business in the first half of year as in all of 2018,” Costello said. “You’ll still see fleets mainly in the spot market, more and more of those go out of business.”
At the same time, however, contract freight is growing for truckload carriers, Costello said. Reed noted that from the shipper perspective, those that are looking for dedicated capacity are not finding enough of it.
Reed speculated that some of the “malaise in the trucking space” was due to the amount of capacity that came online in the past year, “maybe irrationally,” as fleets ordered record numbers of trucks in 2018.
As part of the survey, ATRI lists a few “emerging issues” that didn’t quite make the top 10. One of those is the cost and availability of insurance – already number nine when you just look at the motor carriers’ concerns and not the drivers.
Reed said if the survey had been done just a few months later, insurance probably would have been higher on the list. He says he has been hearing of 40 to 60% increases in insurance. This will be hardest, he said, on small- to mid-size fleets. “People with 20-50 trucks aren’t going to be insurable. The market has almost completely evaporated.”