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The National Truck Driver Shortage is Threatening the Freight Industry

Posted by Joseph Tanador | July 18, 2016

The trucking industry, which moves 70% of US freight, has been facing a driver shortage for the past 15 years. The industry is short 48,000 drivers, and its severe turnover rate—87% in 2015—isn’t helping. Shipping routes and truck sales have been severely impacted. Other countries including Australia, Canada, and the UK are facing the same issue. Will the industry turn itself around?

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The Primary Factors

According to the ATAs Driver Shortage report, some of the primary reasons for the shortage include demographics, lifestyle, more alternative jobs available, and regulations. Around a third of new drivers quit in 90 days; half leave within the first six months. In addition, drivers are aging: the median age of truck drivers in the US is 49. Many drivers leave because of the length of their assignments. Normally, these assignments place them on the road for a week or two, affecting their lifestyles. A retiree said “The lifestyle was too much for me. The hours were all varied. There was no set schedule, no way to put your body in some sort of rhythm.”  Drivers also leave for job alternatives with less responsibility and regulations to follow. Revised and tightened Hours of Service regulations have also prompted the drivers to leave. Associate professor of Supply Chain Management at the Harbert College of Business Stephen Swartz refers the new regulations as “confusing” and “frustrating” for drivers. The hour-of-service regulation has affected the industry’s productivity, hence the need for more trucks and drivers to move the same amount of freight. Furthermore, drivers are also annoyed with GPS tracking devices and electronic log books regulations.

Possible Solutions

Many suggest that increasing pay would help solve the problem. The nationwide median hourly wage for truck drivers in the US is $19.36 (US $40K a year). Carriers have raised wages by up to a third, but backtracked after some time as it proved expensive. Swartz cited larger trailers, commercial carriage, “Uber for trucking”, or futuristic autonomous vehicles as some of the measures that could help solve this issue. The industry should reduce length-of-haul and increase the at-home time as many prospective drivers are skeptical to accept a job that would require them to be on the road for a week or two.

Autonomous trucks could also solve this issue, although that futuristic solution is years away—there are numerous limiting factors that prevent it from being used by carriers. Hiring military veterans and women could also have a positive impact. Women drivers, however, only comprise 6% of the 47% female workers in the US. Millennials could also help solve the shortage. They are also the most diverse generation with 44.2% part of a minority race or ethnic group and 38% bilingual, said Jane Jazrawy, CEO of CarriersEdge.

What Lies Ahead

Experts say that the situation is likely to get worse in coming years. If the shortage persists, it is forecast to increase rapidly to almost 175,000 by 2024. Prices of goods would definitely increase so that companies will be able to reduce the supply and demand gap. To relieve this shortage, regulators and carriers need to revisit their policies. They need to develop a better, effective retention program that would keep truck drivers stay. Once companies become more appealing employers, many would most likely consider truck driver as a career. The main question, though, is will the drivers still stay once this issue is resolved?  



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