The crux of the matter and solutions for the supply chain
If you aren’t involved in the shipping industry, you may be unaware of the national truck driver shortage. However, if you pay for shipping, chances are you’ve noticed an increase in shipping rates over the past few years. The lack of labor in the trucking marketplace is a key reason that shipping costs have risen. Industry experts have attributed a number of causes to the dilemma and have proposed some innovative solutions.
As motor carriers scramble to decrease turnover rates and fill vacant commercial truck driver positions, they’re targeting demographics that the industry hasn’t historically accommodated. At the same time, there are hopes that up-and-coming technology — such as self-driving vehicles and automation — will help fill the labor void.
What’s causing the truck driver shortage?
According to the American Trucking Associations, the trucking industry was short 36,000 truck drivers in 2016. By 2017, that figure had surged to 51,000 truck drivers. Without a doubt, there’s been a shortage of truck drivers in the U.S. for some time. However, today’s shortage is more pronounced and more urgent than ever.
The spike in shipping costs has been one of the most significant effects of the shortage. The average cost to ship a dry good rose by more than 40% in one year, hovering now around $1.85 per mile. Because transportation costs and the economy at large are highly interconnected, a 10% increase in transit fees results in a 1% increase in overall inflation. As a result, many are bracing for the impact of higher shipping costs on the overall economy.
So, what’s causing the U.S. trucker shortage to become so pronounced? As with most things, there isn’t one simple explanation. Instead, many factors are contributing to the problem, including:
- Inability to replace retiring individuals who are leaving the labor market: Truckload carriers are having a hard time replacing retiring drivers with new drivers, young people in particular. In fact, enticing younger demographics — especially millennials — to become truck drivers has proven to be an immense challenge. This, in part, is due to younger people’s perception of truck driving; they see this career as less desirable because there’s no promise of longevity, given the projected impact of technology on this line of work in the near future.
- Climbing demand: A second factor to consider is rising demand. As a result of the e-commerce boom, supply chains need commercial truck drivers now more than ever. This uptick in demand is related to surging shipping rates.
- Slow wage growth: Driver pay has lagged behind that of other professions in recent years. While truck driving has historically been a well-paying job (especially for individuals who weren’t college-educated), the occupation has experienced stagnating pay increases lately.
- Unfavorable cultural attitudes towards truck driving: Hiring managers contend that society fuels a less-than-attractive image of truck driving and the role’s associated lifestyle, encouraging young professionals to seek employment in other industries and making it difficult for carriers to fill empty seats. Whether that’s true or not, working professionals who value family time aren’t attracted to the field. Less time with loved ones, family hardship as a result of long absences, loneliness, constant travel — these issues have always posed problems for truck drivers. Still, spending long periods away from home is one of the job requirements.
How do we solve this shortage of drivers?
Major carriers have begun to implement the following solutions:
- Reaching out to underrepresented demographics: Historically, truck drivers have been predominantly white and male. This is beginning to change, which is beneficial for the industry. In an effort to attract fresh labor, trucking companies have started recruiting women and people of color, two groups that the freight industry has typically sidelined in the past.
- Raising driver pay: Driver wages have traditionally lagged behind those of other industries. To make matters worse, when we adjust trucking incomes for inflation and cost-of-living prices, truck drivers earn less today than they did two or three decades ago. In order to meet demand and onboard new drivers, hiring managers are offering higher wages. To sweeten the deal, motor carriers are adjusting routes to allow truck drivers to spend more time at home. Only time will tell if job candidates deem these benefits enticing enough.
Through a combination of modern recruiting tactics, better compensation and more time at home, transportation employers are hoping to offset huge spikes in e-commerce demand with an ample supply of truck drivers. Whether these efforts will succeed remains to be seen. Many people who work inside and outside of the industry are waiting to see how technology impacts trucking in the next decade. For now, they must create a labor force that’s capable of meeting demand.