Is the Driver Shortage Real?
Is the Driver Shortage Real?
According to the U.S. Department of Labor, the driver shortage the trucking industry is facing could all be a myth. Yes, you just read that right. That’s an ‘about face’ from many industry reports saying that the industry is facing a serious driver shortage problem. So, is what we’re reading about on the driver shortage being overblown?
Well, the U.S. Department of Labor sure thinks so. In a recent study by the Bureau of Labor Statistics, the report claims that the long haul truckload sector has been experiencing a high turnover rate, but that doesn’t mean there is a shortage of drivers. The BLS report claims that the number of drivers available is keeping up with the growing demand of drivers needed.
BLS is really pointing the finger at fleets for a ‘self-inflicted’ high driver turnover and ‘shortage.’ And, that causes ‘churn.’ That’s another word for drivers constantly seeking a new driving job with the thinking that better pay and better conditions are around the corner. And, they might not be wrong. In the report, BLS found that drivers who made higher earnings and worked consistent hours were more likely to stay with that company. And, that makes sense.
The BLS report caught the eye of Land Line magazine and it was like stirring a hornet’s nest. For years, OOIDA (Owner Operator Independent Drivers Association) has said there is not a driver shortage. OOIDA says there is a shortage of well-paying jobs and fair compensation. In Mark Schremmer’s May Land Line column, he said, “if you really want to retain quality drivers and end the so-called driver shortage, wouldn’t you start by compensating those drivers fairly? And paying drivers only when the wheels are turning is anything but fair.”
Mark Murrell, co-founder of CarriersEdge, which provides online driver courses, has a spin on the subject too. Mark’s company also has been running the Best Fleets to Drive For program for the past 11 years, so he’s in the know – he talks with hundreds of fleets each year.
In his recent blog post, he said: “Looking at the situation from outside the industry, it doesn’t look like there’s a shortage. A basic truth of supply-and-demand is that when there’s a shortage, prices go up and some people have to go without. That’s not happening here – the freight is still being delivered and shelves aren’t sitting empty. If a shipper wants to get freight delivered, they can. That’s not to say that there are never disruptions, just that those tend to be outliers right now. The disruptions aren’t significant enough that they’re being felt in the wider economy. It’s entirely possible that those disruptions will reach the point where they are having a larger impact, but at the moment they’re not.”
“So,” he continues, “if trucking isn’t really facing a driver shortage, then what’s going on? Why is it so hard to find good drivers? This is where we get closer to the real problem. If you look at the fleets that are struggling to hire 50, 100, 200, or more drivers per year, you see that they don’t have those hiring targets because they’re growing their fleet at the same pace. They may be growing the fleet a bit, but most of the openings are for replacement workers.
“Trucking doesn’t have a labor problem, it has a retention problem,” Mark said.
So, how do you solve that retention problem that can hover around 100 percent for truckload carriers? It may be a combination of increasing pay, and as OOIDA prescribes, setting up new pay practices. And it will take a driver-centric culture for those fleets hiring company drivers.
The good news is the pay front is on the forefront.
According to the American Trucking Association (ATA), the average salary for a truck driver is $55,000 a year. That actually may be conservative. If you look ‘real time’ at what Zip Recruiter is finding, it’s higher. According to Zip Recruiter, on May 7, 2019, the average annual pay for a Long Haul Truck Driver in the United States was $69,134 a year. While Zip Recruiter is seeing annual salaries as high as $105,000 and as low as $44,500, the majority of Long Haul Truck Driver salaries currently range between $57,000 (25th percentile) to $79,000 (75th percentile) across the United States.
The industry is starting to recognize that becoming more driver-focused is really the only way to recruit and retain drivers. Some companies are taking an aggressive approach to resolve the issue. In a previous blog, we mentioned how now is a good time to become a driver. And it is!
There are plenty of companies out there that are now paying higher base-salaries. Some in the industry believe that $75,000 is the figure needed to attract new drivers. Some companies are even going beyond that – if you recall, Walmart recently came out and went above-and-beyond by offering drivers $100,000 and plenty of days off! Offering a wage that is $45,000 over the industry average though is hard to beat.
Smokey Point Distributing is another good example. This flatbed carrier began offering opt-in guaranteed pay, resulting in a turnover rate of 6 percent in 2018. Wow. SPD was recently awarded with an HDT Innovator award at a banquet held in Arizona. Take a read on their story (and other innovators).
Offering experienced, good drivers $75,000 to $100,000 might seem worth it but what about entry-level drivers? New drivers present a higher risk to a company. It takes numerous hours on the road to become a “road master.”
But, bringing in new drivers to the industry is key for keeping a good driver pool. Figuring out proper wages that will attract and retain these drivers for the long-term may be the industry’s greatest challenge.
So what do you think? Is there a driver shortage? Are drivers out there, and willing to go to work, as the pay catches up with the demands of being on the road?
If you’re looking for an easy way to retain drivers, consider Drivewyze weigh station bypass – in our recent survey, we found that drivers are 3X more likely to stay with a company that provides a bypass service! Take a look at the survey results here.