Driver Shortage - Running on Empty?

The shortage of truck drivers in North American has reached dramatic proportions. And as a shipper reading this, you will know that not enough drivers available to move loads means that costs are rising.

In fact, a study released by the American Transportation Research Institute (ATRI) at the end of September 2015, revealed that trucking costs increased two cents per mile from 2013 to 2014.

"Despite falling fuel prices, the rise in average operating costs in 2014 is attributed to…driver wage increases driven by the ongoing driver shortage and the need to retain the industry's most experienced professional drivers", ATRI said in a statement. (1)

In Canada and the US combined, it is estimated that in the years between 2017 and 2020 the gap between supply and demand will reach approximately 350,000 to 420,000 drivers. (2)

The roots of this extreme situation

1. Demographics play a huge role, with the age of the population meaning more truckers are retiring than are joining the workforce. Of the more than 300,000 truck drivers in Canada, the average age in 2006 was 44 (in the general working population that average age was only 40). And, 20 percent of truckers were already over 54. Nine years later and many of these folks are retiring or planning for it.
2. A second factor influencing the problem is the difficulty of recruiting new drivers into the profession. Like it or not, truck driver is a demanding job, with working conditions that are not always attractive. Long and unpredictable hours, being away from home (for long haul drivers), lack of planning and preparation on the part of shippers, poor wages, and isolation all make it hard to find new recruits. As well, competition from other industries lures away many of the younger candidates that trucking needs to sustain itself, and its designation as a low-skill trade makes finding immigrant drivers more challenging (2: p18).

Some pointers to address the problem...

Strategies to alleviate the bottom-line pain that shippers feel due to a lack of truck drivers range from improving the profession's image to attract more drivers, to improving the productivity of those who remain, to changing transportation and network options.

Moving freight off the roads and onto other modes is an obvious option, but it does not always fit with manufacturers' and retailers' distribution models. In a country as physically enormous and sparsely populated as Canada, over-the-road logistics are not easily dispensed with.

Improving the productivity of the trucking mode has been proved to increase its cost-effectiveness, and may make it easier for carriers to pass along savings to the drivers in the forms of higher wages. Fuel-saving measures such as side skirts and trailer tails, speed limiters and ever-improving engine technologies, along with auxiliary power units all play a part in reducing costs.

But it really comes down to the measures that need to be taken to encourage more people to take up truck driving as a career. Responsibility lies in many places; with industry and government alike bearing some of the burden.

As we discussed in our recent blog and whitepaper about Becoming a Shipper of Choice there is much a shipper can do to ensure its operations are as carrier- and driver-friendly as possible.

What others are doing?

It's simple calculation: Make it easier for the trucking company to attract and retain talent, and your rates will be better. The OTA's shipper evaluation program, Operation Upgrade, allows drivers to rate shippers on their treatment of truckers when they arrive to pick up and drop loads. (3)

On the carrier side, Trucking HR Canada has implemented a Top Fleet Employers program that shows carriers the seven best practices of top fleet employers. (4) In its Top Fleet Employers 2015 report, the low staff turnover rates of the best performers are linked to good working conditions, professional development opportunities and more, providing a blueprint for other carriers to follow suit.

Programs like OTA's shipper evaluation and Trucking HR Canada's Top Fleet are attempting to help ease the gap between supply and demand for the sector. Governments also need to be encouraged to do their part by ensuring licensing and working conditions regulations are fair and enhance safety, as outlined in our whitepaper: 'Understanding Chain of Responsibility', without adding undue costs.

The driver shortage is a fact for shippers and carriers. We cannot change demographics, but we can change working conditions in our industry so that trucking become a career of choice. It's up to us to make that happen.

References

1: American Transportation Research Institute press release, September 29, 2015. "ATRI Research Finds Industry's Operational Costs On The Rise Again", www.atri-online.org.

2: Understanding the Truck Driver Supply and Demand Gap and Its Implications for the Canadian Economy, The Conference Board of Canada; and, http://www.drivershortage.ca/?p=958#.Vd5Q7s56Iq4