Confronting the Driver Shortage Crisis

The current labor market, which is consistently and predictably one of the transportation sector’s top pain points, and the resulting driver shortage pose unique challenges within the industry. The imbalance in the supply of and demand for drivers has been a chronic issue but, more recently, has risen closer to the level of crisis.

How severe is the driver shortage? According to the American Trucking Associations (ATA), the industry is short approximately 61,000 drivers. Since freight volumes have been steadily on the rise since the end of the recession of 2008, the experts at the ATA predicted the shortage numbers would surge to roughly 160,000 nationally by 2028. Over the course of 2020 and 2021, the pandemic and the accompanying government mandates helped exasperate the shortage.  As e-commerce and the demand for shipped goods skyrocketed, there was a surge in driver early retirements, and some drivers were incentivized by the government to collect unemployment rather than work.  Moreover, the ATA’s Chief Economist Bob Costello remarked, "Truck driver training schools shut down, or they trained a fraction of what they normally do. Plus, DMV's were issuing fewer drivers licenses because they had limited hours."

In addition to the pandemic-related effects and the driver supply/demand, there are further contributing realities and barriers that contribute to the driver shortfall. There is an aging workforce and, as retirements continue, create looming outlook concerns.  According to the Bureau of Labor Statistics, almost thirty percent (27.4%) of the industry’s workforce is over the age of 55. On the other side of the age spectrum, the federal age requirement that a driver must be 21 years old to haul loads across state lines and must possess a commercial driver’s license (CDL) creates a large recruitment challenge. There is currently bipartisan legislation under consideration in the House and Senate that would encourage younger individuals to join the trucking industry. The DRIVE-Safe Act includes a two-step program for prospective young drivers to complete once they obtain a CDL. As the legislation presently stands, these drivers would be required to log 400 hours of on-duty time and 240 hours of driving time with an experienced driver in the cab after earning a CDL. Once completed, the young driver would be able to participate in interstate commerce.

Attracting and retaining qualified truck drivers is a primary concern for nearly all transportation companies, ranging from the small family-owned companies with annual revenues of $5 million to the mid-size regional companies to the larger national trucking companies. Coordinated attraction and retention efforts and incentives are more necessary than ever. Among others, the following tactics are being used across the industry to retain their drivers: compensation increases, performance recognition, miscellaneous driver appreciation perks, wellness benefits, better health insurance, and enhanced retirement options. Other strategies that are being employed across the industry to recruit new drivers include healthy sign-on bonuses, competitive pay, lease purchase programs, talent referral bonuses, use of mobile-friendly applications, employment screenings, and use of non-traditional recruitment channels including social media, truck driver schools, outside recruiters, and even college recruitment. With their efforts to get younger generations in the driver workforce, companies are seeing that the Millennial workers desire more work-life balance and flexibility than those in the Baby Boomer and X generations. 

It is doubtless that consumers are affected by the driver deficit.  The shortage of drivers contributes to a slowed supply chain, and there are resulting in price increases across the board. However, the trucking companies are experiencing the most severe effects of this shortage. The desperation for qualified drivers is leading to higher wages and recruitment costs for the trucking companies. If the benefits of increased revenue are not passed along to the companies and consumers who pay for shipping, these are undoubtedly worsening a trucking company’s bottom line. 

The duration and trajectory of the driver deficit is uncertain. In a market defined by high demand and rising labor costs, targeted and strategic efforts to recruit and retain solid, reliable drivers will assuredly expend resources of both time and money.  However, at this point, the trucking industry has no other option. 

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