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New study provides driver shortage update

There are a variety of factors for the current driver shortage.
/ Industry News & Trends /

By: Phil Sneed

As fall weather is in full swing, a new report from the American Trucking Associations poses serious questions regarding the number of drivers and the current shortage. The report, released in early October, stated there is currently a shortage of approximately 48,000 drivers. Commonly cited causes were retirements and industry growth.

Furthermore, if current trends continue, the ATA is projecting a shortage of 175,000 in about nine years.

"The ATA is projecting a shortage of 175,000 in about nine years."

"The ability to find enough qualified drivers is one of our industry's biggest challenges," said Bill Graves, current ATA president and CEO, in a statement.

Labor crunch worsened
Many truck drivers tend to be older and as a result, they're starting to retire in greater numbers. According to The Wall Street Journal, the average driver is 49 years old, compared to the average age of 42 years for individuals in other industries. As a result, the industry will have to hire an astounding 890,000 new drivers to not only cover the current shortage, but to also replace those who will inevitably retire in the coming years. Over the course of 10 years, the industry will ideally have 89,000 new hires per year.

Of the total number of new drivers needed, 45 percent of new hires will have to replace retired truckers. Another 33 percent of drivers will be needed for future industry growth. However, the trucking industry is not the only sector that will face similar issues.

Some of the shortage can be attributed to the economic downturn that began in 2007, and while the economy has recovered since, there are still some lingering effects for shippers and carriers. The industry has responded by raising pay for drivers. In its newest report, the ATA said sign-on bonuses of approximately $1,500 were offered to for-hire truckload carriers. Wage increases therefore have two results: Drivers receive higher pay and shipping costs increase as well.

The shortage is somewhat of a recent development. Following the recession, The Wall Street Journal reported there was a surplus of drivers because shipping demand fell, but the situation quickly changed as the U.S. economy gained steam and imports also increased.

Driver quality is another reason why hiring has not kept pace with industry's growth. According to ATA chief economist Bob Costello, applicants typically do not meet the criteria set forth by fleets. Costello added that about 88 percent of carriers said most applicants are not qualified.

"Applicants typically do not meet the criteria set forth by fleets."

Impact of upcoming federal regulations
It has to be noted, however, that the ATA's recent study did not incorporate the effect of federal regulations. In an interview with Fleet Owner, Jonathan Starks, director of transportation analysis at FTR Transportation Intelligence, said by not doing so, the ATA is seemingly ignoring a big factor. Starks went on to say that while it may be difficult to pinpoint the effects of regulations, there is no denying the inevitable side-effects.

For example, the trucking industry is expecting a final rule regarding electronic logging devices. According to the Journal of Commerce, the new regulation may mandate that all interstate drivers must switch to an electronic logging devices and cease use of paper logbooks within two years. If they fail to do so, carriers will be penalized.

Worries come from the cost to install these new units as well potential loss of productivity. During the 2015 FTR Transportation Conference, Fleet Owner reported how Werner Enterprises president Derek Leathers said 60 percent of the trucking sector does not have electronic logs. He further stated that early adopters subsequently suffered a loss in productivity, estimated at between 3 to 5 percent.

Productivity losses could stem from learning how to use the new device or any potential fixes due to malfunction. In the event the device stops working, drivers will also have to know what they should do and come up with a plan to log their driving.

"Make no mistake, the driver shortage is a challenge, but it is not an insurmountable one," said Costello.

Shippers and drivers are likely aware of these challenges. Moving forward, it will be interesting and important to study the impacts of new regulations, as well as new hiring trends. The trucking industry remains the backbone of the U.S. economy, yet there is no denying the current and future driver shortage.