Posted on 05-04-2017 by Lucia Garza
Virtually every expert agrees that North America is in the throes of a truck driver shortage. And it’s about to get worse: according to a 2015 report from the American Trucking Association, some 890,000 new drivers will be needed by 2026 – that’s a pace of 89,000 additional drivers added to the workforce per year.
How Bad Is the Shortage, and Where?
One-third of this deficit is attributable to industry growth: the ATA predicts a 28.6% freight tonnage increase from 2016 to 2026. But perhaps the biggest contributing factor is actually driver turnover. For a variety of reasons, driver turnover in the full truckload (FTL) segment – what laypeople call “long-haul trucking” – is shockingly high. Forbes contributor Kevin O’Marah claims that FTL driver turnover exceeds 90%, “which means most drivers quit in their first year.”
Most drivers quit in their first year
Per O’Marah, the problem is less acute in the less than truckload (LTL) segment. LTL jobs tend to be more driver-friendly: They keep drivers close to home, involve somewhat fewer regulations, have better hours, and pay better, too. But they’re not immune to the disruptive change – driven by technology, new regulations, and changing consumer tastes – set to rock the trucking industry in the near future.
So, how worried should you be about the truck driver shortage? The short answer is, it depends: here’s a quick overview of what to expect in the coming years.
Regulation May Drive Smaller Operators Out of Business
Hopes that a last-ditch legal challenge would neutralize the FMCSA’s new electronic logging device (ELD) mandate were dashed late last year. By the end of the year, most FTL trucks will be required to carry ELDs, which track a slew of driver metrics such as driving hours, resting hours, and speed. The ELD mandate is a big win for road safety advocates, but rank-and-file truckers – especially independent operators – are staunchly opposed to the measures. It’s too early to judge the potential impact, but industry observers predict that the mandate will drive some independent operators to switch fields or retire early.
Remaining Drivers May Have More Leverage
As regulation-weary drivers exit the industry, those who remain may have greater leverage to demand:
- higher pay
- longer deadlines; and
- other driver-friendly concessions
The net result of these demands may be higher shipping costs for shippers and 3PLs, crimping margins and raising pressure to pass the burden on to end users. Some trucking companies are preemptively betting on higher pay to insulate them from the driver shortage: Bill Thomas, an employee benefits expert, writes about a California-based firm that pays drivers $0.61 per mile – well above the industry standard.
Technology Could Save the Day
Truly autonomous trucks are still years off, but many industry observers are betting that they’ll forestall the worst case scenario. In a much-heralded unveiling, Uber subsidiary Otto road-tested a self-driving truck last fall on a Colorado interstate highway. Within a few years, we could see semi-autonomous vehicles handling point-to-point deliveries.
In the meantime, “big data” could help trucking companies do more with less. ClearPeak’s Margaret Tedlie advocates a “data-first approach to transportation management,” for instance, and she’s not the only one singing data-driven shipping’s praises.
The bottom line: it would be foolish not to be worried about the truck driver shortage. But it’s not yet clear that the sky is falling.