For the fourth consecutive year, a shortage of drivers topped the Critical Issues in the Trucking Industry survey conducted by the American Transportation Research Institute (ATRI).
The driver shortage is dismissed by some as a function of low and irregular pay for demanding work that requires days and weeks away from home. Now, the shortage is made worse by older drivers leaving the business because of the pandemic.
Another factor is that 26,000 drivers who failed drug testing mandated by the Federal Motor Carrier Safety Administration Drug and Alcohol Clearinghouse have yet to apply for reinstatement.
Training of new drivers curtailed by the pandemic is another issue. Twenty-five percent of driving schools are shut down. Those that are open accommodate half as many students because of social distancing and other COVID-related precautions.
“We’re off 30-40% despite there being more than 12½ million people on unemployment,” Bob Costello, ATA chief economist, said in an online chat hosted by the American Trucking Associations’ virtual Management Convention and Exhibition on Tuesday. “That’s more than double where we were a year ago. There is no one silver bullet solution to this issue.”
“More than 40,000 drivers have come out of the market in just the last six months,” said Eric Fuller, CEO of U.S. Xpress based in Chattanooga, Tennessee. “What we’re building is a big deficit that I don’t know can be filled in a short period of time.
“We’ve always had tightness and situations where we didn’t have enough drivers at a given time,” he said. “I think we’re likely to see this market stay tighter longer because of this.”
A surge in per-mile freight rates is driven by demand for consumer goods, a shift away from supplying service-oriented businesses like restaurants to keeping grocery store shelves stocked.
Driver pay is rising and likely to go higher, Fuller said.
“I think you’re going to have another layer of 10-12% within the next two quarters,” he said. “You’re going to have a 20% increase within a three-quarters time frame for most of the industry.
Pay increase insufficient to attract new drivers
Driver compensation ranked No. 2 in the ATRI survey of more than 3,100 trucking industry stakeholders including carriers, commercial drivers, suppliers, trainers and law enforcement. It is inseparable from the driver shortage, according to Costello.
“There’s no easy solution,” he said. “I think the driver shortage went away in April and May. Now it’s back. And it is as bad as ever and it’s not going to go away anytime soon.”
Fuller said the current pay increases are not attracting new drivers.
“I don’t think that does anything but reshuffle the deck,” Fuller said. “A compelling driver compensation increase that really brings a new influx of new drivers has to be closer to 50%. And that isn’t in the cards. It’s such a cyclical market that at some point you’re going to give it back.”
Little agreement on issues
Survey responses from commercial drivers and motor carriers found just three issues that made the Top 10 on both lists: Drivers ranked detention/delay at customer facilities as their No. 3 issue. Carriers voted it ninth.
“We need to do a better job of managing our time,” said Danny Smith, a driver for Shelbyville, Tennessee-based Big G Express who participated in the online discussion. “Even the driver needs to take some responsibility for that.”
The other common areas: Hours of service ranked No. 4 for drivers and No. 10 for carriers. Compliance, safety and accountability (CSA) ranked fourth for carriers and seventh for drivers.
Insurance availability and cost made the overall list at No. 5, its first appearance since ATRI began the survey in 2005. Tort reform ranked No. 7, its first inclusion since 2011.
“Earlier this year, ATRI quantified the growth in nuclear verdicts in the trucking industry, but even without that critical research, the fact that tort reform and insurance issues have resurfaced in the survey are a clear sign the industry is being impacted by rising costs related to litigation and insurance,” ATRI President Rebecca Brewster said in a press release.
The ATRI’s 2020 Top Industry Issues were based on responses gathered between Sept. 8 and Oct. 16. Respondents selected their top three choices from a list of 29 critical issues. The Top 10 uses a formula that assigns three points to a first choice, two points to a second choice and one point to a third choice. Point totals determine the top issue. The 2020 list:
- Driver shortage
- Driver compensation
- Truck parking
- Compliance, Safety, Accountability
- Insurance availability/cost
- Driver retention
- Tort reform
- Detention/Delay at customer facilities
- Hours of service