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Amid the pandemic, supply chain woes have been front and center. And while port constraints have dominated headlines, one of the biggest problems in the shipping industry has been the shortage of U.S. truck drivers.
Hasted by early COVID-related retirements and the increased demand for shipped goods during the pandemic, trucking has emerged as one of the most significant bottlenecks in the supply chain – boosting inflation and threatening economic growth.
A closer look at the shortage
Industry groups for years have warned of a workforce shortage in trucking, particularly for long-haul truckers who pick up and deliver across state lines. In the year before the COVID-19 pandemic, the industry was short nearly 61,000 drivers, according to the American Trucking Associations (ATA), the nation’s largest group representing the industry. The association estimates a shortage of 160,000 drivers by 2028.
Along with over 100 other supply chain trade groups, the association maintained in an April letter to members of Congress that the pandemic has “exacerbated the truck driver shortage, and the temporary closures of state [motor vehicle departments] and truck driver training schools dried up the already fragile pipeline of new drivers entering the trucking industry.” (The Journalist’s Resource, July 13)
Others argue there isn’t a shortage, and the real problem is driver retention.
Turnover rates are over 90 percent for large long haul carriers and over 72 percent for small carriers — meaning that drivers are regularly leaving companies or leaving the industry altogether, according to a U.S. Department of Transportation press release.
“Our economy is getting back on its feet, but the pandemic has exposed and exacerbated longstanding challenges in our supply chain – including truck driver retention,” said Transportation Secretary Pete Buttigieg.
According to the ATA’s own statistics, the average annual turnover rate for long-haul truckers at big trucking companies has been greater than 90% for decades. That means, for example, if a company has 10 truckers, nine will be gone within a year or, equivalently, three of their driver positions will have to each be refilled three times in a single year because so many new drivers leave within a few months (NPR, May 25).
Why is retention such a problem?
While interstate truck driving is isolating, the hours are long, and the nature of the job can keep drivers away from their families for weeks at a time, much of the high turnover rate is based on economics.
Currently, as the shortage boosts pay, it’s prompting drivers to move from company to company in search of higher compensation. Further, drivers sometimes use their pay raises to cut down on driving and spend more time with their families.
Other reasons for high turnover include uneven pay. Most companies pay drivers per mile and hourly rates are uncommon. As a result, time stuck in traffic, construction zone delays, and bad weather have a direct negative impact on compensation.
Another factor that has reduced the supply of drivers is a new federal clearinghouse that alerts carriers to drivers who have failed drug tests, DUIs or other substance abuse problems on their records. Some 54,000 drivers have been barred from driving since the clearing house went into effect in early 2020 (CNN, May 29).
Legislative and regulatory efforts
Last month, Buttigieg, Labor Secretary Marty Walsh, and Meera Joshi, deputy administrator of the Federal Motor Carrier Safety Administration, held a roundtable meeting with the trucking industry to discuss efforts to improve driver retention and reduce turnover. Among the measures the industry is seeking is lowering the minimum age to 18 from 21 for interstate drivers and adding trucking to the list of industries that can bypass some of the Department of Labor’s immigration certification process in order to recruit foreign drivers.
Source: (Bloomberg, August 2).