The driver shortage is something that has been discussed in this industry for as long as I can remember. When I joined the industry as a driver 26 years ago, this discussion was top of mind then. It was discussed in trucking industry publications, on Radio shows, at truck stops, by drivers on the CB, in short, in pretty much every circle of the Industry you could think of. Current statistics indicate that the shortage issue is not going away, but that it is in fact worsening, and will continue to get worse into the future. A recent report by the Conference Board of Canada indicates that the shortage of Class 1 drivers in Canada will reach 33,000 by 2020. The average age of the Canadian driver was 47 years old in 2014, up from 44 years old in 2006. In the USA the stats indicate the problem is even worse. The ATA report in 2015 indicated a shortage at that time of 38,000 drivers South of the Border, with an expected shortage of 175,000 drivers by 2024. The average age of the Commercial driver in the States was 49 in 2014.
If all statistics indicate we have a driver shortage, going back to the title of my article, you may wonder, how can I ask “real or perceived”? Well, lets look at things from a general point of view.
Whenever any industry has a shortage of qualified Labour to do the work that is required, wages generally would skyrocket as the fight for the limited talent pool would be strong amongst competitors. While wages for drivers are good, and progressive carriers have increased pay over recent years, most studies indicate that drivers are making comparable wages to what they made in the 80’s, when you take inflation into account. The reason cited for the lack of a steady increase in pay is generally blamed on the increased costs placed on the industry due to, among other things, government regulations. (increases in equipment costs have been in the 10’s of thousands due to emissions regulations alone in recent years). This, coupled with rates for hauling freight not increasing enough to cover these extra costs, have been cited as reasons for wages being depressed. If we truly had a shortage of equipment and manpower to move the freight that was available, would rates to move that freight not skyrocket? Not to over simplify, but if we have 10 loads available, and 15 trucks available to move it, shippers will price shop, and if they only care about price and not service, they will go with the lowest bidder, which keeps rates down….if we have 10 loads available and only 5 trucks available to move it, shippers will not be able to price shop, as demand has now outpaced supply, which means rates would increase as carriers will be able to name their prices, as they can customer shop. Since a lot in the industry will tell you this does not happen today, and that rates are still far to low, the simple logic would tell me that we do not have a shortage of drivers, rather we have an excess of trucks out there that are bidding on the same freight, which is keeping prices to low.
The turnover rate is also a statistic that is often pointed at that indicates a shortage of drivers…the turnover rate in the Long Haul For Hire Industry has hovered around the 100 percent mark for as far back as I can remember. One of the reasons is
thought that a driver has his or her pick of jobs, as they are in demand, if the driver is unhappy, they can simply shop for another job and move. While it is true, a highly skilled and qualified driver is and always will be in demand, and will have their pick of jobs, these types of drivers are generally attracted to the carriers who are also progressive, and are considered the cream of the crop. Quality drivers are attracted to quality fleets, and the turnover rate at these companies are generally lower. The Private Fleet segment of the Industry has always been sheltered from the perceived driver shortage and turnover issue, as just one example of this. Private Fleets have, for the most part, always had a “waiting list” of qualified candidates to fill vacancies. The turnover rate in Private Fleets is generally well under 10%, which means they do not have to recruit to replace the constant churn of drivers. Why does this portion of the industry see a much lower turnover rate and have little problems filling their seats? Some of the main reasons are easier to understand pay rates, more home time, better benefits, company pension plans, predictive routes, access to Employee Wellness programs, among others. In Private Fleets, drivers are generally treated as a valued part of the team as well, and are paid higher as they are thought of as more than a driver, they are a part of the brand and the sales team. Since the drivers are valued more and paid accordingly, there has never been a shortage in this sector. I do not want to paint the entire For Hire Segment with the same brush, so I want to be clear there are also many progressive for hire fleets out there who provide this type of environment as well, and therefore do not suffer the same shortage and turnover issues as the For Hire industry as a whole does. These types of fleets can generally always fill their seats.
So back to my title of this article….Driver shortage, real or perceived….in my personal view, we have a shortage of qualified drivers to fill the seats of all the trucks that are part of this industry, however I believe we have an excess of trucks out there to move the freight we have, rather than a shortage of drivers. Do I believe this will continue to be the case? Absolutely not, the aging of the workforce is going to lead to a real shortage in the years to come. The amount of drivers who will be retiring over the next 5 to 10 years is not going to be replaced by the younger generation. The driver shortage is going to be real going forward for the entire industry, and one that we must address, and soon. We need to figure out how to engage the next generation of driver and introduce them to this industry and get them excited. If we do not do this, the driver shortage, that I don’t believe currently exists, will rear its ugly head in the future, and that future is not far away……
About the Author
“Mike has 25 years’ of wide ranging experience in the trucking industry, performing such duties as a livestock and grain hauler for 3 years, followed by 5 years of long haul across North America hauling refrigerated and general freight. Mike was also a full time certified driver trainer for 2 years, and then transitioned into Safety and Compliance for 2 years, and then spent over 12 years as a Fleet manager for a Private Fleet. Mike is now the President of the Private Motor Truck Council of Canada, Canada’s only National Association that represents the views and interest of today’s Private Fleets.” Mike can be reached at firstname.lastname@example.org