What Price Truck Driver Shortages?

What Price Truck Driver Shortages?

A shortage of truck drivers has bedeviled the logistics industry for so long, that it’s difficult to imagine a time when filling driver vacancies was not a problem. What is also difficult to fathom is why simply paying these workers more is not a solution.

Based on the economics of supply and demand – when the former falls below the latter, prices tend to rise – if drivers are a scarce commodity, the market should adjust by increasing the price companies pay for this resource, thereby attracting more workers until the imbalance is corrected. Yet the American Trucking Associations estimate that the industry is short of 35,000 to 40,000 drivers.

Moreover, even though the economy appears to be ticking along, there are people who still need gainful employment. According to the US Department of Labor’s Employment Situation analysis for July 2015, the number of long-term unemployed people (those jobless for 27 weeks or more) stands at about 2.2 million , which represents 26.9% of the total unemployed. The jobs picture has generally improved as the economy has picked up steam, but the threat of job losses – especially among semi-skilled workers – owing to automation is still very real. Furthermore, the labor market participation rate has declined from 66.4% in January 2007 to 62.6% last month. Almost 4% of US workers have dropped from the labor force in that time.

Why then, can’t the freight industry attract more drivers by offering higher financial incentives?

The first reason, of course, is that shippers, while complaining about driver shortages, are still not willing to pay more for high quality truck transportation. In other words, the situation is not “bad enough” despite the publicity. On a day-to-day basis the issue is not sufficiently visible to prompt drastic action. Driver shortages crimp the supply of truck capacity, forcing supply chain managers to mitigate the problem by, for example, increasing safety stock levels, using more intermodal solutions, or resorting to the spot market for truck capacity, where the quality of the drivers may be somewhat lower. Measures like these add cost to supply chains – but perhaps not enough cost to prompt an increase in compensation that attracts more drivers in numbers.

There are other possible reasons. Truck drivers spend long periods away from their families and friends. Driving a truck has become more stressful owing to tighter delivery deadlines, deteriorating road conditions and increased traffic congestion. Owner drivers also face the vagaries of fluctuations in both demand and prices.

Also, this is not a job that commands a high level of respect, even though it is critical to almost every industry and requires a specific set of skills. Drivers are often kept waiting for loads and amenities for these workers can be quite basic. The Wall Street Journal reported recently that the manufacturer Kimberly-Clark is addressing this latter issue by upgrading the restrooms and rest areas in more than 20 distribution centers. The WSJ reports that the company wants to “ensure it gets its pick of drivers” by making its facilities attractive to carriers.[i]

Demographic trends could aggravate the driver shortage problem. There are not enough young recruits to replace retiring baby boomer drivers at a time when the US population is ageing.

Looking ahead, another solution could save the day: driverless trucks. As I’ve argued in a previous post, it will be a long time before fully automated trucks are a common sight on our highways. Automated vehicles with human drivers are a more likely option in the medium to long term. Shifting much of the driver’s role to automated systems might alleviate much of the stress that drivers now endure.

However, other problems will emerge, such as underutilized drivers becoming inattentive or even sleeping on the job. And whether highly automated vehicles will make truck driving a more respected occupation is open to question.

I’m reminded of the joke about the highly automated factory of the future that only has two employees: a man and a dog. The man is there to feed the dog, and the dog is there to stop the man from touching the equipment!

[i] Kimberly-Clark Woos Truckers with Promise of Clean Bathrooms, by Loretta Chao, Wall Street Journal, July 20, 2015.

Raymond Belair ?

Truck Driver at Super Save Group ★ Professionalism ★ Excellence ★ Due Diligence

9 年

I did long haul for 1 year. I will never do that again do to lifestyle issues. I hate being away from home. I drive a commercial vehicle now, but stay close to home and sleep in my own bed every night.

回复
Michelle Springhorn Kingsbury

Transportation Supply Chain Logistics Provider of Innovative Shipping Solutions

9 年

If you maximize the volume in the trucks ( rail too ) you will need fewer trucks to deliver the loads and help offset the shortage... long wait for automated trucks but LayerSavers are here now...check it out!

回复
Matt Bosworth

Sr Account Manager - Southeast SLED

9 年

Sounds like an opportunity for an entrepreneur to start a trucking company or a driver training company. Thanks for the great lead!

回复
Anitra Noland, PMP

SAP NS2 Associate Project Manager

9 年

Transferring loads to trains and reducing the need for drivers would be an ideal solution, but great sections of the railroad infrastructure have been allowed to deteriorate due to underutilization. I have lived in many areas where old railroad lines have been converted into trails for multi-purpose public paths.

回复
Anastassios N. Perakis

Founder (2018), President and Managing Director at Prometheus Transport Research, LLC

9 年

The solution is a no-brainer: get the trucks off the highways, use trains and ships to the max.

回复

要查看或添加评论,请登录

Yossi Sheffi的更多文章

  • Geopolitical Upheavals Are Reshaping Emergency Response

    Geopolitical Upheavals Are Reshaping Emergency Response

    Companies have created emergency operations centers (EOCs) to help them manage and bounce back from large-scale…

    13 条评论
  • What Price Big City Traffic Congestion?

    What Price Big City Traffic Congestion?

    New York City introduced its congestion pricing plan on January 5, 2025, prompting criticism that it increases already…

    8 条评论
  • Looking back on my 2024 statistics

    Looking back on my 2024 statistics

    As I look back on 2024, I am honored to have been named the #1 Supply Chain Influencer of the Year by Supply Chain…

    17 条评论
  • Tech Trends That Could Shape 2025

    Tech Trends That Could Shape 2025

    2024 was a year of turbulent change, setting the scene for another year of extreme uncertainty in 2025. We witnessed so…

    17 条评论
  • Fortifying Supply Chains Against Security Threats

    Fortifying Supply Chains Against Security Threats

    Governments and companies are paying more attention to supply chains as a potential source of national security risk…

    6 条评论
  • Tariffs Pose Taxing Problems

    Tariffs Pose Taxing Problems

    Both the former Trump and the current Biden administrations in the US have used tariffs to punish countries like China…

    26 条评论
  • Markets Pay Dearly For Government Price Controls

    Markets Pay Dearly For Government Price Controls

    The subject of price controls is attracting attention in the wake of recent hikes in the cost of food. US Vice…

    20 条评论
  • The Multi-Faceted Threat of Single-Point Failures

    The Multi-Faceted Threat of Single-Point Failures

    Every so often, a headline-grabbing incident delivers a sharp reminder of an overlooked vulnerability that needs…

    10 条评论
  • The Case for an IPCC Clone to Help Govern AI

    The Case for an IPCC Clone to Help Govern AI

    Does the world need a supranational organization to track developments in artificial intelligence (AI) and advise…

    9 条评论
  • A Lack of Political Will Blocks the Way to Global Sustainability

    A Lack of Political Will Blocks the Way to Global Sustainability

    As the Biden administration shows with its action to hike tariffs on electric vehicles (EVs) imported from China…

    33 条评论

社区洞察

其他会员也浏览了