For those who think the shortage of truck drivers is overstated, the American Trucking Associations (ATA) has a new study, based on statistical analysis, that indicates the U.S. is currently short of 20,000 drivers. If current trends continue, the same report predicts that the shortage of long-haul, heavy-duty truck drivers in the U.S. could reach as high as 111,000 by the year 2014.
"The driver market is the tightest it has been in 20 years," says Bill Graves, president and CEO of the ATA. "It's a major limitation to the amount of freight that motor carriers can haul. It's critical that we find ways to tap a new labor pool, increase wages and recruit new people into the industry that keeps our national economy moving."
Of the 3.4 million truck drivers on the road, 1.3 million are long-haul truckers, the driver segment said to be the most severely impacted by the shortage. Although the ATA says the current driver shortage is 20,000 drivers, it seems even larger to the industry because of a high degree of driver "churning," or moving from carrier to carrier. Large truckload carriers reported an average annual turnover of 121% last year.
If current demographic trends continue, the supply of new long-haul heavy truck drivers will grow at an annual rate of just 1.6% in the next decade. But Global Insight, the economic consulting firm that conducted the study for ATA, predicts over the next 10 years, economic growth will generate a need for a 2.2% average annual increase in long-haul heavy truck drivers, or 320,000 jobs overall.
Another 219,000 must be found to replace drivers 55 and older who will retire in the next decade, putting total expansion and replacement hiring needs at 539,000 or an average of 54,000 new drivers per year for the next decade.
Scores of drivers exited the long-haul trucking industry after average weekly earnings fell 9% below average construction earnings in the 2000 recession. Driver wages have since failed to regain pre-2000 levels when they averaged 6% to 7% higher than construction wages. Long-haul drivers also cited extended periods away from home and unpredictable schedules as reasons for transitioning to other occupations.
At the same time, the industry is challenged with finding qualified drivers. Many trucking companies reject a high percentage of driver applicants because they lack qualifications. Those challenges escalated in recent years as the industry tightened its security and safety measures.
The driver shortage comes as the trucking industry is hauling more freight than ever. Total annual tonnage hauled by truck is expected to increase to 13 billion tons by 2016 from 9.8 billion tons in 2004.
"It's a favorable supply-demand market for us," Graves says. "But the ability to add truck capacity is based on the market's ability to find drivers. A tight driver market will keep capacity tight."
Finding drivers will grow more difficult in coming years, the ATA predicts, as adverse demographic trends limit the size of the pool of workers that traditionally fill truck driving jobs. For example, one-fifth of all heavy-duty truck drivers are aged 55 or older. Replacements must be found for nearly all of these because only a small fraction of heavy-duty truck drivers work past age 65. The ability to replace these drivers will be further constrained by insufficient growth of new entrants into the labor force, which is expected to decelerate after 2007 from a 1.4% annual pace to only 0.5% growth in 2014. More importantly, the number of men aged 35 to 54, which make up the primary driver demographic, will be flat or declining over the next 10 years.
To increase the nation's driver pool, the industry increasingly will need to draw upon a larger percentage of women and minorities. Women currently represent 5% of truck drivers. African Americans represent 11.7% of long-haul drivers and Hispanics total 9.7% of the long-haul driving sector.
If the trucking industry is to attract a higher share of drivers to match its growth projections for the next 10 years, it will be necessary for earnings to, at a minimum, return to the wage position that prevailed in the 1990s. At present, weekly earnings in long-distance trucking are 1.5% below the average in construction. The industry also will have to address the quality of life issues, including driver home time and schedule flexibility.