A cultural change must take place in the intermodal supply chain for it to attract and retain the drayage drivers it needs. That unvarnished message was delivered by speaker after speaker at the 2015 Intermodal Expo, held in Fort Lauderdale, Fla., sponsored by the Intermodal Association of North America (IANA).
Given the industry’s history of taking drayage for granted, a surprising number of conference sessions focused specifically on the driver issue, and even when not the main topic in other sessions, speakers commented on it. This marks something of a sea change for the intermodal industry.
The reason is that intermodal growth is being held back by a host of problems that damage its productivity: port congestion and labor strife, the container chassis mess, and rail service quality that still has not returned to its 2013 levels. But while these challenges are being addressed largely by the individual segments of the intermodal chain, the driver crisis is the responsibility of everyone, including shippers and receivers.
“The IANA board of directors has identified the driver shortage and driver productivity as the No. 1 priority for the industry,” IANA president Joni Casey told me during the Expo. The association has created a multimodal task force to confront the issue directly and IANA is actively drawing input from the industry on what it can do. This included several roundtable discussions at the Expo organized so that the very people who struggle with the question every day could recommend specific action steps for IANA to take.
At the same time companies in the intermodal industry and other logistics providers are facing a generational talent gap throughout its ranks, scrambling to find ways to fill positions in job categories ranging from equipment technicians to IT specialists.
When it comes to the long-haul driver shortage, the impact of the driver shortage has abated somewhat because freight market demand has softened. Consultants and industry economic analysts who spoke at the Expo said the situation will grow worse because of increasing government safety and employment regulations.
If you like to pooh-pooh the impact of government regulations, consider that after Congress postponed the Hours-of-Service restart provision, trucking productivity improvements were seen ranging from 2% to as much as 4.5%, depending on how they are measured.
An October report from the American Trucking Associations (ATA) predicted that by the end of 2015, the driver shortage will reach nearly 48,000. If current trends hold, the shortage may balloon to almost 175,000 by 2024.
The ATA also pointed out that fleets consistently report receiving applications for open driver positions, but the majority of those candidates don’t meet the criteria to be hired, with 88% of carriers reporting that most applicants are not qualified.
But don’t expect domestic intermodal transportation to offer a solution to the shortage of long-haul drivers by taking freight off the highway and putting it on trains. In spite of all the growth intermodal has enjoyed in recent years, it still only accounts for about 2% of the shipments in the over-the-road freight market.
“Our First Customers”
Speaker after speaker at the Intermodal Expo said the biggest cultural change needed is a complete reversal of the lack of respect for drivers shown at intermodal terminals and customer facilities, which sometimes includes not allowing them to use bathroom facilities or drinking fountains at receiving facilities. However, although some companies now provide drivers with clean bathrooms, ice machines and cold water, the overriding issue for the drivers is lack of respect for their time.
Most drayage drivers are owner-operators who are paid for each container they pick up and deliver. Gate delays that create long lines of trucks waiting to enter a yard aren’t just a source of annoyance, they significantly reduce drivers’ income and drive them from the industry.
Listen to Darren Edwards, a 13-year veteran driver with Schneider National, who was the only Expo session speaker who is a professional driver. On a regular basis he faces bad chassis requiring repairs that routinely take two hours, failure of yard personnel to prepare paperwork in advance of picking up hazmat loads, and Edwards’ biggest bête noire: gates that are shut down because someone forgot to put paper in their computer printers. “Fixing that one is easy,” he said. “Put some paper in the damn things.”
Edwards also cited delays caused when he arrives to pick up a container only to find it’s not where it’s supposed to be, requiring that he spend extra time searching the yard. (However, a yard operator later told me that sometimes this is caused by drivers who, because they are eager to pick up a container for the return trip, simply drop the one they’re delivering anywhere in the yard.)
Some of these problems could be solved relatively easily if someone cared enough. “There is a lack of true respect in the intermodal industry for drayage drivers,” said ARL Transport president Ron Flaherty. His company now defines its drivers as its first customers. And that’s not just a slogan, he said. “We are picking and choosing our other customers based not on how much we make from them, but on the impact they have on our first customers.”
Session moderator Tom Malloy, director of sales and membership for the Transportation Intermediaries Association (TIA), co-sponsor of the Expo’s educational program, roughly calculated that improving driver productivity by just one turn a week could raise drivers’ annual income by $15,000.
The challenge to driver retention by gate delays doesn’t just impact owner-operators who are paid by the load. Dave Manning, president of TCW Inc., observed that even his employee drivers feel frustrated by the delays even though they are paid by the hour instead of the load. “The biggest turnover we have is among drivers in first two years because they previously worked in other markets where they didn’t experience these delays.”
Some solutions—like smartphone apps for drivers and automation—may help in the future, but it is high time for everyone in the intermodal industry to show more respect for drivers’ time, Expo speakers agreed. “It’s actually an issue of enlightened self-interest,” declared James Newsome III, president of the South Carolina Port Authority. “We should not be in a position where we can’t offer a quality product because we can’t get them in and out of the gate.”
It’s Not Just a Driver Shortage
Part of the problem also can be traced to other intermodal participants who historically took drayage for granted and sought to squeeze every last penny out of draymen. The old attitude of too many in intermodal was, “If you don’t haul it, someone else will.” That simply doesn’t fly anymore, and economic pressures as much as anything else have driven some of the success the Teamsters union enjoyed in recent years in organizing port drivers on the West Coast.
Low pay isn’t just a problem for drivers. As one yard operator in the Northwest put it during discussions, “How can I keep equipment technicians on the job in Seattle who are paid $16 an hour when the minimum wage is $15?”
Part of the problem is demographic, too. Raw numbers reveal a big part of the story. While 85 million Baby Boomers are heading into retirement, they only created about half their number of Generation X-ers to take their place. The ATA has observed that 45% of the demand for truck drivers comes from the need to replace retiring drivers.
As a result of this situation full attention is being placed on the generation following the GenXers—the 85 million Millennials.
Yes, I know, the last thing you want to read is yet another discourse regarding that generational cohort, but some of the observations at the Expo went beyond the stereotypical characterizations of Millennials. Sharing what they have learned, staffing professionals at the Expo discussions noted that as a group this generation seeks a greater work-life balance than previous generations and is looking for corporate cultures that recognize this.
One example cited was a tech firm that provides its employees with free monthly apartment cleaning service. It may sound outrageously generous, but the company found that by doing this employees didn’t mind working long hours because they knew they will be able to spend their free time on their social lives instead household cleaning.
Millennials also are looking for variety in the challenges they face at work, not doing the same thing all of the time. That doesn’t mean they won’t work hard, but they expect to be paid competitively and to be supplied the tools they need to do the job. In other words, don’t expect them to get excited about working at your warehouse if you’re still using Windows 95 on computer equipment that looks like it belongs in the Smithsonian.
Many industry associations and individual companies have been active in colleges and universities, seeking to cultivate this generation. Since it was created in 2007, IANA’s scholarship program has awarded more than $1.2 million to help students in university programs focused on freight and intermodal transportation.
At the Expo there was a case study competition for teams of students sent by four IANA scholarship program universities, who also got to experience the rest of the trade show and educational sessions. (They were the Universities of Maryland, North Florida, Wisconsin at Superior and the winner, the University of North Texas).
One problem is that logistics in general is perceived as anything but glamorous, and young people these days don’t want to become “box kickers” any more than they want to become truck drivers. In addition, too many companies are going about recruiting the wrong way, one University of Maryland official stressed in a roundtable discussion.
These logistics students are thinking in terms of professions, not companies, he explained. Even companies that already support these university programs need to develop more regular interaction to establish their brand identity in the students’ minds—and not just by showing up once a year for a job fair.
It’s clear that the industry has a lot of work to do, from reclaiming the respect for the professionalism of its drivers to polishing its image among the college students and other young people it needs to recruit. IANA, ATA, the Council of Supply Chain Professionals (CSCMP) and others have made the commitment. Isn’t it time that you did, too?