Is the Trucking Shortage a Self-Inflicted Wound?

The growing truck driver shortage has been working against the trucking industry for quite some time now. And, with approximately 70% of the country’s tonnage transported by trucks, economists, supply chain managers and consumers everywhere are on edge about what a continually increasing shortage could do to the market overall. There are many suspected culprits behind the current shortage of 48,000 truck drivers in the United States –-impending automation, for instance— but is it possible that the trucking industry’s massive shortfall is a self-inflicted condition?

The Truck Driver Shortage at a Glance

It is estimated by the Bureau of Labor Statistics that 48,000 trucking jobs are vacant across the United States. But the already significant dearth of nearly 50,000 positions is not what has transportation industry experts quaking in their boots—rather, it is the far larger shortage that is set to come. Currently, around of 36% of all American truck drivers are aged 45 or older. With their retirement looming, the country may be facing hundreds of thousands of trucking openings in the 2020s.

When looking at the labor statistics, what immediately stands out is the industry’s ineptitude in recruiting young drivers. 18-24-year-olds comprise the smallest portion of the truck driving workforce, and the industry has a problematically high turnover rate (usually around 90%, which means that nearly all new drivers quit after their first year on the job).

Simply put, truck drivers are quickly aging and the industry is failing miserably to recruit young drivers to replace them. That established, what is the cause of this unhealthy paradigm? Most tend to attribute the rising shortage to the very nature of the work itself—all truckers know that, at times, driving a truck can be a lonely, thankless job. Life on the road certainly won’t appeal to many people, and some speculate that millennials simply don’t enter/remain in truck driving positions because they would prefer a different line of work.

This may not be the only cause of the shortage, though. Rather, some are beginning to wonder if the organizational setup of the trucking industry itself is to blame, rather than the nature of the work—the shortfall of drivers may be a self-inflicted wound.

The Inefficient Structure of the Trucking Industry

Although the ATA likes to attribute the truck driver shortfall on the harsh demands of the industry, Steve Viscelli, a Sociologist from the University of Pennsylvania, instead of points a finger at the uneconomical manner in which the industry operates as a whole.

Viscelli, in an interview in the Wall Street Journal, is highly critical of the staggering percentage of long-haul drivers that work as contracted owner-operators instead of full-time employees—nearly 25% of long-range drivers are for-hire owner-operators. Rather than working for a company (and thereby using a company’s equipment), they have to undertake heavy financial burdens as they lease/purchase their own vehicles.

In order to pay-off that huge overhead cost, they have to put in 70+ hours of driving in per week to simply break even. And, perhaps the most damaging factor in the equation is that truck driver that make long-haul trips do not get paid for their time, but rather for their distance. For the owner-operators that make deliveries along the east coast or congested southwest, this means that drivers could spend 10 hours behind the wheel, at work, but only make a few dozen dollars due to traffic and standstills.

Now, that is a pretty bum deal, and it helps to explain the high turnover rate among drivers. Long hours (some of which are not reimbursable), days/weeks away from home and massive debt repayments do not come together to make an attractive job. Not all truck driving jobs, though, are this way. It seems as if the long-haul industry is systemically flawed, especially when compared to LTL and company truck driving positions.

LTL Jobs vs. Long-Haul Jobs

Not all truckers are suffering from the effects of a flawed system. There is a vast divide between the workplace happiness and turnover rate between long-haul carriers (some 90%) and LTL fleets (a mere 8%). Moreover, LTL workers under the auspices of a formal company—take UPS, for instance—often clear $70,000 per year.

Sounds like two different stories—so what’s the difference? Kevin O’Marah, in his piece in Forbes Magazine, credits the systematic differences between the world long-haulers and LTL carriers. The former tends to treat the labor as a commodity, rather than… well, labor. LTL fleets, on the other hand, work for a formal company, receive steadier pay, gain protection from excessive hours and harsh treatment and do not have to bear the burden of equipping themselves. Furthermore, they tend to make deliveries relatively locally—they don’t traverse the country, as do long-haulers. Most of them are home for dinner every night. They lead quite a different, calmer daily life than that of their long-distant peers.

How Can the Trucking Industry Recover?

So what is the fix? How can the trucking industry save itself (from itself)? While it is still subject to objection from industry experts, the long-range trucking side of things may need a total overhaul. While owner-operators can find ways to make big bucks in the economy, it is not an easy road to follow. New owner-operators incur massive costs purchasing, leasing or renting new equipment. And despite the large driver shortage and the influx of demand for truckers, it can be hard to establish a stable clientele that can help eliminate overhead debt.

The only way to make long-haul trucking a more sustainable profession may be to encourage companies to hire permanent drivers. Or, on the other hand, the transportation industry may be able to incentivize long-haulers to stick with their job by changing from a pay-per-mile system to a remuneration that takes hours worked into consideration.

But, the necessary restructuring of the trucking industry is quite a ways off. In the meantime, as an owner-operator, you’re going to need some help with financing. Get in touch with Factor Finders—we are the best at finding owner-operators a freight factoring company to their cash flow problems.

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