Does less equal more?
Specter of CSA-led driver shortage holds reward potential for truly safe drivers
By Todd Dills
After talk of a 2011 driver shortage of “unprecedented levels” began to rear its head last year, Truckers News “Marathon Trucker” columnist Jeff Clark remarked that the term “driver shortage” is inaccurate. “If someone cannot find a driver to deliver a load at the rate they want it delivered at they whine ‘driver shortage,’” he said, it’s analogous to this: “I want to buy a new Cadillac for $10,000. They would not sell it to me. Hmmm, must be a Cadillac shortage.”
The real shortage was in driver pay, he suggested, and he’s backed up by a near-majority of respondents to an eTrucker.com poll conducted in November who said that pay was the biggest factor in carriers’ difficulties attracting and retaining quality drivers. At the November “Perfect Storm” conference of recruiting staff and management, put on in Nashville, Tenn., by the Truckload Carriers Association with Affiliated Computer Services and sponsored by Truckers News publisher Randall-Reilly, the mood was hopeful that, with a safety enforcement program soon to be in place putting teeth into carriers’ demands of higher rates from shippers, a new era could be coming for driver pay.
Combined with a significant freight rebound, CSA 2010 (recently rebranded “CSA” for “Compliance, Safety, Accountability” by the Federal Motor Carrier Safety Administration) could be expected to “drive rates up,” said current TCA chairman John Kaburick, president of Earl L. Henderson Trucking, in his introduction of the program. “We’ll see drivers making $70,000-90,000 a year. I think we’ll become a lot more attractive industry with a lot more qualified, skilled people.”
WHAT IS THE PRIMARY CAUSE OF THE “DRIVER SHORTAGE” NOTED BY ANALYSTS?
low driver pay — 40%
none, there is no driver shortage — 24%
lack of home time — 13%
lack of respect — 8 %
CSA 2010 — 6%
tightening health regulations — 5%
high turnover with economic rebound — 4%
Source: etrucker.com — 261 responses
Quantifying a shortage
FTR Associates’ driver surplus/shortage indicator shows an estimated shortage of varying magnitude since the third quarter of 2009, during which time the number of loads moved had just begun to rise from the bottom the freight market experienced in the second quarter of 2009. Though FTR projects a growing shortage into 2011, reaching a magnitude of 124,000 drivers needed in the fourth quarter of 2011, the shortage projections don’t exactly track to freight demand growth. By the fourth quarter of 2011, freight will be just more than halfway back to its recent historic high in the fourth quarter of 2006, FTR says, suggesting factors no one in the industry was experiencing at that time putting a constraint on the driver pool.
“CSA 2010 will be a huge problem,” FTR President Eric Starks told an industry gathering at the Great American Trucking Show in August. “The industry will struggle to keep drivers in the system.”
FTR Senior Consultant Noel Perry echoes Starks, adding that FTR’s best estimates are for CSA with other regulatory challenges to shrink the pool of existing drivers by 210,000 by the end of 2012. “In aggregate,” Perry says, “what the data says is somewhere in the neighborhood of 10 percent of the drivers are being exposed as having had problems. What we’re saying here is we expect that about a third of those people [or 3.3 percent of the entire population of drivers] will be eliminated, unfixable.”
Todd Spencer, Owner-Operator Independent Drivers Association executive vice president, sees a driver shortage as ironic — and dubious. “The industry purged itself of 30 percent of its drivers in the last two years,” he says. “They’re everywhere, but they’re not coming back to work for you if you’re not going to pay them anything.”
The last time in recent history carriers were trumpeting a driver shortage like they are today was during the domestic economic rebound of 2004-05, Perry says. “The industry hires approximately 150,000 drivers in a normal quarter. In order to do that you have to train 170,000, and to do that you’ve got to process 600,000-700,000 applications and contact more than a million people.”
As with today’s situation, during the preceding recession, fleets reduced overhead in office recruiting staff and other areas, cutting costs to the bone in an effort to survive. The industry, Perry adds, is not exactly bringing them back en force because “they’re afraid there will be another recession.”
Only time will cure that problem for fleets hesitant to hire, Perry suggests, as his firm doesn’t see a double dip recession in its forecasting. What does it see? Freight will rise by 3 percent over the course of 2011 to return to early-downturn levels (equivalent to the third quarter of 2008 in volume). FTR forecasts at the same time a growth in utilization, or the number of available trucks in service, to near 100 percent levels as fleets continue to be reluctant to buy.