Channel 19

Todd Dills

Driver shortage: An economist and a recruiter ’round the bar

| March 02, 2013

jeff-clark-profile-newYou’ve got to hand it to owner-operator Jeff Clark (pictured), whom longtime regular readers will know fairly well at this point. The man can break an issue down.

If you’ve missed it as yet, Clark posted yesterday via his new-ish Freightliner Team Run Smart blog (his first post was earlier in February, there joining two other Channel 19 semi-regulars and Trucking Solutions Group members in Henry Albert and Linda Caffee, among other owner-operators) a dissection of the systemic issues around the much-ballyhooed “driver shortage” near-perfect in its presentation as, well, a conversation between two strangers in a bar.

Jeff Clark and four other owner-operators are blogging via Freightliner's new initiative to highlight owner-operator business issues and their new equipment. Find them all here.

Jeff Clark and four other owner-operators are blogging via Freightliner’s new initiative to highlight owner-operator business issues and their new equipment. Find them all here.

It not only makes the points that Clark and others have long been making about the so-called “shortage” — namely that it’s best understood as a pay or rate shortage with long-in-the-making dynamics driving it — but it does so with quite excellent humor. For the first part, get on over to Clark’s blog, where an economist and recruiter get the niceties over with, describing what they do. The economist of course is “never wrong,” he says, because:

We economists like to use the phrase “all things being equal.” Of course, all things are never equal, so we are never wrong. But let me try another example: You walk into a Cadillac dealer with $30,000 in cash and ask to buy a new Escalade. The dealer turns down your offer. Do you walk out of the dealer telling everyone who will listen that there is a shortage of Escalades?

But of course not, the recruiter says. “A new Cadillac Escalade would be worth way more that $30,000.”

Apply those same principles to the driver market, says the economist, and the recruiter begins to see the point.

Clark cut off the conversation at that point (again, find it here) but offered up the remainder to those interested — including, well, me. Following find the rest in its entirety:

Recruiter: … If we can’t get enough drivers we simply aren’t paying enough.

Economist:  Yes, but there are more factors than just money.  Tell me: what are some of the things you do to recruit quality drivers?

R: Last year we put a model in a bikini and put her on billboards and in our magazine ads.

E: How did that work?

R: Not so good — a few drivers called and asked to talk to the bikini-wearing recruiter. We told them that she was just a model and did not actually work here, and they hung up. A few of the drivers asked to see the settlement sheets to see what our guys were making. Then they never called back. We did get one driver to sign on immediately, but the bank repossessed his truck.

E: So have you tried extra incentives to attract these drivers.

R: Yes — we have been very innovative. In fact, we pay our drivers detention automatically after 2 hours at a shipper.

E: What do you pay them for the first 2 hours?

R: Nothing

E: Don’t the fair-labor laws say that you have to pay them.

R: No, interstate workers are exempted from many fair labor laws. Those laws have been in place since FDR.

E: Wow. So what is your turnover rate?

R: Pretty good. Just under 100 percent!

E: That’s good?

R: Yes, the industry average is over 100%

E: Why do you think the industry turnover rate is over 100 percent?

R: Oh, a lot of reasons. Sometimes,  we even have to let good drivers go. We had one last week who got a speeding ticket in a construction zone. It was his first moving violation in over 3 million miles, but we had to let him go.

E: That messed up his record that bad?

R: No, the D.A. reduced the charges to a nonmoving violation, but it messed up our CSA score.

E: So a driver was accused of his first moving violation in 3,000,000 miles but not convicted and you fired him?

R: Yes, the new CSA rules are tough. The government even invited Mexican carriers into the U.S. and then paid for their electronic logs and they wouldn’t come.

E: That is tough, but it can’t be the only reason to explain the turnover rate.

R: No, like I said there are a lot of reasons. Recruiters tend to promise drivers the moon just to get them in the door. Then they give them the same as everyone else in the industry. We even lost one driver to a company that promised to pay him for every mile he drove.

E: Wait — you don’t pay a driver for every mile they drive?

R: No — really, nobody does. We pay them on an antiquated system that was designed to standardize the shortest distance from post office to post office.

E: You mean zip code to zip code?

R: This system was invented before the zip code.

E: Really? So are all of these routes legal for truckers to run? And really, man, the GPS in my car can immediately calculate the distance from door to door. Why don’t you pay them door to door?

R: No, most of these systems just calculate the shortest distance, and the industry standard is hard to change. We just can’t go into a customer and tell them that the distance between two points has increased since last year.

E: Now I see why there is a driver shortage.

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  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Sure as you see its a Complete RIPOFF..the driver is not aware of all these Con Games..as the recruiter LIES to him….so he figures he got took shortly after he starts work….then he QUITS. Hence the 100% Turnover.

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Zero Pay for the First 2 Hours?? Who the hell is going to pay the driver’s bills while he is tied up at the Millionaire Shipper?
    There is No Shortage of mexican labor hauling these loads for CHEAP…and they ARE willing to sit their for FREE with their entire family living in the jalopy “truck”. Why dont these people expose trucking for what it is….these “articles” are always a glossy whitewash..to benefit some Millionaire….while the American Trucker is Ripped Off Beyond Belief….I would rather read something REAL…this recruiter is a filthy LIAR and he knows it….how many thousands of drivers have been BURNED by anuses like THIS????

  • http://www.facebook.com/william.mckelvie William McKelvie

    Mocking the way that these companies treat drivers? Yeah that is not so grand. Mocking a company fired an owner operator for speeding in a construction zone? I can see that happening, no reason to be doing that, especially ten or more over in any construction zone. What if he killed someone or worse, who would be making such a mockery then? The Pratt and Crash people would be making headlines again, for an owners rear end overloading his own intelligence.

  • martymarsh

    LMAO, keep your job and your empty trucks, I will die and outlaw even if it means with no job. Firing a man with 3 million miles is like slitting your own throat. Get a hold of Washington and let them know you are in need of a couple hundred angels. You truly can not fix stupid.

  • jeff clark

    OK-the driver fired was me-I had just passed the first construction zone sign had about 10 seconds between the next vehicle and myself and was guilty of coasting in at the previous speed limit instead of braking. – and yes I am in favor of raising the standards for training and licensing, but I am not in favor of using racist terms.

  • JB

    Start your own lawn mowing company, you will make more money, LOL

  • http://www.facebook.com/gary.donnelly.357 Gary Donnelly

    my trailer hit a stop light that inched down from the day before when i went under it, note i go under this same light very often. the company charged me with a preventable accident and put me on 60 day probation telling me accidents are not allowed here and one more i will be let go. so that was my last day with them.

  • mousekiller

    William, your hypothesising about the could a beens and the what if’s do not count. The ticket was lowered to a non mover thusly should not become a safety record entry. Why do so many people jump to the what if instead of actually looking a the facts. It is evident that he did not have any kind of accident or incident. Fact is that the company that did this is not going to be in business long due their poor business management techniques and lack of driver considerations.. All it will take is one accident and their pie in the sky attitude will crumble like last weeks pie crust.

  • mousekiller

    Mike,
    Your like the others. You think that it is the Mexicans that are taking your freight and keeping the wages low,. Ill had the most cash start up trucking companies in the country. Chicago gestapo Daly machine all over again.They are out of Elk Grove. Tinley park and other places around Chicago. These carriers are owned by the Middle eastern factions and hire these Mid Eastern illegals to drive for them. It is NOT JUST THE MEXICAN driver you need to worry about. These mid eastern drivers are already on our roads and most don’t get noticed because they look like most of us. They cant drive either for that matter but we all get lumped into one big gunny sack.

  • cherokee

    does anyone remember thegood ole days when trucking was regulated by the railroad com. and a company could charge only what the tarrif was,,,,,,cos. like cand h,,j h rose,,,wales transportation, etc. just to name some flatbeders….are no longer in business cause any person with a few bucks can buy their own truck and traier and bid loads and oh yea ,,,brokers,,,,,,,the two hour law went out with regulation,,but the shippers and receivers don’t understand that,,,they think it’s law u have to give them that time,,,later,,,,cherokee

  • Henry Frapp

    Last year I sold my trucks. I had 4 tractors, and I got tired of fighting punitive government regs, lousy new truck quality because of emissions laws, (if you’re an O/O, for God’s sake, stay away from International) and having my pockets picked by toll roads, 2290s, lumpers, shippers, oil companies, insurance companies, and the penny ante bureaucrats who think they can fund government programs by sticking it to the trucking industry. I’ve been a driver since 1974, multiple truck owner since 1999, and if there IS a driver shortage, it’s because guys like me have had it with trucking. I am no longer in trucking, and God help me, I will never do it again. I’m not old enough to retire, so I’m trying to start another business completely unrelated to trucking, but if I never make a dime it’s better than trucking. You young guys- if you’re just starting out in trucking- GET OUT NOW!! It will only bring you heartache and grief, not to mention horrible paychecks. Let the industry COMPLETELY collapse, and then perhaps you will have a chance of making more than starvation wages. As long as there are knuckleheads like me who spend nearly 40 years in trucking hoping that somehow, someday, some way, we’ll be paid a fair wage, nothing will change. You’ll make more money waiting tables, and you can sleep in your own bed at night.

  • reuben

    all it would take for everyone to look at trucking is for every truck to stop moving at the same time for 15 minutes and then for everyone to pay attention is every truck stop at the same time for one hour but getting every driver to do that would be impossible

  • D.E. Murphy

    I wonder if the shipper charges actual miles and
    the drivers get zip to zip? Similar is to be said about the fuel surcharge, every
    shipper pays a different percentage to the driver. If a recruiter misrepresents
    material facts, then the shipping company should be sued for breach of promise.
    The problem is the margins are so slim, that a small firm couldn’t afford the
    time and money to fight the big trucking operations. Until the drivers and
    owner operators organize, we will never see the end of the flaws in the
    industry. D.E. Murphy, Freight Transport Company, Inc.

  • http://www.facebook.com/people/Minder-Kat/100002121670952 Minder Kat

    All things being equal. That’s luxurious. For the same reason a coffee picker in Kenya, or a garment factory worker in China are being paid 1/100th of one cent per dollar revenue for that same product in the U.S.A, a truck driver is going to be paid a hunger wage in the U.S.A. What on earth makes truck drivers think big business is going to pay you a fair rate? The ONLY way around big business, is to not play in their yard, with their toys. (Big Business = any company listed on the NYSE)

  • Scott Lawrence

    I am an independent O/O. Been this way for 10 years now. 5 million miles under my ass.
    I am getting freight right now at prices that were out there a year ago when fuel was $3/gl. When I ask the broker if they are aware of the rising fuel prices they all say “huh?”
    Hauled a load of potatoes from eastern Idaho with 4 drops to Jax, Orlando, Tampa, and Largo. Last year this load paid $5900. He wanted me to haul it for $4400. Had to bitch at him to get to $4900.
    Tire prices up 40%, fuel up 33%, shop rates up %50, spare parts suck. An army of Forest Gumps bidding the freight down, Falling behind in maintenance and everything else. 6 more payments and I’m retiring.
    Yes Drivers, I do think its about time to shutdown nationwide for 2 weeks and give em all something to think about!

  • http://twitter.com/howddydutytime Mike Smith

    Amen!!!!!!!!!!!

  • http://twitter.com/howddydutytime Mike Smith

    This is the way they are occupying our country with the help of our own pathetic government. A gov that is suppose to protect its citizens.

  • Joe Payton

    Driver shortage? Shortage of drivers willing to put up with being treated as nothing but an expendable # is the real problem. Terminated a lease with a very big company because after 13 months and 165,000 miles, I was not making any money and was told that I never would because I chose to drive as a solo. However, they made plenty of money and never even thanked me. Won’t say who they were, but I bet anyone can guess who!

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Right On Henry!! You got away from the ABUSE!! Yep it has become intolerable…they have gone Way too far in ripping off Truckers…….So many guys are leaving…and its the smart thing to do……it is no longer a free enterprise…its Gov.Controlled and Gov. taxed…to the point you cant really make a living….I applaud your courage for moving on to something sensible…there is no future in this industry.

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Yep even a paper route is better than this crap industry.

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Yep retiring is the smart thing….you cant make enuff money for maintenance these days….andthen the CSA cops get ahold of ya…..GOTCHA!!! Its more like a comedy than anything….Those Brokers always have Damn Nice cars in front of their offices…fancy jewelry….they are Stuffing their pockets with cash owed to the O/O..and that aint gonna change..

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Yea..True….the game is in favor of the wealthy today.

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Yea they are all Crooks…shipper and broker….they lie cheat and steal….it IS criminal what they do….but they have Lawyers to fight you in court…which is expensive…they say anything and pay you as little as possible..the numbers are all made up…..they pocket every penny they can STEAL.

  • http://www.facebook.com/profile.php?id=1269137418 Mike Jones

    Yes the Towel Heads I believe they are called….I know they are ILLEGALS also…….and hogging up every load they can….and RUSSIANS too……

  • THE GEORGE

    You can make more money as a Lumper, and be home every night. The Hell with trucking.

  • David S. McQueen

    It’s not surprising (but it IS outrageous) that one of the top 5 violations found during roadside inspections is “non-English speaking driver”.

  • David S. McQueen

    The dual-government (federal and state) system does not create wealth. Both exist financially on how much they can take from private enterprise and from individuals. With the VMT (Vehicle Miles Traveled) Tax looming in Congress, and the soon to be realized tax increases for ObamaCare, I seriously doubt the USA will survive except as a third-world country.

  • FRANK DEL ANGEL III

    HEY MIKE….put away your racist fingers and pull out your damn thumbs. you bitch because of Government taxes and regulations, and THEN you bitch because of lax immigration enforcement. Make up your mind miKKKe (yeah, the KKK is there on purpose) run a more efficient operation or pick better loads. Either way, enough of blaming the Mexicans…..and start blaming the man in the mirror. You need to realize that you are not one bit better than those other drivers you are with at all those cheesy truck-stops you racist ass.

  • ron geremy

    Some of you white folks are also guilty of running dirt cheap freight. The best advise is to get your own authority! You can run the oldest truck in the world,leased that’s not going to happen.

  • Bruce Kolinski

    The United States is already the world’s most indebted,bankrupt banana republic in world history – we just don’t know it because we no longer have a free press. Our political and economic future is fully controlled by the Democrat patronage vote and Establishment Republicans too corrupt to get out of their own way. Small business owners and hard working folks have been completely disenfranchised.

  • http://www.facebook.com/channel19todd Todd Dills

    Not top five, David — it’s only common in a few states — Texas, N.M., and Arizona are the ones where it’s most prevalent. All of the maintenance violations are much more prevalent, as are log violations.

  • http://www.facebook.com/channel19todd Todd Dills

    I’d really appreciate it, Mike, if you’d give up the racist stuff in your comments. Go ahead and talk all you want about changing demographics, and you make good points from time to time for sure, but hang up the racist terms. I appreciate your comments on here but I believe many of the others here would agree with me that using words created by haters to villify big groups of people solely on the basis of skin color, nationality, etc., does not serve your points well.

  • Sherlocktoo

    I knew by the end of Obama’s first year in office, it was time to sell out. It had only gotten worse, even before that. But when DOE head begin his official duties with a call for higher gas prices, I knew it was time for me to get out. Sold my trailer, then sold my tractor, and went to work for the other guy. First job was bad, second a little better, then finally a good job, but it didn’t last. Was hired 1.5 later with a promise of 50K, but 2 months into it, was averaging a little more than 800 per week. No, not by the mile, as they change their pay rate from hourly to route per week. Yeah, the can do this, so I gave notice and left telling them they broke their promise. Live and learn.

  • blkpete01

    this goes to every one out there pointing fingers at each other, I would suggest one smart thing to do get UNITED get ORGANIZED and work towards a common interest,to the best interest of the ones being ripped off by the system from O/O to Co.drivers YOU guys need to do something drastic to stop the abuse enough is enough!

  • http://www.facebook.com/luisa.a.nims Luisa A. Nims

    Excellent article! And so true, glad you are addressing this issue in a humorous and informative way.

  • Harman

    I Agree mike…i work in fontana..out of 18 drivers I am the only one that speaks english..and i work for a national company…and i am on the road all day with the can haulers and the junk trucks out of mexico….as if the car drivers dont take enough pot shots at you,,the truckers and i use the term very loosely…the trucks want to speed…cut you off….ride your rear bumper….and CHP just rides on by ignoreing the situation.

  • GSB

    This broker take out $500.00 from the rate saying driver was late even I’d told the broker a day before that we ran into an issue and our ETA had been delayed. Now what can I do get my money back? I assume NOTHING! We as carrier need something so brokers and customers fear us rather than us hard working drivers, doing all the work, begging for their mercy.

  • me

    sold mine almost 7year ago miss it but dont miss headachs ,went to work for delivery company 5 yrs ago it was great at first couple years then i noticed they started pushing an preaching safety at the same time there computor tells them it should only take you two hours to get there then 15 min to diliver ,ect.. they set things so tight you have to to break laws to get the job done .but they dont want to hear about it,they preach moral conduct ,safety then want to know why your late for appointments we also drive cam in cab spy cam!when i start my computor log get to my first drop it even shows me 30 min to hour behind the only way to keep up with it is to be moveing when you go on duty and drive min5 mph over speed limits.otherwise they say your screwing off ,not doing your job ,you must be taking a break somewhere and way to many .!wish i was 21 an not 51 and know how the industry turned out,
    ,wouldnt do this agian!

  • http://www.facebook.com/people/Sp-Peterson/100002815251232 Sp Peterson

    Our company has ben looking for 3 route drivers for almost a year. We offer home every weekend, company paid motel & meal per diem. A benifit pkg. with all the goodies med, vision,dental, profit share, sra.. paid vaca. What we ask in return, is an honest days work, clean driving record, drug free, CDL/H. What we get??? Drivers who all they want to do is drive, have someone else load & unload the truck.
    Please drivers (current & present) what is it going to take to get 3 people who want to work & earn a decent wage??

  • Buford Powers

    Why don’t people tell the truth. De-regulation is the reason for driver shortage and Owner Operators quitting the industry. Just another example of politicians selling out the average American (Ronald Reagan) in favor of corporate interest. When one conducts business, one issue’s a invoice for services rendered. De-regulation allows the customer to dictate price and now the corporate customer tells you they will pay what is beneficial to them.Why do average White Americans keep selling out to corporate C E O’s, when they already have more then they will ever need.? White American Make your leaders pay you something you and me can live with, or will you suffer to keep those other people down. PS. I’m use to it:).

  • Sophia M

    Driver shortage may be due to driver managers who play games with female drivers. The driver manager seems to think that a female deiver MUST play with him, otherwise he finds a way to fire her. I took mine to court, and even though this manager did not have a correct truck, trailer or description of accident the judge still ruled in his favor, I could not get a word in. It was snowing outside and the judge needed to get home before the snow fell, oh yeh it was also a Friday afternoon. This is sorry and stupid!! Multnomah county and Market Transport do not need to be in business.

  • David S. McQueen

    Sorry. I was just quoting the FMCSA stats. I’ll never quote them again because there are NO illegals in New York or Illinois or California. I stand corrected.

  • Smitador

    I cannot speak for the entire industry, but in my company we calculate the miles using the above mentioned method. the company and the driver are both paid for that mileage, not the hub miles (actual miles driven). we do pay the drivers for the empty miles they drive to pick up the load as well, but that is not forwarded to the shipper. This is just another example of the power being in the hands of the shipper, not the driver or the carrier.

  • Smitador

    that response there, ” Fact is that the company that did this is not going to be in business long due their poor business management techniques and lack of driver considerations.” That is how this situation should work, but it doesnt. The “free market” of the transportation industry is shrouded in fear and unapplicable, one-sided regulation. If the price of freight was really determined by the market for it, things would be different. rates would be higher, and driver pay the same. the sad thing is that the carriers/brokers are doing it to themselves. there will always be a company willing to take a load for a dime a mile less. Hell, sometimes even bid a dime a mile less, without the intention of even taking the loads. its time for capacity to govern freight prices not the shippers.

  • http://www.facebook.com/jim.bias.54 Jim Bias

    Probably should call it an idiot shortage… that’s what they really want to say!

  • Toby

    there is a driver shortage for a reason …… and there should be a driver shortage , that is the sign of a healthy economy. If there was not a driver shortage what would that tell you about our countries economy ??? Trucking is a minimum wage entry level bottom feeder temp. job. The problems come up when people get stuck in it for years. People that spend years driving trucks need to ask themselves , why am I stuck here ???

  • toby

    what is it about your company that turns everyone off ??

  • ROGER VINCENT

    so lets go home, see how long it takes for them to miss us, and give us what we need to survive, the drivers keep taking and butting up with all there rules ,regulations, and abuse, for nothing, its time for us to stand up and be real man, and control what is going on out here in the trucking world, so till then keepon working for nothing, and being treated ljke a child. also think about this i’m being held hostage 10 hours a day, 34 hours every 7 days, this is against the law for other people, but not truck drivers. WAKE UP DRIVERS.

  • http://www.facebook.com/jojo.klemm.1 JoJo Klemm

    I don’t believe in a “driver shortage”. Abolish Hours of Service, at the very least abolish it for drivers with 200,000 miles or 3 years of driving a big rig. Why do we have to put up with H.O.S forever? Why do motor carriers have to spank us for violating idiotic rules made to put us all in the same communist box.