As the economy recovers and truck freight increases, a driver shortage is emerging but several factors are working against meeting the demand for drivers, speakers said at an online seminar, “The Emerging Driver Shortage,” June 24.
Forecasting below-average economic growth of 5 percent to 6 percent over the next three to four quarters, Noel Perry, a senior consultant at transportation research firm FTR Associates, said, “We don’t have to have a wild recovery to get a driver shortage.”
Perry and Tom Kretsinger Jr., president and chief operating officer at American Central Transport, gave their views at the webinar presented by Overdrive and Truckers News.
Perry said that even though the driver shortage could average 200,000 drivers annually over the next couple years, carriers are unwilling to gamble on ramping up hiring significantly “until they see a strong, consistent, long record of earnings.” He said many carriers laid off recruiters, trainers and dispatchers and aren’t about to rehire them right away.
Economic conditions have created a driver shortage that will match the shortfall in 2004, Perry said. Experienced drivers are in short supply because many dropped out of the business or retired during the recession.
Perry pointed out that new federal regulatory initiatives, notably citizenship identification, the ongoing hours of service revision and Comprehensive Safety Analysis 2010 will reduce the available supply of needed drivers.
In the past, small fleets provided fill-in capacity during economic rebounds, but Perry said they may not be as available this time or their entry into the market may be delayed.
Kretsinger said the recent recession marked the first time carriers rapidly downsized their fleets. That resulted in measures such as driver surpluses, reduced pay and the weeding out of the worst drivers. He said driver rules and regulations such as CSA 2010, tougher medical exams, sleep apnea problems, electronic onboard recorders and hours requirements, plus attacks on independent contractor status, will make it tougher to rebuild driver ranks.
“Carriers are no longer willing to grow as the supply/demand equation turns until their return on investment capital returns,” Kretsinger said.
Kretsinger said owner-operators are facing difficult times on many fronts, including running aging equipment, high maintenance costs, expensive new trucks, stagnant pay rates and government attacks on the independent contractor status. “[The federal government] has already increased the budget of the IRS to start auditing and challenging people, and that’s a frightening thing on the owner-operator side….,” he said.
Perry said driver wages are well below the average, but it will take time for pay to recover. “These wages are going to have to come up again to attract drivers,” he said. There could be a nine- to 12-month delay between freight increases and the beginning of driver pay advances, he added. Kretsinger said compensation such as sign-on and referral bonuses will be offered before wages start rising.