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For several years, the logistics and transportation industry has been plagued with headlines of the truck driver shortage and how it is affecting the industry. Carriers point to this as one of the main reasons for tight capacity, and as a result — higher rates. But there may be more to the story

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Transcript:

Welcome to the Transportation Impact Audio Blog. Our mission is to provide shippers, like you, actionable tips and advice to help lower logistics costs in every part of your business. Did you know Transportation Impact can tell you what your shipping costs should be to within 1/10 of 1% guaranteed? We have the market data to know precisely what a shipper like you could be paying and the expertise to help you negotiate those markets’ appropriate rates. Visit TransportationImpact.com to learn more.

The Truck Driver Shortage: Just How Bad is it?

For several years the logistics and transportation industry has been plagued with headlines of the truck driver shortage and how it’s effecting the industry. Carriers point to this as one of the main reasons for tight capacity and, as a result, higher rates, but there may be more to the story.

Trucking is the primary mode of transportation in the US. Truck driving is important to the US shipping industry, because trucks are estimated to have carried 61% of total freight in 2017, which equates to 3.5% of GDP.

Given that this is an industry that’s so important to the US, one might expect that driver’s would be clamoring for jobs. Yet barriers to entry such as age requirements, CDL testing, a clean driving record, and drug and alcohol testing eliminate many candidates. Many industry experts have pointed to a lower pay scale as an explanation why there are so few new drivers entering the market to replace the aging driver population.

A recent published BLS study, authored by Kristen Monaco from the Bureau of Labor Statistics and Stephen Burks an economics professor at the University of Minnesota Morris, found that higher driver wages does lead to an increase in the number of new hires, especially for those who will work longer hours for increased pay. Even with the higher expected hours for truck drivers, the authors contend that economic incentives work in this labor market. The study also discovered that the annual trucking wages for this period of 2003-2017 exceeded those of other blue collar jobs.

The Owner-Operator Independent Driver Association agrees with the study saying the shortage could be mitigated with higher pay. The association claims that the truck driver shortage is a myth, easily rectified with higher wages.

Not so fast

Now not everyone is agreeing with the BLS study which contradicts some recent reporting that increasing driver pay has not had an impact on the shortage. ATA Chief Economist Bob Costello states that there is some information missing from the study. “The issue is not with the number of applicants for the driver positions but with the qualifications of these new hires.” He claims that carriers reject 90% of applicants because they do not meet at least one of the criteria for drivers.

The comparison to other blue collar jobs is not accurate because carriers cannot hire just anyone to drive their trucks. Candidates must meet the requirements set out by the industry and the individual carrier before they’re even looked at. Qualified drivers, not the quantity of drivers, is the real issue, which the study does not address.

The study also does not take into consideration the long hours the truck driver is away from home, which is also a significant reason for the shortage. According to the ATA, because the study ignores this contention that the ATA has stood for by many years, Mr. Costello questions the validity of the study.

There is no doubt that the industry needs more qualified drivers. Those who meet all the requirements and are able to handle the demands of the job.

Thank you for listening. For a free, no obligation, analysis of your logistics spend visit TransportationImpact.com. Have a great day!

TransImpact CEO Berkley Stafford joined Transportation Impact after seven years with Envirotainer. Prior to Envirotainer, he worked for UPS for 10 years in a variety of operational and sales capacities. He holds a BSc. in Business Administration from UNC Wilmington.

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