Is the Truck Driver Shortage Finally Improving?
The truck driver shortage is a serious problem that has been affecting the transportation industry for several years. This shortage has consistently been growing over the past decade as more drivers are retiring, choosing a lifestyle with better work-life balance, and there is less interest in the field by new generations.
One of the primary reasons for the truck driver shortage is a lack of interest in the profession. Many young people are not considering truck driving as a career option due to the long hours, time spent away from home, and perceived low pay. Additionally, the job can be physically demanding and mentally stressful. These factors have resulted in a shortage of new drivers entering the industry.
The Recent Developments
Inconsistent hours, poor home life, and lack of interest in the field have been issues facing truck driving jobs for decades. The last few years have brought about some new issues that are complicating the ability to hire new drivers. These new challenges can be traced to increased government regulations and the deteriorating spot market, which is quickly bringing contracted freight down with it.
Government regulations have been less than kind to truck drivers over the past few years. Once touted as heroes of the pandemic and the backbone of the country, drivers often don’t feel seen as such. While many stayed at home, drivers kept working. The Federal Motor Carrier Safety Administration lifted all hours of service requirements for those carriers hauling livestock, medical supplies, vaccines, groceries, and diesel fuel.
Now those exemptions are gone and carriers are under a microscope once again. California recently enacted Assembly Bill 5, commonly known as AB-5, which forces owner-operators to pass a three-pronged test to maintain their independent contractor status when working with a larger carrier. This move could impact more than 70,000 drivers who had to seemingly overnight change their entire business model, not to mention the tens of thousands of drivers that will leave the trucking industry altogether.
Mixing all of the government regulations with a challenging truck parking situation and long detention times at shippers gives a clear picture of why trucking careers are hard to fill.
The State of the Freight Market
The spot rate market has hit an apparent floor that many hope will mean improvement soon. A majority of the spot rates in the U.S. are below carrier operating expenses. Meaning for every mile driven, carriers are losing money. The National Private Truck Council has the average trucking cost per mile in the U.S. for a private fleet as $2.90, meaning if a truck drove 100,000 miles it would cost $290,000 to operate that truck. Most spot rates are coming in below $2.90 per mile in the market.
January and February are often quiet months for freight, that quietness has continued through the spring when there is traditionally some pre-summer volume spike, but that spike did not come this year. That indicates it will be a quieter than anticipated summer.
There was a study from Bloomberg Intelligence and Truckstop.com that showed owner-operators are split on where the trucking industry is headed. Thirty percent of respondents anticipate volumes to decline over the next six months. In regards to rates, 33% expect rates to rise in the next 6 months while 32% expect them to fall.
On the flip side, the 60% of people who expect volumes to rise over the next six months is about 20% higher than those surveyed on the same topic at the end of the fourth quarter of 2022.
The Cass Freight Index measures the number of intra-continental freight shipments across North America. This covers all modes from LTL to a full truckload. Seasonally adjusted, the index was 3.8% lower month-over-month from March to February.
The falling demand combined with spot rates that aren’t overly profitable has led to a large majority of owner-operators putting off some of the new equipment purchases and upgrades due to the high costs.
Solutions to Problem
Unfortunately, there isn’t a one-size-fits-all solution to the truck driver shortage. It’s time for a full-court press from everyone involved to get more drivers behind the wheel and keep freight moving. Everything from exposing trucking careers to young professionals as a viable career option all the way to improving working conditions and benefits for current drivers.
The FMCSA has developed a Safe Driver Apprenticeship Pilot Program that would allow drivers between 18 and 20 to operate commercial vehicles in interstate commerce after mandatory probation hours. Currently, drivers have to be over the age of 21 to drive freight across state lines, which is key to most professional truck driving jobs. Some high schools and vocational schools have developed trucking simulation classes to expose teens to the possible career field.
A classic approach to solving the issue is to increase working conditions for truck drivers. Whether that is the physical conditions in the truck or a better schedule with more home time, reducing idle time at shippers and receivers. Truck drivers spend the majority of their days sitting, have unpredictable sleep schedules, and have unreliable access to a balanced diet. All of these factors are known to be harmful to overall health.
Where do Autonomous Vehicles Fit in The Puzzle?
The future of autonomous vehicles driving down the highway isn’t far off, but it’s going to become an addition to truck drivers, not a replacement. Currently, any shipper utilizing Level 4 and 5 automation, automation with no driver in the cab, has to notify the federal government before the vehicle is operated.
The initiative for adapting autonomous vehicles is great. However, as regulations come out regarding the implementation of autonomous technology, time is eaten up in the delivery of goods. Deliveries that could be crucial to keeping manufacturing running, not to mention the costs that come with fully integrating self-driving trucking into an entire freight ecosystem.
Curious about how to navigate the truck driver shortage and fluctuations in available driver capacity? Give Redwood a call to get a handle on your supply chain and not be the reason someone has to hang a “supply chain shortage” sign on a shelf.