The trucking industry has about 80,000 fewer available drivers today compared to a year ago. Currently, the OTR truckload driver count is at its lowest point since September of 2012. Knowing this, it comes as no surprise that many fleets are having trouble finding enough drivers.
We took a look at some of the biggest factors that are causing the truck driver count to decrease and have some recommendations for what fleets can do to try and combat the limited driver supply.
COVID-19 & the Aging Demographics of Drivers
One of the leading causes of truck drivers getting out of the industry during the pandemic was the pandemic itself. The trucking industry saw a surge in retirements among older drivers who were at-risk of facing serious complications if they happened to contract the virus. Many who were close to retirement didn’t feel as though the health risks were worth continuing to work for a few additional years.
Even prior to the pandemic, trucking was already dealing with issues of drivers retiring. According to the National Transportation Institute (NTI), retirement accounts for 54% of the lack of drivers. It seems as older drivers retire, the younger pool of drivers entering the industry is not large enough to make up for the exits.
The problem is only going to be fixed with creative solutions for recruiting younger people into the industry. The median age of over-the-road truck drivers is 46 while the median age of a private fleet driver is 57. Both of which are well older than the average age (42) of U.S. workers as a whole. To compound the problem, ATA also lists the average age of a new driver training to enter the trucking industry is 35.
Unemployment Benefits/PPP Loans
With several trucking companies going out of business during the peak of the pandemic in 2020, combined with layoffs forced by COVID-19, many truck drivers began receiving unemployment benefits. Despite a recent rebound in employment numbers in the trucking industry, nearly 1.4 million people in the trucking industry remain unemployed according to the August 2020 report by the Bureau of Labor Statistics. This is an increase of nearly 800,000 (136%) year over year when comparing the numbers from August 2019. The U.S. unemployment rate peaked in 2020 during the month of April at 14.7%. But with Coronavirus cases increasing again and lockdowns being considered in many parts of the country, it’s hard to tell whether or not the US will reach that point again.
With enhanced unemployment benefits, stimulus checks, and a federal stimulus package that included PPP loans for small businesses, many made the decision to accept these benefits instead of risking their health driving during the pandemic. Many drivers even discovered that with the increase in unemployment pay during the peak of the pandemic, they were actually taking home a comparable amount of money to what they were making driving, while also minimizing their risk of contracting the virus.
Additionally, it’s estimated that 105,800 trucking companies received PPP loans, which saved a reported 737,773 jobs in trucking, according to an analysis by FTR Transportation Intelligence. However, it’s unclear how many of these drivers and companies whose jobs are being supported by PPP loans are continuing to run.
The Drug and Alcohol Clearinghouse
The trucking industry saw thousands of drivers exit after the Drug and Alcohol Clearinghouse went live in January. The Drug and Alcohol Clearinghouse is a new database that contains information pertaining to violations of the U.S. Department of Transportation (DOT) controlled substances (drug) and alcohol testing program for holders of CDLs. The Clearinghouse provides FMCSA and employers the necessary tools to identify drivers who are prohibited from operating a CMV based on DOT drug and alcohol program violations and ensure that such drivers receive the required evaluation and treatment before operating a CMV on public roads.
The CDL Drug & Alcohol Clearinghouse removed 40,000 drivers, about one percent of the driving force, from January to September due to failed drug test results, most of which were from marijuana use. Of this group, about 80% have not yet started the return-to-duty process. If the Department of Health and Human Services publishes a hair follicle testing rule, it’s estimated that five to 10 times as many drivers will become ineligible for employment. However, many large fleets have already adopted hair follicle drug testing.
CDL Schools Being Closed
Another contributing factor to the current lack of drivers is that fewer drivers have been going through training schools due to limited seating capacity from social distancing. Driver schools are graduating 30% to 40% fewer drivers, and it’s estimated this will result in tens of thousands of drivers not entering the labor pool this year. Furthermore, 71% of fleets halted training programs, according to an NTI survey.
In 17 states, the backlog to get a commercial learner's permit is 30-90 days, with social distancing and COVID-19 prevention measures causing delays. About 20% of truck schools are still closed, and the remainder are graduating fewer students due to social distancing. It’s unclear how many of these schools are just closed temporarily and how many have been closed permanently.
Rates & Pay Increasing in the Spot Market
Due to the decrease in truck capacity, spot market rates have increased to near-record highs over the past several months. According to DAT Freight and Analytics, the national average for van rates set a record high, hitting $2.38 in September. This is six cents higher than the previous high mark set in June 2018.
This has caused many drivers to obtain their own operating authority to try their hand in the spot market. These drivers aren’t leaving the trucking industry altogether but they are leaving the pool of drivers available to be brought on by fleets and carriers. According to FTR, the third quarter saw new motor carrier registrations increase by nearly 10,000, which is an all-time record. As mentioned earlier, with cases increasing and the threat of stricter lockdowns across the country, who knows what will happen to the spot market over the next couple of months. Drivers who recently obtained their own authority could be looking for work with a carrier sometime soon.
What Can Fleets do to Bring Drivers Back?
Unfortunately, a lot of the problems laid out above are out of the control of the fleet. There are going to be drivers who aren’t going to come back until they feel safe from the virus. Many fleets have already implemented increased safety protocols for their drivers in order to decrease the health risks they face when on the road. But for some drivers, this isn’t enough, and they will stay off the road until a vaccine is available and the threat of the virus has significantly decreased. Additionally, fleets have little control over drivers being lost due to the Drug and Alcohol Clearing House and drivers not being added due to CDL Schools being closed.
However, there are still things fleets can do to recruit drivers. Even though capacity is low, there are still drivers out there, but the recruiting battle to land these drivers will likely be fierce heading into Q1 2021.
CCJ recently released an article written by Richard Stocking, the former president and CEO of a large trucking company, and who is currently the founder and CEO of a transportation consulting firm that helps fleets with strategic operational improvements and M&A activity. In his article, Stocking lists out a few strategies fleets can consider using to improve their recruiting.
Here is a summary of those points:
Update your business model to embrace a younger and more diverse workforce.
Predictable work. Predictable pay. More home time.
It’s time for carriers to start thinking differently to improve efficiency for drivers (Richard goes in-depth on this point in the article).
Shippers and receivers need to be part of the solution by keeping their commitments.
Stay focused. Just because we’ve done something one way for decades doesn’t mean we should keep doing it that way. The current freight and rate environment has given us an opportunity to push for improvements on behalf of our drivers.
You can read the full article by clicking here. Think about these different strategies and see how you can implement them into your own driver recruiting and retention strategy. Truck driver capacity was a problem long before the pandemic and will continue to be a problem after the pandemic as well.