Truck Driver Shortage: Addressing Safety, Driver Wages, Retention, Driver Job Hopping and Turnover rates.
The time has come for everyone within the trucking industry to address the facts about the infamous truck driver shortage. The driver shortage is not really a shortage per say, but rather a reduction in the abundance of excess drivers that were previously available in the past.
Before I go on, let me start out with this statement: truck driver wages have not changed in 25 years.
Here is a breakdown of the difference between the truck driver shortage of the past and the present so called truck driver shortage:
In the last few decades it has been common to have as high as a 125% turnover rate for drivers within the trucking industry. As long as I can remember ads have been claiming there has been a truck driver shortage, a ploy to attract thousands into the driving sector of the trucking industry.
The ads would read something like this:
“Make 100 thousand dollars driving a truck, see the countryside, no skill needed.”
Those entering the industry would receive their CDL license, many times from a trucking school, sign-on with a starter company which completed their training, and basically run team from anywhere between 18-25 cpm, driving with a trainer. They would be out for weeks or months at a time earning a weekly paycheck of between $200-$400. During this time there were many abuses existing, but that’s another topic.
Also during this time, many carriers did not raise the wages for their veteran drivers, mainly because they could get their freight moved cheaper by the steady influx of new drivers entering the industry.
Most new drivers left the industry, disillusioned after less than a year, only to be replaced by others, and so the churning of new CDL drivers continued as well as the high turnover rate. The result? Freight rates remained low and so the race to the bottom evolved along with low retention rates.
There was no REAL driver shortage as it was a business strategy to get people to enter the industry and to keep wages down. There was actually an overabundance of drivers, but they were not staying and the carriers did not care. Mission accomplished. Freight was being moved cheaply and veteran drivers would not complain about wages or treatment in fear of being replaced. Life was good for the carrier. Truckers complained in the Trucking Forums and truck stops where their voices went largely unheard.
What has changed now when referring to a truck driver shortage?
The short story is people are leaving the trucking industry, and less, rather than more as in the past, are entering. For the experienced veteran, it is no longer worth staying and for any potential newcomer, it is not worth entering. The short answer to the “why” equation is simple: wages do not match the time and sacrifice of the vocation. Many drivers who have opted to stay cannot find employment (unqualified), which we will explain.
The average age of the driver today is around 50 years old although I know many who are older. Many veteran drivers began their careers in the 70’s and 80’s when wages were envied and drivers were respected. As we entered the 90’s, the rise of Truck Driving Schools became popular and the FMCSA set requirements for a CDL License. Driving schools, company training, Government Subsidies, and cheap labor were common terms. Along with it came many other terms such as cheap freight, DAC reporting, retaliatory treatment, and starving out.
CDL training, both school and company training, became the formula for higher profits.
The industry’s business model has been the same for decades: claim a driver shortage, attract more people to the industry, receive government subsidies, move freight with low entry level wages, keep freight rates low, and eventually make it difficult for owner operators to compete with the giant “company driver” carriers.
Veteran drivers accepted the fact that their wages would no longer rise as well as the fact that many hours of unpaid labor would continue to be a part of the vocation. This became an acceptable part of the job. Drivers would be pushed to their limits against Hours of Service in order to maximize profits, often pushed to go over the legal hours. Trucks reported by drivers with mechanical problems were told to “keep going” and if they complained, they could be “punished” with “no miles.” During these times drivers would receive DOT violations, such as over hours or mechanical problems, while the company did NOT receive the violation. Was the safety of the driver a company concern or did company profits trump safety?
Drivers began “Job hopping” looking for that “better job” or that better company which would pay and treat them better. Sometimes they found it but most often they did not as again, this is the standard business model for the industry.
So what has changed? How is the “driver shortage” different than it was in the past? Is there now a real driver shortage and if so, how can it be resolved?
- WAGES – As the years roll by, drivers are now leaving because they have not been adequately compensated for their sacrifices and TIME. This is more evident than in the past as the cost of living continues to rise and driver wages have not gone up in the last 20-plus years. Time away from home and being available while out on the road 24/7 must be considered, not just the piece work or CPM. Drivers must be paid for ALL work. A salary would solve many of the issues drivers are confronted with.
Pat Hockaday of TruckersUnited.org has a detailed solution for Drivers Wages. We urge everyone to look at it.
- Health and Retirement : Yes it is true that the average age of veteran drivers is 49 and many will be retiring soon, but it is not just their age, it is also their decision to retire. Again, a main reason is that the sacrifice of the job does not meet today’s required wages. Also, the lifestyle leads to many health concerns such as the availability of nutritious food, lack of exercise due to the sedentary lifestyle, lack of medical resources while over the road and the inability to take time off to address an illness for fear of not being paid. A salary wage would address this problem: a suggested one-week paid vacation and five personal days to address illness and medical appointments.
- The Qualified Truck Driver – The implementation of CSA has now made the carrier and the driver responsible for violations and crashes, not just the driver.
Companies have a safety score which is public and used by shippers, brokers, and insurance companies. Drivers do not have a public score, however they have a PSP report which reflect their last few years violations and crashes. Carriers look at this and based on the driver’s PSP, determine if that particular driver would be a “risk” for violations, thus used as a predictor for compromising carrier CSA scores.
This has greatly affected how Carriers Hire. The result is THOUSANDS of drivers looking for employment but not being hired. What does the ATA say about this? According to the October 2015 Truck Driver Shortage report:
“Many carriers, despite being short drivers, are highly selective in hiring drivers because they have made safety and professionalism high priorities.”
Is it safety or is it their CSA scores and insurance premiums? After all, prior to CSA, they never appeared to be quite as concerned about safety. This is an unarguable fact.
- Job Hopping – According to the ATA 2015 Truck Driver Analysis – Drivers who are looking for better jobs, including better pay and better treatment and who appear to be “job hopping” are considered “not qualified.” In other words, they are available for employment and though not technically considered part of the “driver shortage” the fact that companies are reluctant to hire them, makes them unavailable for the hiring process. The ATA blames this on other companies trying to lure their good drivers to drive for them instead by offering the driver a hefty sign-on bonus. The question is, if their current carrier is such a great company, why are they not staying with them and why do they continue to job hop?
- Regulations – Drivers are leaving because of added or modified regulations such as Hours of Service, ELD’s, anticipation of Speed Limiters, etc. Many regulations which in theory are intended to increase safety, actually have an opposite effect when drivers are being paid by their productivity and CPM. These regulations that are put in place limit driver productivity and their wages, creating an urgency by the driver to get more miles and therefore become a safety risk. A solutions is higher driver wages, again, preferably salary.
Interestingly enough, Carriers look at Regulations, specifically HOS, as a cause for the driver shortage also, only with a twist.
Motor carriers think of truck driver Hours of Service as reducing industry productivity.
According to the recent 2015 ATA Truck Driver shortage report:
“Reductions in productivity exacerbate the driver shortage as it requires more trucks, and thus more drivers, to move the same amount of freight.”
Drivers look at regulations as reducing their wages, especially when they are fighting a 14 hour clock, ELD’s, speed limiters and unpaid work, including detention time. Just as companies are concerned about their bottom line and productivity in regards to HOS regulations, the drivers are also concerned about their productivity, in other words their cpm wages. As long as drivers are paid CPM this will always be the case.
- Entering Drivers – Because of the internet and Social Media, those entering the industry are aware of the low wages, lack of respect and health problems related to trucking. In the past, the inflated ads worked, but for today’s tech-savvy generation, they no longer do. Again, the sacrifice of being away for extended periods of time does not appeal to many, especially when their initial take home will be less than $500.00 per week and the opportunity to earn much more will be slow-coming. When they calculate their hours with their take home pay, most often it is below minimum wage.
Solutions for Ending the Driver Shortage
- Driver Solutions
Higher wages -Paid personal days and vacation and more respect. Wages must represent an acceptable living wage and equal to the sacrifice of the job. Being Paid for ALL time working. Preferably a salary.
More At-Home Time
Driver Image – Drivers want to regain the honorable driver image of the past because they want more respect and higher wages. Hire those who have a high self worth and self esteem. This will be achieved when driver wages are increased.
CDL Industry Training Standards – Promote motivated and highly trained competent drivers into the industry. This will be achieved by quality training. This is another topic which deserves more discussion later.
Better treatment – By all aspects of the supply chain, including: trucking companies, shippers, receivers and brokers.
- Industry Solutions
Raise Wages – Unfortunately, what is classified as a significant raise, even at a 15% increase, only represents a .06 CPM raise and still does nothing to compensate for being paid for ALL work or time on the job.
More At-Home Time – Potential drivers are often hesitant to take a job that requires so much time away from home, especially at the beginning of the new vocation.
Driver Image – The Trucking Industry wants to improve Driver Image to attract more people into the industry as well, but many veteran drivers believe this is only for giving the illusion of a well paying and respected job and to draw from the younger generation who today, are showing no signs of interest.
Lower Driving Age – Interstate driving currently has an age minimum of 21. The 18-20 year old segment has the highest rate of unemployment of any age group, yet this is an entire segment that the industry cannot access with the exception of local routes, which is generally reserved for seniority. This could prove to be a dangerous choice as the industry looks to those recently receiving a license with little life experience and allowed to drive an 80, 000 pound vehicle safely. This would once again create another new driver industry churn as years ago as it would continue the industry’s business model of bringing them in at low wages, move the freight cheap, and when they leave, just replace them.
Hiring Military – I am all for hiring our military vets as long as the industry does not exploit them using the same business model as encouraging them to get more miles through an underpaid, unfair, and unsafe CPM only wage model.
Better Treatment by the Supply Chain – Compounding the already difficult lifestyle, drivers often complain of mistreatment at shipping and receiving facilities. Complaints range from restricting access to restrooms to having to wait extended periods of time before the trailer is loaded or unloaded. Improving the experience for drivers at drop-off and pickup locations would provide for a more attractive career choice. All companies in the supply chain, including trucking companies, shippers, receivers and brokers must treat drivers with the respect that they deserve.
Conclusion – Make no mistake: carriers fully understand that the combination of being paid CPM while being compliant with HOS, ELD’s, Speed limiters, etc., while combined with hours of non-paid waiting time and hours of work while not driving and not being paid will reduce the drivers paycheck.
Carriers also realize that drivers are at risk for being unsafe as they try to get as many miles as they can to increase their paycheck. They also understand that drivers contend with HOS, additional anticipated regulations that by the way, are supported by ATA such as ELD’s and Speed Limiters, as well as weather, delays, and many other unpreventable factors which can interfere with the 14-hour clock, forcing many drivers to operate in an unsafe manner.
Carriers also fully understand that driver perform hours of unpaid work and unpaid waiting time. They know drivers are not happy and are leaving because of the uncompensated lifestyle. They know that the word is out that drivers are not making enough money so new drivers are not entering the industry.
The industry claims there are not enough drivers, but it is more accurate to say that there is not an abundance of drivers. Yet, SIGNIFICANT wage increases which would include being “paid for all time” are not being considered as a solution. Why? Motor carriers claim that they cannot afford it as freight rates do not allow it.
Easy Fix – Consider driver wages as part of the formula for profit and allow rates to rise.
After all, the industry created cheap rates years ago by hiring new drivers at low wages and then churning them out. Just reverse the concept and remedy the problem. Allowing freight rates to rise not only would allow for increased wages, but would then aid Owner Operators to also make higher profits.
Drivers paid by CPM, while their job is based on an hourly clock which includes work and wait time without piece production no longer makes sense in today’s age of trucking.
© 2015, Allen Smith. All rights reserved.