Freight industry struggles to find workforce, businesses in Iowa see mixed results

Trucks, trains and planes need workers to keep products moving

A brakeman walks back to the engines after setting out rail cars from an Iowa Northern Railway Company train at the Unio
A brakeman walks back to the engines after setting out rail cars from an Iowa Northern Railway Company train at the Union Pacific yard in Cedar Rapids in 2012. (Cliff Jette/The Gazette)

CEDAR RAPIDS — Whether it’s by truck, train or plane, a growing demand to get products from companies to consumers — driven largely by an online shopping economy — has several sectors in the freight industry struggling to find a workforce to move goods.

A strong economy spells good business for companies shipping products, but a low unemployment rate — which fell below 4 percent nationwide last month, according to the U.S. Bureau of Labor Statistics — makes for a small labor pool to draw from.

This combination forces transportation companies to turn to hiring incentives and pay increases to attract and retain enough truck drivers, train operators and freight pilots.

“When you have disposable income, you’re spending more money, which is great for the economy, and for us it’s great because we move those types of commodities. So we are seeing increased traffic,” said Kristen South, Union Pacific Railroad director of corporate communications.

“But on the other side, you have a tight labor market, so how do we stand out and attract high quality candidates? And that’s where we’re at.”


The growing demand for e-commerce products, expedited deliveries and two-day shipping, freight companies struggle to keep up with online purchases.

South said Union Pacific employs about 1,500 Iowans, including engineers, mechanics, track laborers, yard workers and bridge inspectors.

Nationwide, the company employs about 42,000 people and is seeking to add 2,100 new workers this year, she added.


Meanwhile, the Cedar Rapids and Iowa City Railway Company, or CRANDIC — which moves commodities such as grains, coal and corn byproducts — has seen its freight traffic remain much more stable, said Jeff Woods, CRANDIC director of business development and marking.

“We tend not to see the big dips and peaks — it’s more little waves,” Woods said.

In addition to rail companies, the trucking industry has for years been trying to address a mounting driver shortage.

A 2017 American Trucking Associations truck-driver analysis found that the nation’s trucking industry was short about 36,500 drivers in 2016.

The truck driver deficit is expected to reach more than 174,000 by 2026, according to the study.

What’s more, the nation’s airline industry — which transports both people and freight — is expected to be short about 5,000 pilots by 2021, which will keep about 500 aircraft out of the skies, according to Eastern Iowa Airport officials. By 2026 the shortage is forecast to reach 15,000 pilots and about 1,500 grounded planes.

According Boeing’s pilot and technician outlook for 2018 to 2037, the global demand for new pilots will reach 790,000 over the next 20 years.


To fill roughly 2,100 train crew positions, Union Pacific is offering as much as $10,000 to $20,000 in hiring incentives to attract new employees. The company began offering incentives in June.

“That just speaks to how much we are trying to stand out and attract some great employees,” South said.


After two years, which includes on-the-job training, train crew employees can make a median wage of $83,000, South added.

For Iowa, incentives only are available in communities where more workers are needed, which includes Boone, Clinton, Des Moines and Council Bluffs, South said.

“That’s where the need is,” South said.

Such bonuses are not available in the Cedar Rapids area.

CRANDIC’s Woods also spoke to a strong workforce locally. The company operates 94 miles of track in four counties and employs about 100 people, he said.

“There’s a good labor pool available here in the Corridor,” he said.

In the trucking industry, the driver shortage has forced many companies to raise their wages.

For CRST Expedited, which employs about 3,500 drivers and deals largely in e-commerce products and small packages, the company increased driver pay in January and June of this year, said Cameron Holzer, president of CRST Expedited.

However, simply raising driver pay isn’t enough, Holzer added, noting that the shortage has created a somewhat volatile market as competitors try to poach employees from each other.

“A lot of companies are pilfering from each other, they’re raising their rates and trying to steal each other’s (Commercial Drivers License) holders,” Holzer said.

Holzer said his approach has been to bring more drivers into the market.

To do that, CRST — which offers a CDL course — will cover the cost of training for prospective drivers in exchange for at least 10 months of service after receiving their license.

A typical CDL course, which can be around four to six weeks long, can cost between $4,000 and $8,000, Holzer added.


“By absorbing that cost, we bring individuals into our fleet and we get them into the CDL process,” Holzer said. “We are investing a significant amount of funds to do that.”

Holzer said the CRST program sees between 7,400 and 7,800 annual students nationwide.

In addition to attracting new drivers, Holzer said it’s crucial to keep the workforce you have happy. CRST has been boosting internal resources offerings for drivers.

“For as many resources we’re throwing at hiring more people, we’re throwing equal resources at retaining our existing drivers,” Holzer said.

“Since we are upfronting that entire cost for the majority of individuals coming into our fleet, it is extremely expensive if they leave or they break that contract.”

As with truck drivers, pilots also are seeing raises. According to the Regional Airline Association, average pay for a first officer pilot climbed more than 150 percent between 2014 and 2016.

The Eastern Iowa Airport, for example, has seen its share of the state’s cargo carrier landed weight — the measurement of cargo landing at the airport — increase from less than 30 percent of the state total in 2008 to nearly 45 percent last year.

In the same span, the Des Moines International Airport has gone from about 71 percent of the state’s total cargo carrier landed weight in 2008 to about 56 percent last year.

This year, the Cedar Rapids airport could be handling nearly 50 percent of the state’s cargo flights, Airport Director Marty Lenss said Wednesday.


“I think it really speaks to the changing economy, moving more into that e-commerce economy,” Lenss said.

He added that growth already has forced the ongoing terminal modernization project and updates to freight configurations are being discussed now.

“We call it growing pains. They’re certainly good problems to have,” he said.

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