Business

Industrywide trucker shortage comes at a cost for companies, consumers

Companies spending more to get truck drivers on board

Riziki Ngolombe drives as part of his commercial driver’s license exam at the National American Driver Training Academy in Cedar Rapids on Thursday, June 14, 2018. Students from around the country learn to drive at the school before being hired to drive for Cedar Rapids-based CRST. (Rebecca F. Miller/The Gazette)
Riziki Ngolombe drives as part of his commercial driver’s license exam at the National American Driver Training Academy in Cedar Rapids on Thursday, June 14, 2018. Students from around the country learn to drive at the school before being hired to drive for Cedar Rapids-based CRST. (Rebecca F. Miller/The Gazette)
/

Economic growth and more goods ordered by consumers online have contributed to the heightened demand for truck drivers. Yet finding those drivers has come with a price for trucking companies and consumers alike.

Last year the American Trucking Association reported that in 2016, the industry was short roughly 36,500 drivers. By the end of 2017, the association estimated that number would surpass 50,000 — even as companies boost compensation to recruit more drivers.

“It’s a difficult job. It’s a tough job,” David Rusch, president and CEO of Cedar Rapids-based CRST International, said during a phone interview Wednesday. “We’ve always struggled as an industry attracting people into our industry. What’s transpired here in the last two to three years is really unprecedented. I’ve never seen anything quite like it.”

Companies have adjusted their strategies and spent more to recruit and retain drivers, hoping to make the job appear more attractive to anyone considering a career behind the wheel.

Why the shortage?

Retirement is among the factors at the root of the shortage as an already older population of workers exits the industry.

According to the American Trucking Association, the average age of over-the-road truckers is 49. The median age of the workforce in the United States, however, is 42.

In Kirkwood Community College’s four-week truck driver course, enrollment is largely students ages 30 to 55 who are transitioning into trucking as a second career, said Amy Lasack, senior director of corporate training at Kirkwood.

ARTICLE CONTINUES BELOW ADVERTISEMENT

In the past, employers wanted job candidates with two to three years of experience, Lasack said. But now about 10 to a dozen employers consistently work with Kirkwood to recruit students straight from the course.

Encouraging people to become truckers has been a challenge in part because of low unemployment.

CRST’s Rusch said the strength of the economy has created room for truckers to find career opportunities in other industries where the pay may be better and the lifestyle more desirable.

According to the Bureau of Labor Statistics, the national unemployment rate is at 3.8 percent. In Iowa, that rate is even lower, resting at 2.9 percent.

“It’s just kind of a bittersweet situation,” Rusch said. “Right now, the economy’s doing well. Freight’s strong. There are opportunities in our economy to grow, but the driver shortage that’s emerged as one of the biggest obstacles impacting our ability as an industry and as an economy to grow.”

It’s not a desirable job to have in terms of the working conditions, said Avery Vise, vice president of trucking research for FTR Transportation Intelligence. That’s part of what drives away potential candidates from considering being in the industry. Drivers are sleeping in trucks and are living away from home, eating and showering on the road.

“People tend to get into it because the pay seems pretty attractive for a semiskilled job, and it is. But what’s required of it is a lot,” Vise said.

Lasack said for that reason, it has been difficult to get students to enroll in Kirkwood’s truck driver course, which sees an average of six students in each class, offered 12 times each year.

“With unemployment being as low as it is, that not only affect employers,” she said. “It’s also difficult to get students in the class. … If you want a job as a truck driver and you take the class, you’re going to get a job as a truck driver.”

Industry regulations

ARTICLE CONTINUES BELOW ADVERTISEMENT

Thank you for signing up for our e-newsletter!

You should start receiving the e-newsletters within a couple days.

Regulations on trucking also have contributed to the shortage, some suggested, but they disagree to what extent.

A federal law enacted in 2017 requires drivers to use an Electronic Logging Device to track their hours worked, limiting drivers to driving no more than 11 hours a day within a 14-hour workday. The drivers are then required to be off-duty for 10 consecutive hours. Drivers previously logged their hours manually, meaning some may have inaccurately reported their hours.

The Cass Freight Index report from April 2018 said there were early signs the devices “initially hurt the capacity/utilization of truckers, especially small truckers, but those truckers most adversely (affected) are now beginning to get some of the loss in utilization back.”

Vise agreed that regulation had a productivity implication, as drivers could not squeeze an extra hour or two of work in, but the work that they used to do has to be made up somehow.

This increases the need for companies for more trucks and drivers, he said.

Jerry Rickels, owner of Special K Trucking in Iowa City, said the regulation can be a problem particularly when drivers are paid by the mile rather than being paid on salary.

“The money just isn’t there to entice guys to come into the profession,” he said, while considering the lifestyle differences trucking entails.

Rusch at CRST agreed that the regulation may have contributed to the shortage, though he said he does not believe that is even the largest contributing factor.

Another regulation also bars drivers under the age of 21 from crossing state lines, making it harder for people to consider becoming a trucker directly out of high school, Lasack said.

ARTICLE CONTINUES BELOW ADVERTISEMENT

As more individuals retire from trucking, Lasack said a younger generation needs to be encouraged to drive trucks.

“How do we get the next generation interested truck driving and keeping them interested in truck driving when there’s this big gap between their 18th and 21st birthdays?” she said.

Competition intensifies

Simply put, there are not enough truck drivers out there for all companies to fill their workforce.

“Everybody’s stealing everybody else’s drivers,” Rusch said.

Rusch said CRST’s spending has increased threefold on advertising, recruiting and training in the past decade. In 2017, he said CRST spent $38 million on those areas, whereas 10 or so years ago that number was $10 million.

Compensation also has been taken up to help with recruitment at CRST.

The company also increased pay on an annualized basis by about $25 million dollars, with a driver able to make between $40,000 to $60,000 in his or her first year after training — which Rusch said is up about $10,000 from a year or so ago.

Mary Kaye Nath, with human resources at King’s Material in Cedar Rapids, said the company has implemented incentives such as a referral program for drivers who encourage others to join the company. That has resulted in half the company’s recent hires.

The company also offers a cash incentive for safe driving.

Even so, Nath said the benefits may not be enticing enough to draw people into the industry.

“You can’t make somebody come work for you,” Nath said. “You can spell out the benefits. You can spell out the safety programs.”

economy at risk

The driver shortage has implications for the economy as a whole that have people in the industry concerned.

The American Trucking Association reports the driver shortage is problematic for the entire U.S. supply chain as 70.6 percent “of all freight tonnage is moved on the nation’s highways.”

ARTICLE CONTINUES BELOW ADVERTISEMENT

“We are forced to downsize our truck fleet if we do not have enough drivers to man them,” Rusch explained in an email, noting CRST’s actual number of trucks on the road are down 4 percent from a year ago.

“We’re turning down literally hundreds of loads a day in our eight operating companies that our customers are asking us to handle and because of the inability to grow our fleets and the inability to attract drivers,” he said.

And Rusch said this time of year isn’t even the traditional heavy freight market. It usually picks up in the second half, particularly in the fourth quarter during the holiday season.

“There is a fear that there’s going to be major freight bottlenecks — an inability to move freight — as we get into the second half,” he said.

The Institute for Supply Management reported the backlog of nonmanufacturturing goods grew 8.5 percent from April to May, and 1.5 percent for manufacturing goods.

On the consumers’ end, in addition to slower delivery, essentially any product delivered by a truck will see higher prices rise as a result of higher transportation costs.

Given how many goods come into contact with a truck driver on the way to consumers, Lasack said the economy is dependent on addressing the shortage.

“Everything that’s in your house or your office is brought to you by a truck driver,” Kirkwood’s Lasack said. “Our economy really more so now than ever is really dependent on truck drivers. Everything will come to a standstill if we don’t fulfill the need.”

The Washington Post contributed to this article.

l Comments: (319) 398-8332; marissa.payne@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.