Posts Tagged “driver shortage”

Keeping It Fresh: The Truck Driver Shortage

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By Harry Balam, ALC Los Angeles

One of the biggest problems the transportation industry is faced with is a truck driver shortage. I have been in this industry for 16 years and this is, by far, the worst I’ve seen it. However, one can argue that this isn’t a new problem. In fact, analysts and industry groups have warned of truck driver shortages for years.

 Those of us in the industry have been aware of this problem for a while and have struggled to find drivers to cover loads. But the truck driver shortage has hit the average American much closer to home in the last few years. Empty store shelves caused by pandemic supply chain disruptions are just bringing this ever-growing problem to light and gaining the attention of the American people and lawmakers. No toilet paper = unhappy Americans.

According to the American Trucking Association, the truck driver shortage is currently at 80,000 and could climb to 160,000 by 2030. 
It has been argued that the truck driver shortage isn’t exactly a shortage. “It’s a recruitment and retention problem,” said Michael Belzer, a trucking industry expert at Wayne State University.

In the U.S., “there are in fact, millions of truck drivers – people who have commercial driver’s licenses – who are not driving trucks and are not using those commercial driving licenses, more than we would even need,” Belzer said. He argues that it is because people have been initially recruited to the job and maybe even trained and then realize that the job is not for them. 
So then, the problem lies in not just how to keep current drivers actively driving, but also, how to recruit new drivers.

One idea is to help pave the way for drivers under 21 years old to enter interstate trucking. I know…sounds scary, right? I’m currently trying to wrap my head around trying to teach my teenage son how to drive. The thought of teen drivers on the interstate pulling an 80,000 pound machine is more than a little alarming. But, the more I read about it, the more I feel like it could be an avenue worth pursuing.

President Biden signed a $1.2 trillion bipartisan infrastructure package into law last November. There is a lot included in that hefty price tag, one of which is the bipartisan DRIVE-Safe Act. The DRIVE-Safe Act focuses on one of the biggest obstacles to recruiting younger drivers, the requirement that they are at least 21 years old to drive in interstate commerce. One can obtain a commercial driver’s license at 18 but federal law has prevented them from crossing state lines.

“The DRIVE-Safe Act addresses our industry’s largest challenge by creating an apprenticeship program that will help train the next generation of safe, skilled drivers,” said Dan Van Alstine, who serves on the board of the ATA. The Act recognizes the fact that teen drivers have higher rates of auto accidents so it included added safety and training standards for newly qualified and current drivers. The new drivers must complete at least 400 hours of on-duty time and 240 hours of driving time in the cab with an experienced driver.

 Also, every driver will be required to train on trucks equipped with new safety technology including active braking collision mitigation systems, video event capture, and a speed governor of 65 miles per hour or less and automated manual transmissions.

Also aimed at helping the retention and recruitment problem and is a new proposal to create a new refundable tax credit for truckers. On April 1, Reps. Mike Gallagher (R-WI) and Abigail Spanberger (D-VA) introduced a bipartisan bill that would create a tax credit just for truck drivers as a way to attract and retain more drivers in the industry. The Strengthening Supply Chains Through Truck Driver Incentives Act would create a new refundable tax credit of up to $7,500 for truck drivers holding a valid Class A CDL who drive at least 1,900 hours in the year. This tax credit would last for two years (2022 and 2023). It would also create a new refundable tax credit of up to $10,000 for new truck drivers or individuals enrolled in a registered trucking apprenticeship.

It is too early to know the future of this very newly proposed bill, but one thing is for certain – something needs to change. Just because things have been done a certain way for decades doesn’t mean we should keep doing it that way. Change brings opportunity. Like John F. Kennedy said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.”


Harry Balam attended Los Angeles Mission College and began working as a transportation broker in the dry division for ALC in 2006. After two years he moved to the refrigerated division. He currently works as an operations supervisor in the ALC Los Angeles office.

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Trucking Industry is Looking Abroad for More Drivers

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The U.S. trucker shortage has become so severe companies are trying to recruit drivers from abroad more than ever.

The American Journal of Transportation reports the country has been struggling with a chronic lack of drivers for years, but the shortage reached crisis levels due to the pandemic.

Covid-19 simultaneously sent demand for shipped goods soaring while touching off a surge in early retirements.

Filling stations are facing gasoline outages, airports are short on jet fuel and lumber prices hit records with some suppliers partly blaming delivery delays.

Trucking has emerged as one of the most acute bottlenecks in the supply chain that has been hit quite hard amid the pandemic.

“We’re living through the worst driver shortage that we’ve seen in recent history, by far,” Jose Gomez-Urquiza, the chief executive officer of Visa Solutions told ajot.

As a result, demand for Visa Solutions’ services from the trucking industry has more than doubled since before the pandemic, and “this is 100% because of the driver shortage,” he said.

In July, a roundtable meeting was held with the trucking industry to discuss efforts to improve driver retention and reduce turnover.

Among the measures the industry is seeking is lowering the minimum age to 18 from 21 for interstate drivers and adding trucking to the list of industries that can bypass some of the Department of Labor’s immigration certification process.

Last year’s lockdowns also made it harder for new drivers to access commercial-trucking schools and get licensed.

Companies have offered higher wages, signing bonuses and increased benefits however, their efforts haven’t done enough to attract domestic workers to the industry.

In 2019, the U.S. was already short 60,000 drivers, according to the American Trucking Associations and that number is anticipated to swell to 100,000 by 2023, according to Bob Costello, chief economist Petroleum Marketing Group.

He also pointed out that there’s also a capacity shortage, or an unusually small number of trucks on the road, at the same time that demand has surged, he said.

“Even if there were drivers, there is a finite number of trucks at any moment in time, so you have two issues happening at once,” Fuller said.

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Truckers Avoiding Some Retail Chains Who are Slow at Loading, Unloading Docks

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Electronic logging device regulations have resulted in truckers being more selective with which shippers and receivers they  work.

For example, Zipline Logistics of Columbus, OH has surveyed over 150 trucking companies asking how their business has changed following the ELD mandate.  A significant 54 percent report they no longer spend as much time waiting to load or unload their truck, while 80 percent note there are shippers or receivers they refuse to go to because wait times are too long.

The Zipline report stated one respondent commented, “Locations that are known to have little to no regard for a driver’s (hours of service) are no longer serviceable.”

Another company reported it monitors load and unload times so it can avoid going to places with unreasonably long loading and unloading delays.

“Anyone that can’t unload or load on time, why go to them and waste hours?” one respondent wrote. “Time is money now.”

Over 90 percent of the companies with which Zipline works service grocery and retail facilities, and some of them named major retailers and wholesalers among the worst offenders.

“A select population of drivers are now unwilling to go into locations such as Kroger, C&S Wholesale and (United Natural Foods) because of debilitating wait times,” Zipline wrote in its report. “If this issue is to be solved, shippers and retailers will need to improve their speed of operations and better cater to the needs of truckers.”

Walmart, Supervalu, Dollar General, Aldi, Wakefern Corp., Safeway and Meijer were also mentioned in comments by survey respondents.

The Zipline report stated trucking companies were divided 60-40 on whether the ELD mandate improved safety.

Some reported that it forced drivers to stop, rest and follow hours-of-service requirements, but other companies reported drivers were speeding more, driving in inclement weather, and driving while tired to maximize their hours.

Companies pointed to the driver shortage, rather than the mandate itself, as the main cause of rising rates. However, there were a few comments about drivers leaving the industry so as not to have to deal with the new regulations. Still, most companies pegged the mandate as a contributor to higher rates rather than the main cause of them.

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USDA Report Says Higher Produce Trucking Rates May Lead to Closer Look at Rails

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A349Following a number of years where intermodal and rail shipments of fresh produce have been down, some observers think volume will be increasing at the expense of trucking.

Rising fuel prices and increasing truck rates should make refrigerated shipments by intermodal and rail more competitive, according to a new USDA report.

The first quarter 2018 edition of the USDA’s Agricultural Refrigerated Truck Quarterly, issued in July, reported 2017 investments in refrigerated facilities and technology have increased the long-haul capacity for shipping fresh fruits and vegetables by intermodal and rail.

“Furthermore, increasing fuel costs and a driver shortage for trucks may further increase demand for shipping fresh produce by intermodal and rail,” the publication said.

Rising fuel rates figure to make intermodal and rail more competitive. Diesel prices rose from $2.47 per gallon at the end of 2016 to $2.87 per gallon by the end of 2017. On July 23, the U.S. Energy Information Administration reported the average price for a gallon of on-highway diesel in the U.S. was $3.22 a gallon.

The publication cited Tiger Cool Express who feels rising diesel prices make trucks a less competitive option to intermodal and rail since diesel fuel makes up a higher percentage of the variable costs associated with truck operating costs.

Diesel fuel averaged close to $4 per gallon in 2012, the USDA said, which was the peak year for shipments by intermodal and rail.

Later fuel price declines led to decline in intermodal and rail shipments of fruits and vegetables.

Now rising fuel prices could be good news for intermodal and rail, the USDA said.

In addition, strong economic growth in 2017 increased demand for shipments by truck, putting upward pressure on truck rates while decreasing capacity.

2017 availability ranged from adequate to shortage conditions, which potentially will cause some shippers to consider seeking shipments of fresh produce via intermodal or rail, the USDA said.

The USDA said that since 2012, the overall trend for intermodal and rail shipments of fresh fruit and vegetables has been decreasing for shipments originating in California and the Pacific Northwest, registering a 42 percent decrease between 2012 and 2017.

Combined rail and intermodal shipments decreased from 1.6 million tons in 2012 to 937,265 tons in 2017. Between 2016 and 2017, rail shipments decreased 22,055 tons and intermodal shipments decreased 3,230 tons.

The report said the 2014 demise of Cold Train — a major provider of refrigerated railcar service through its partnership with BNSF Railway — cut the availability of intermodal and rail service for fresh produce.

Still, the USDA said the January 2017 announcement by Union Pacific that it had acquired Railex LLC’s refrigerated railcar and cold storage distribution facilities in Delano, CA, Wallula, WA, and Rotterdam, N.Y. could signal more volume for that service.

The report noted that Union Pacific said it would increase the frequency from 3 to 5 days per week for Cold Connect on east-bound departures from California and Washington.

In 2017, the USDA reported intermodal shipments of iceberg and romaine lettuce increased from the previous year. Reported shipments increased 24 percent (10,125 tons) for iceberg lettuce and 28 percent (7,280) for romaine lettuce. On the other hand, shipments of lemons decreased 50 percent (112,230 tons).

Reported rail shipments increased 5 percent (8,925 tons) for potatoes in 2017.

While trucks will always be the most economical option for some shippers, the report said improvements in the refrigerated supply chain for intermodal and rail could make it a more attractive option, particularly for long-haul routes.

“Even if shipments by rail typically take several days longer than by truck, shippers may be willing to trade time for capacity and lower costs if the truck capacity crunch and rising diesel prices persist,” according to the report.

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Independent Trucker Earnings Up; Trucks Hauling 70% of Freight

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ATA1The trucking industry brought in $700.4 billion in revenue in 2014, according to a report released this week by the American Trucking Associations. That’s the highest total revenue in history for the industry and the first time trucking has surpassed the $700 billion mark, ATA says.

The combination of a significant jump in freight volume in the year and tightening capacity spurred the revenue uptick, says ATA Chief Economist Bob Costello.

ATA’s report,its annual American Trucking Trends, also showed the trucking industry moved 68.8 percent of all domestic freight, or 9.96 billion tons, in 2014.

And the $700.4 billion in revenue accounted for 80.3 percent of all freight transporation spending, ATA says.

Owner Operators/Independents

Owner-operators, led by independents and flatbedders, had a record year for net income, according to averages from ATBS, the nation’s largest owner-operator financial services provider. Leased operators and independents together cleared an average $56,167 during 2014. That’s 7 percent above the 2013 average, $52,406. Strong freight demand, a driver shortage and plunging diesel prices contributed to the increase.

The 2014 total “is $2,000 higher than we predicted and most of it comes from the fourth quarter fuel cost reduction,” says Todd Amen, ATBS president and CEO. “All segments had a really good year.” Net income for independents and flatbedders topped $60,000. Independents’ income showed the biggest gain over the year, 8.7 percent. Flatbed haulers, however, experienced virtually no change in income in 2014. That reflects flatbedders experiencing stronger demand and rates a few years before dry van and reefers haulers, says Gordon Klemp, head of the National Transportation Institute. NTI’s National Survey of Driver Wages tracks compensation of drivers at medium-size and large fleets. “Most of the independent contractors operating in the independent and flat markets are on percent of load type programs, so their pay adjusts quicker,” Amen says. “The independents are certainly more in the spot market as well.  So these two segments reflect a really good freight market last year. They have higher highs in good times and lower lows in bad times, more volatile than the other segments.”

2014, net income for the groups tracked by ATBS was:

  • Independents: $60,157
  • Dry van: $54,490
  • Flatbed: $60,510
  • Reefer: $52,064

Klemp says falling fuel prices helped owner-operator earnings in two ways. One is owner-operators receiving less than a 100 percent fuel surcharge pass-through have seen their share of fuel costs dropping proportionately. The other is that because surcharges are adjusted weekly after the U.S. Department of Energy releases its average fuel prices, a surcharge will overcompensate an owner-operator as long as prices continue to fall during the week.

Sign-on bonuses have been stable in recent months, Klemp says. The mid-point is $3,000 to $6,000, with the top tier $6,500 or more. Team bonuses remain very strong, and he has seen them as high as $15,000. Many fleets use bonuses selectively by region, to meet demand, and often keep high bonuses in place only briefly.

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Some Solutions to the Worsening Driver Shortage

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Robert Lawton+1According to the American Trucking Associations (ATA) our industry currently needs another 30,000 qualified drivers.  The number is expected to rise to 200,000, over the next 10 years.  Drivers are getting old.  The average age for -hire is about 49; about 55 for less-than-truckload drivers (LTL) and private carriers.  Average turnover rate is 115-120%.

Hauling more than 70% of all freight in the US, trucking is a vital component to economic growth of the country.  But there is not enough capacity to handle the anticipated growth.  The result is that everything slows down.

Being away from home for long stretches is a major drawback to attracting recruits to drive trucks.  The age requirement, restrictive regulations and demanding work schedules are further deterrents.

Des Moines Truck Brokers (DMTB) President Jimmy DeMatteis pointed out that “The driver pool is being pinched from both ends.  Baby boomer drivers are retiring.  But we have also lost young people who elected to go into the work force right out of high school.  They used to be allowed to drive interstate at the age of 18.  Now that age has been raised to 21.

“By the time they are in the labor market for three years, young adults can be well on their way to a career in construction, retail or service.  They are not interested in starting all over again from the bottom as a brand new truck driver.  Raising the age limit has been a major blow to driver recruitment.”

There is a move afoot to convince insurance companies to create training standards that would allow young drivers behind the wheel.  DeMatteis notes, “At the age of 18, they are allowed to go into combat and fly a plane and drive a car.  With the proper training, they should also be able to drive a truck.”

Driver pay must be increased if the capacity shortage is to be addressed.  In real dollars, drivers today earn less than they made in 1990.

Solving the driver shortage will undoubtedly cause an increase in the cost of shipping.  It will also take innovation and a dose of reality as shippers and carriers face the problem head-on, in 2015.

Reprinted with permission from  the 2015 February issue of Dashboard, which is published by Des Moines Truck Brokers.

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Produce by Rail Showing Mixed Results as Trucks Still Haul 95% of Products

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DSCN4370Cold Train Express Intermodal Service suspended service this summer due to rail congestion, while two new refrigerated rail services were just getting started.

McKay TransCold based in Minneapolis began last June offering a refrigerated, dedicated boxcar unit train known as Transcold Express, which runs each week between Selma, CA and  Wilmington, IL.   Meanwhile, Tiger Cool Express LLC, Overland Park, KS  launched intermodal services from multiple locations in southern California to destinations in the Midwest and East Coast in February.  In a press release Cold Train reported that on-time deliveries for shipments on BNSF’s Northern Corridor fell from more than 90% in November to less than 5% in April due to surging more oil and coal shipments.

Meanwhile,  the problems on BNSF’s northern lines reportedly  has had little effect on the southern BNSF and Union Pacific rail routes.

Tiger Cool Express, reported rail shipments of oil from North Dakota on BNSF’s Northern Corridor have increased from 20,000 tank cars three years ago to more than 400,000 this year.  And unlike major southern rail routes in the U.S., that northern route doesn’t have two different tracks.

Produce is viewed by some in the rail industry as the last long-haul, $100 billion market that intermodal has yet to penetrate.    Still, over 95 percent  of fresh produce is delivered by truck in the U.S..   Rail officials are counting on trucks supplies tightening, with the driver shortage continue to worsen.


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