The Truck Driver Shortage Doesn’t Exist. Saying There Is One Makes Conditions Worse for Drivers
Alana Semuels
Fri, November 12, 2021,
Truck Drivers Support the Supply Chain
A trucker washes his windshield as he fuels up his truck at the Loves Truck stop on November 5, 2021 in Springville, Utah.
Alana Semuels
Fri, November 12, 2021,
Truck Drivers Support the Supply Chain
A trucker washes his windshield as he fuels up his truck at the Loves Truck stop on November 5, 2021 in Springville, Utah.
Credit - George Frey / Getty Images
As the U.S. contends with supply-chain problems that could make holiday shopping harder, one explanation comes up again and again: The country doesn’t have enough truckers. “The Biggest Kink in America’s Supply Chain: Not Enough Truckers,” a New York Times story read this week. Where Are All the Truck Drivers? Shortage Adds to Delivery Delays, cried a Wall Street Journal headline the week before.
In reality, there is no shortage of people who want to get into truck driving, nor is there a shortage of people who have obtained commercial driving licenses (CDLs).
The stories inevitably cite a report from the American Trucking Association that says the industry is short 80,000 drivers and quote experts who blame the alleged shortage on a lack of people interested in these difficult jobs. Yet, in California alone, there are 640,445 people who hold active Class A and Class B commercial driver’s licenses, according to the Department of Motor Vehicles. Meanwhile there are only 140,000 “truck transportation” jobs in the state, according to the state Employment Development Department.
Those numbers speak to the fact that there are hundreds of thousands of people who become truck drivers every year—some with their training subsidized by the government—only to find that the job pays much less than they’d been led to believe, and that working conditions in the industry are terrible.
As the U.S. contends with supply-chain problems that could make holiday shopping harder, one explanation comes up again and again: The country doesn’t have enough truckers. “The Biggest Kink in America’s Supply Chain: Not Enough Truckers,” a New York Times story read this week. Where Are All the Truck Drivers? Shortage Adds to Delivery Delays, cried a Wall Street Journal headline the week before.
In reality, there is no shortage of people who want to get into truck driving, nor is there a shortage of people who have obtained commercial driving licenses (CDLs).
The stories inevitably cite a report from the American Trucking Association that says the industry is short 80,000 drivers and quote experts who blame the alleged shortage on a lack of people interested in these difficult jobs. Yet, in California alone, there are 640,445 people who hold active Class A and Class B commercial driver’s licenses, according to the Department of Motor Vehicles. Meanwhile there are only 140,000 “truck transportation” jobs in the state, according to the state Employment Development Department.
Those numbers speak to the fact that there are hundreds of thousands of people who become truck drivers every year—some with their training subsidized by the government—only to find that the job pays much less than they’d been led to believe, and that working conditions in the industry are terrible.
A Problem of Too Many Truckers
There’s no trucker shortage; there’s a trucker retention problem created by the poor conditions that sprung up in the industry in the wake of 1980s deregulation. Turnover for truck drivers in fleets with more than $30 million of annual revenue was 92% at the end of 2020, meaning roughly 9 out of every 10 drivers will no longer be working for that company in a year.
“There’s no shortage of workers, that’s the narrative that gets propagated by industry leaders,” says Mike Chavez, the executive director of the Inland Empire Labor Institute, which is working on a partnership to create better recruiting and retention programs for drivers. “We still have a lot of positions that can’t be filled because of the working conditions.”
There were 1.5 million people employed in trucking last month, according to the Bureau of Labor Statistics, just 1% fewer than in October 2019, and 15% more than a decade ago. That’s a faster growth rate than overall nonfarm employment, which is still down 2% from October 2019 and up only 12% from a decade ago.
In fact, there are so many truck drivers right now that brokers are able to pit them against each other and worsen conditions, says Sunny Grewal, a Fresno, Calif.-based driver. Grewal, 32, has been driving since 2010, and has a refrigerated truck, which he uses to haul fruits and vegetables. It costs him $1.75 to $2 to drive a mile empty, so any job that pays less than $3 a mile isn’t worth it, he says. Yet as brokers see more drivers looking for jobs, they post more loads that pay less and end up requiring a lot of unpaid waiting around. “If they know there are a lot of carriers, they treat you like crap,” Grewal says.
He’s recently gotten jobs hauling loads of produce, only to arrive and be told the produce hasn’t even been picked from the field. He has to wait until it’s picked and packaged, and doesn’t get paid for the first four hours he waits. There have been times when he’s waited 27 hours to pick up a load. Truckers get paid per mile driven, so all that waiting means lost money, especially since federal regulations stipulate that he can only drive 11 hours out of every 24. He only gets paid $150 for a “layover day,” which is a day spent waiting. He can’t tell brokers he doesn’t want to wait around, because they’ll find someone who will take the load, especially because rates are high right now.
“If I refuse it, someone else will take it,” he told me.
There are other frustrations—even when he has to wait for hours outside warehouses, he’s not allowed to use their bathrooms, and he can’t leave or he’ll lose his place in line. Government regulations mandate that he takes a break every 14 hours (and can drive 11 of those 14 hours), there aren’t enough places where he’s allowed to park his truck and sleep. Truckers across the country have long complained that the lack of truck parking creates unsafe conditions; Grewal shudders when he hears stories of truck drivers killed while at remote locations.
Deregulation Changed Everything
It’s hard to imagine another profession where people don’t get paid for hours they spend at work—unless it’s gig economy jobs where Uber drivers don’t get paid for the time they spend waiting for a passenger to order a car. Some of the problems in trucking arose because the job essentially went from a steady, well-paid job to gig work after the deregulation of the trucking industry in the 1980s, says Steve Viscelli, a sociologist at the University of Pennsylvania and the author of the book The Big Rig: Trucking and the Decline of the American Dream.
Deregulation essentially changed trucking from a system where a few companies had licenses to take freight on certain routes for certain rates into a system where just about anyone with a motor-carrier authority could move anything anywhere, for whatever the market would pay. As more carriers got into trucking post-deregulation, union rates fell, as did wages. Total employee compensation fell 44% in over-the-road trucking between 1977 and 1987, he says. Today, drivers get paid about 40% less than they did in the late 1970s, Viscelli says, but are twice as productive as they were then.
Now that truck drivers are gig workers, the inefficiencies of the supply chain are making the jobs worse and worse, as Grewal has discovered. “So much of this is about the inefficient use of time. Is there a shortage of truck drivers? Probably not. But they are certainly being used less and less efficiently,” Viscelli says. “That’s the long term consequence of not pricing their time.”
Ironically, the louder the narrative becomes about the “shortage” of truck drivers, the more resources pop up to funnel people into driving. In 1990, the trucking industry figured it needed about 450,000 new drivers and warned of a shortage; in 2018, before the pandemic, the industry said it was short 60,800 drivers.
During the pandemic, government money paid for even more people to attend truck driving school. California paid $11.7 million to truck driving schools in the state in 2020, up from just $2.4 million in 2019, primarily from federal money through the Workforce Innovation and Opportunity Act. The recently-passed infrastructure bill includes initiatives to grow the trucking workforce, including creating an apprenticeship program for drivers under 21 to work in interstate commerce. But the vast majority of the people who pay for truck driving school don’t end up becoming truck drivers.
“Every Monday, they’ve got 100 new people they’re going to put through orientation, and in three months, less than half of them will be in the industry,” says Desiree Wood, the president of REAL Women in Trucking, a network that provides resources and support to female drivers.
Driving Up Debt
Many people take out debt to get a CDL, or enter into what Viscelli calls “debt peonage”—essentially going to school tuition-free but promising to work for a certain trucking company to pay off their debt. But getting your CDL is just the first step, says Wood. After you get your CDL, most drivers have to get further training, where they team up with another driver and learn how to drive and maneuver a truck, by actually doing it on the road. These other drivers are often not specialized trainers—sometimes they only have a little more experience than the newbie driver. This model is especially detrimental to women, many of whom have filed complaints about being sexually assaulted by their partners, who are responsible for determining whether they get the final okay to drive. Long-haul trucking company CRST settled a lawsuit in May brought by a woman who says she was raped by the lead driver, terminated, and then billed $9,000 for her training.
It’s during this stage that many people drop out, either because their trainers aren’t helpful, or they get intimidated by ice on the road, or because they’re not making much money as a team driver. But long-haul trucking companies move a lot of their freight through student-driver partnerships like these. When student drivers quit, the companies just has more trainees to sub in, fed into the industry by the myth of a trucker shortage. “Over-recruiting is the biggest part of the problem,” says Wood.
Blaming supply chain problems on trucker shortages enables trucking companies to recruit more people and charge them for school, only for the students to realize that trucking, as it exists today, is not a desirable profession.
“We need to find ways to attract, recruit and retain drivers,” said Gene Seroka, executive director of the Port of Los Angeles, on a call about supply chain backlogs last month. “ We’re gonna have to think about new compensation models, benefits packages, etcetera. We want to make this a profession that folks want to come to.”
A Summit Trucking LLC advertisment hangs inside a school for students who are earning their commercial driver's license (CDL) at Truck America Training of Kentucky.
Luke Sharrett / Bloomberg via Getty Images
Truck driving companies that pay workers well have much fewer problems with retention. Turnover at “less-than-truckload” fleets, where drivers can make $100,000 a year moving loads to local terminals where they are picked up by long-haul truckers, was just 14% in the same period that the overall industry experienced 92% turnover. Many of these drivers are unionized, Viscelli says, and work jobs similar to the ones they would have had before deregulation.
Of course, it’s not easy for trucking companies to just pay drivers more. If they tell a major retailer like Walmart that they’re raising the cost to haul a load, Walmart will only find a trucking company that can do it for cheaper. And trucking companies are dealing with many of the hardships of the supply chain backlog—they told me that they can’t get appointments to pick up or drop off containers at the ports of Los Angeles or Long Beach. Any increase in costs will be charged to the cargo owners whose stuff they are hauling—and likely passed onto consumers.
California’s landmark AB5, which would reclassify truck drivers from independent contractors to employees could force the system to become more efficient. The Supreme Court is currently deciding whether to hear a challenge to the law, which was vehemently opposed by truck driving companies.
In the meantime, says Grewal, there’s another way in which the supply chain shortages are making it harder to be a truck driver. The price of trucks has skyrocketed. He’s seen refrigerated trailers like his go for $100,000, 30% more than a year ago; dry vans—semi trailers enclosed from outside elements—have doubled in price, from $35,000 to $70,000. That means many would-be professionals who buy trucks after hearing that there’s a driver shortage will be hurting even more.
Truck driving companies that pay workers well have much fewer problems with retention. Turnover at “less-than-truckload” fleets, where drivers can make $100,000 a year moving loads to local terminals where they are picked up by long-haul truckers, was just 14% in the same period that the overall industry experienced 92% turnover. Many of these drivers are unionized, Viscelli says, and work jobs similar to the ones they would have had before deregulation.
Of course, it’s not easy for trucking companies to just pay drivers more. If they tell a major retailer like Walmart that they’re raising the cost to haul a load, Walmart will only find a trucking company that can do it for cheaper. And trucking companies are dealing with many of the hardships of the supply chain backlog—they told me that they can’t get appointments to pick up or drop off containers at the ports of Los Angeles or Long Beach. Any increase in costs will be charged to the cargo owners whose stuff they are hauling—and likely passed onto consumers.
California’s landmark AB5, which would reclassify truck drivers from independent contractors to employees could force the system to become more efficient. The Supreme Court is currently deciding whether to hear a challenge to the law, which was vehemently opposed by truck driving companies.
In the meantime, says Grewal, there’s another way in which the supply chain shortages are making it harder to be a truck driver. The price of trucks has skyrocketed. He’s seen refrigerated trailers like his go for $100,000, 30% more than a year ago; dry vans—semi trailers enclosed from outside elements—have doubled in price, from $35,000 to $70,000. That means many would-be professionals who buy trucks after hearing that there’s a driver shortage will be hurting even more.
Ben Winck
Thu, November 11, 2021
The Port of Long Beach on October 27, 2014, in Long Beach, California.
Bob Riha, Jr./Getty Images
The US doesn't have enough drivers to solve the shipping crisis because of greed, one driver said.
On top of higher pay, companies must accept smaller profits in the port business, he said.
Firms' prioritization of profits created a workforce "that will leave in a heartbeat," he added.
Companies know how to solve the supply-chain crisis, a truck-driving veteran said, but they just don't want to pony up the cash.
Nearly every element of the US supply chain is stretched too thin. Key ports are badly congested, with a historic number of cargo ships waiting to unload containers. The mess boils down to "pure supply and demand economics," Ryan Johnson, who has been a truck driver for 20 years, said in an October 27 Medium post. As the economy reopened, Americans flush with pandemic savings unleashed a wave of pent-up demand that has swamped the supply chain.
At this stage, Johnson said he didn't see any immediate solutions because trucking companies would rather wait out the supply-chain crisis than rethink their wage structure and profit margins. He said they could fix it but wouldn't.
Among the biggest choke points is the country's supply of port truckers. Only a handful of trucks have the tags, registration, and driver certifications needed to work in shipping ports, and companies can charge higher rates elsewhere, which leaves little incentive to invest in the port business, Johnson said.
The industry has also long relied on "low wages and bare-minimum staffing" to boost their profits, Johnson told Insider. When the pandemic hit and a large number of drivers were laid off, many saw little reason to return, and Johnson said he saw no signs that trucking companies would raise wages to bring workers back.
"You can go make $20 an hour at McDonald's with no benefits, or you can make $4 an hour driving a truck with no benefits," Johnson said, referring to how many drivers are paid per load, not by the hour. "I don't blame them for leaving."
And the massive backlog of containers guarantees truck drivers will run at full capacity for the foreseeable future. The bottlenecks hurt suppliers and consumers, but shipping companies' profit margins are intact, Johnson said.
Trucking companies, then, are in no rush to rehire, he added. More drivers would mean higher operating costs. Automation at ports would theoretically make firms more productive, but that would also require pricey investments that business owners just don't want to make, Johnson said.
"Since they're not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created," he said.
The government can't solve the shipping crisis
The Biden administration announced in October that the Port of Los Angeles, Walmart, UPS, FedEx, and other companies would move to 24/7 operations to ease shipping pressures. But even around-the-clock work won't do the trick, Johnson said.
For starters, labor laws and biological needs keep truckers from operating around-the-clock. The few companies that work with ports also lack the equipment needed to haul more containers. While ports and warehouses are working 24/7, the drivers crucial to moving items between them are still scarce.
Deploying the National Guard to work as drivers would probably do more harm than good, Johnson said. Members would "have no idea what they're doing" the moment they arrive in the port, since the situation is already a logistical mess, he added.
Using the National Guard would also prompt regular drivers to leave, Johnson said. Shipping capacity would plunge, and once the National Guard left, companies would have to make do with even fewer drivers, he said.
The problem, like with the greater labor shortage, is low pay, Johnson said. Trucking "is the same as it's always been," with long hours and unattractive wages. he added. The pandemic led many truckers to realize they would be better off elsewhere, and the industry hasn't adapted yet.
By not paying drivers more, companies "created the labor force that will leave in a heartbeat," Johnson said.
"When you run everything on a shoestring budget and the shoestring breaks, you can't put it back together again," he said. "This is the new normal. There's no doubt in my mind about that."
The US doesn't have enough drivers to solve the shipping crisis because of greed, one driver said.
On top of higher pay, companies must accept smaller profits in the port business, he said.
Firms' prioritization of profits created a workforce "that will leave in a heartbeat," he added.
Companies know how to solve the supply-chain crisis, a truck-driving veteran said, but they just don't want to pony up the cash.
Nearly every element of the US supply chain is stretched too thin. Key ports are badly congested, with a historic number of cargo ships waiting to unload containers. The mess boils down to "pure supply and demand economics," Ryan Johnson, who has been a truck driver for 20 years, said in an October 27 Medium post. As the economy reopened, Americans flush with pandemic savings unleashed a wave of pent-up demand that has swamped the supply chain.
At this stage, Johnson said he didn't see any immediate solutions because trucking companies would rather wait out the supply-chain crisis than rethink their wage structure and profit margins. He said they could fix it but wouldn't.
Among the biggest choke points is the country's supply of port truckers. Only a handful of trucks have the tags, registration, and driver certifications needed to work in shipping ports, and companies can charge higher rates elsewhere, which leaves little incentive to invest in the port business, Johnson said.
The industry has also long relied on "low wages and bare-minimum staffing" to boost their profits, Johnson told Insider. When the pandemic hit and a large number of drivers were laid off, many saw little reason to return, and Johnson said he saw no signs that trucking companies would raise wages to bring workers back.
"You can go make $20 an hour at McDonald's with no benefits, or you can make $4 an hour driving a truck with no benefits," Johnson said, referring to how many drivers are paid per load, not by the hour. "I don't blame them for leaving."
And the massive backlog of containers guarantees truck drivers will run at full capacity for the foreseeable future. The bottlenecks hurt suppliers and consumers, but shipping companies' profit margins are intact, Johnson said.
Trucking companies, then, are in no rush to rehire, he added. More drivers would mean higher operating costs. Automation at ports would theoretically make firms more productive, but that would also require pricey investments that business owners just don't want to make, Johnson said.
"Since they're not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created," he said.
The government can't solve the shipping crisis
The Biden administration announced in October that the Port of Los Angeles, Walmart, UPS, FedEx, and other companies would move to 24/7 operations to ease shipping pressures. But even around-the-clock work won't do the trick, Johnson said.
For starters, labor laws and biological needs keep truckers from operating around-the-clock. The few companies that work with ports also lack the equipment needed to haul more containers. While ports and warehouses are working 24/7, the drivers crucial to moving items between them are still scarce.
Deploying the National Guard to work as drivers would probably do more harm than good, Johnson said. Members would "have no idea what they're doing" the moment they arrive in the port, since the situation is already a logistical mess, he added.
Using the National Guard would also prompt regular drivers to leave, Johnson said. Shipping capacity would plunge, and once the National Guard left, companies would have to make do with even fewer drivers, he said.
The problem, like with the greater labor shortage, is low pay, Johnson said. Trucking "is the same as it's always been," with long hours and unattractive wages. he added. The pandemic led many truckers to realize they would be better off elsewhere, and the industry hasn't adapted yet.
By not paying drivers more, companies "created the labor force that will leave in a heartbeat," Johnson said.
"When you run everything on a shoestring budget and the shoestring breaks, you can't put it back together again," he said. "This is the new normal. There's no doubt in my mind about that."
There is no truck driver shortage in the US
Nicolás Rivero 2 days ago
The trucking labor market isn’t broken
Economic theory suggests that when there’s a shortage of something—in this case, workers willing to driver trucks—prices (or wages) will rise and more people will be motivated to supply it. Eventually, the shortage should abate. Yet the “driver shortage” rhetoric has been repeated by the trucking industry since the late 1980s. How could such a clear shortage persist for three decades in a market economy?
In 2019, two economists for the US Bureau of Labor Statistics (BLS) set out to investigate the mystery of the perpetual driver shortage: Was there something fundamentally broken about the trucking labor market?
The short answer, they found, is no. The labor market for trucking works about the same as the labor market for all sorts of blue-collar work. Differences in pay entice workers to enter the truck driving industry—and leave it for better opportunities. “There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way,” the authors wrote.
In other words: Raise wages, and the workers will come.
Trucking companies are raising wages, and drivers are biting
The real world is testing those economists’ theory. Trucking wages have risen 6.7% since April, when the American covid-19 epidemic began in earnest, according to BLS figures. The number of working truckers is, accordingly, up 7%. When trucking companies raised wages in the runup to the 2020 holiday shopping season, trucking employment went up. When trucking companies cut wages immediately after, employment went down.
Trucking companies are once again hiking wages in an effort to attract drivers ahead of the holiday season. This year, drivers are in higher demand than ever thanks to the extreme backlog of containers clogging up shipyards: Ports simply can’t offload containers onto trucks fast enough. So trucking firms are giving drivers splashy pay raises of up to 25%, offering bonuses of up to $1,000 per day for drivers who get stuck waiting in lines at ports, and guaranteeing minimum salaries no matter how much cargo drivers are able to haul.
The market, in other words, is working as expected. Companies need more drivers, so they’re raising pay and benefits and attracting more employees. But it hasn’t been enough to solve the problem entirely: There are still more open trucker jobs than there are workers willing to drive. (The ATA estimates the difference to be 80,000 jobs, which is the basis for their warnings about the driver shortage.) And overall trucking employment still lags behind where it was during the holiday peak in 2019.
The problem, according to Adan Alvarez, a spokesman for the Teamsters Union, is that trucker wages have been depressed for decades, and they haven’t risen enough yet for the industry to reach full employment. “Companies are now playing catch-up for a problem that has been developing for many years,” he said. The latest spate of pay raises hasn’t made a huge difference for US truckers’ average earnings. Trucker wages are still rising at about the same rate as overall US wages, so the premium relative to comparable jobs is negligible.
That makes it harder for trucking to compete against other blue-collar employers also raising wages in manufacturing, construction, and logistics. “Increasing pay a little bit can make a job slightly more attractive, but not noticeably more attractive than other occupations that come with less of a hassle factor,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association, which represents independent drivers and small trucking companies. “There are many hardships and sacrifices involved in driving trucks. We’re talking about 70-80 hour a week jobs where oftentimes you’re away from home for weeks at a time.”
Jerry Sigmon Jr., COO of the trucking company Cargo Transporters, says recent pay raises have mainly just helped his firm keep up with rising wages at competing employers. Cargo Transporters, which operates a fleet of about 500 trucks, has raised wages three times this year. The third raise, announced Oct. 27, even came with an extra week of paid time off. “I'm not going to say we've had a flood of applicants coming in,” he said. “But we're able to take care of our existing employee base better to keep more from leaving.”
Paying truckers more isn't enough
Driver pay is important, but ultimately it’s just one part of the equation. To solve this problem, the trucking industry will have to offer more competitive wages and working conditions—and the US will have to invest in infrastructure improvements to alleviate some of the hardships that drive truckers out of the industry.
Stakeholders across the industry—the ATA, the Owner-Operator Independent Drivers Association, the Teamsters, and trucking executives like Sigmon—say the US needs to upgrade its infrastructure to make trucking less miserable for drivers.
Drivers are forced to wait in lines at ports that weren’t built to handle the volumes of cargo they’re currently seeing. They waste time searching for overnight parking and wind up ending their driving days early when they happen to find a spot. These challenges make the job more aggravating and less efficient; the more time drivers spend waiting and looking for parking, the less time they’re able to cover distance on the highway, deliver goods to customers, and get paid.
Even if wages are changing, America's infrastructure priorities aren't geared toward truckers.
The newly passed $1.2 trillion US infrastructure bill does include $17 billion for upgrading US ports and $110 billion for upgrading roads, bridges, and highways—but to the chagrin of the trucking industry, it does not include funding for truck parking (nor does the larger social spending bill working its way through Congress).
Nicolás Rivero 2 days ago
© Provided by Quartz A man with a beard and a baseball cap sits in the cab of his truck.
The country is facing a shortage of 80,000 truck drivers, warned the American Trucking Associations (ATA), an industry group representing big US trucking companies, on Oct. 25. It’s a warning they’ve more or less repeated every year since 2005. But it’s particularly worrying in the middle of a global supply chain crisis when there aren’t enough truckers to haul goods out of jam-packed ports.
This driver shortage argument has appeared repeatedly in news stories examining why the gears of the global economy are grinding to a halt. Executives at publicly traded companies have referenced the “driver shortage” in at least 45 calls with investors in the past month alone, according to data from Factset.
But the assertion that the US is suffering from the latest round of a 16-year truck driver shortage is misleading at best. About 2 million Americans work as licensed truck drivers, and states issue more than 450,000 new commercial driver’s licenses every year, according to the American Association of Motor Vehicle Administrators. In fact, it's the most common job in 29 states.
The problem is retention. Many of those licensed drivers are no longer behind the wheel because they can find better working conditions and pay elsewhere. Jobs in factories, construction sites, and warehouses pay similar wages, and don’t require people to work 70-hour weeks, sleep in parking lots, or wait in line for hours without pay or bathroom breaks to pick up a container at an overwhelmed port.
The real shortage is of good trucking jobs that can attract and retain workers in a tight labor market. The annual turnover of drivers at big trucking companies averaged 94% between 1995 and 2017, according to ATA statistics. That means those companies have to re-fill almost every driver position every year to replace the people who are leaving. A third of drivers quit within their first three months on the job. The problem is particularly acute for long-haul truck drivers who carry goods great distances across state lines.
The country is facing a shortage of 80,000 truck drivers, warned the American Trucking Associations (ATA), an industry group representing big US trucking companies, on Oct. 25. It’s a warning they’ve more or less repeated every year since 2005. But it’s particularly worrying in the middle of a global supply chain crisis when there aren’t enough truckers to haul goods out of jam-packed ports.
This driver shortage argument has appeared repeatedly in news stories examining why the gears of the global economy are grinding to a halt. Executives at publicly traded companies have referenced the “driver shortage” in at least 45 calls with investors in the past month alone, according to data from Factset.
But the assertion that the US is suffering from the latest round of a 16-year truck driver shortage is misleading at best. About 2 million Americans work as licensed truck drivers, and states issue more than 450,000 new commercial driver’s licenses every year, according to the American Association of Motor Vehicle Administrators. In fact, it's the most common job in 29 states.
The problem is retention. Many of those licensed drivers are no longer behind the wheel because they can find better working conditions and pay elsewhere. Jobs in factories, construction sites, and warehouses pay similar wages, and don’t require people to work 70-hour weeks, sleep in parking lots, or wait in line for hours without pay or bathroom breaks to pick up a container at an overwhelmed port.
The real shortage is of good trucking jobs that can attract and retain workers in a tight labor market. The annual turnover of drivers at big trucking companies averaged 94% between 1995 and 2017, according to ATA statistics. That means those companies have to re-fill almost every driver position every year to replace the people who are leaving. A third of drivers quit within their first three months on the job. The problem is particularly acute for long-haul truck drivers who carry goods great distances across state lines.
The trucking labor market isn’t broken
Economic theory suggests that when there’s a shortage of something—in this case, workers willing to driver trucks—prices (or wages) will rise and more people will be motivated to supply it. Eventually, the shortage should abate. Yet the “driver shortage” rhetoric has been repeated by the trucking industry since the late 1980s. How could such a clear shortage persist for three decades in a market economy?
In 2019, two economists for the US Bureau of Labor Statistics (BLS) set out to investigate the mystery of the perpetual driver shortage: Was there something fundamentally broken about the trucking labor market?
The short answer, they found, is no. The labor market for trucking works about the same as the labor market for all sorts of blue-collar work. Differences in pay entice workers to enter the truck driving industry—and leave it for better opportunities. “There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way,” the authors wrote.
In other words: Raise wages, and the workers will come.
Trucking companies are raising wages, and drivers are biting
The real world is testing those economists’ theory. Trucking wages have risen 6.7% since April, when the American covid-19 epidemic began in earnest, according to BLS figures. The number of working truckers is, accordingly, up 7%. When trucking companies raised wages in the runup to the 2020 holiday shopping season, trucking employment went up. When trucking companies cut wages immediately after, employment went down.
Trucking companies are once again hiking wages in an effort to attract drivers ahead of the holiday season. This year, drivers are in higher demand than ever thanks to the extreme backlog of containers clogging up shipyards: Ports simply can’t offload containers onto trucks fast enough. So trucking firms are giving drivers splashy pay raises of up to 25%, offering bonuses of up to $1,000 per day for drivers who get stuck waiting in lines at ports, and guaranteeing minimum salaries no matter how much cargo drivers are able to haul.
The market, in other words, is working as expected. Companies need more drivers, so they’re raising pay and benefits and attracting more employees. But it hasn’t been enough to solve the problem entirely: There are still more open trucker jobs than there are workers willing to drive. (The ATA estimates the difference to be 80,000 jobs, which is the basis for their warnings about the driver shortage.) And overall trucking employment still lags behind where it was during the holiday peak in 2019.
The problem, according to Adan Alvarez, a spokesman for the Teamsters Union, is that trucker wages have been depressed for decades, and they haven’t risen enough yet for the industry to reach full employment. “Companies are now playing catch-up for a problem that has been developing for many years,” he said. The latest spate of pay raises hasn’t made a huge difference for US truckers’ average earnings. Trucker wages are still rising at about the same rate as overall US wages, so the premium relative to comparable jobs is negligible.
That makes it harder for trucking to compete against other blue-collar employers also raising wages in manufacturing, construction, and logistics. “Increasing pay a little bit can make a job slightly more attractive, but not noticeably more attractive than other occupations that come with less of a hassle factor,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association, which represents independent drivers and small trucking companies. “There are many hardships and sacrifices involved in driving trucks. We’re talking about 70-80 hour a week jobs where oftentimes you’re away from home for weeks at a time.”
Jerry Sigmon Jr., COO of the trucking company Cargo Transporters, says recent pay raises have mainly just helped his firm keep up with rising wages at competing employers. Cargo Transporters, which operates a fleet of about 500 trucks, has raised wages three times this year. The third raise, announced Oct. 27, even came with an extra week of paid time off. “I'm not going to say we've had a flood of applicants coming in,” he said. “But we're able to take care of our existing employee base better to keep more from leaving.”
Paying truckers more isn't enough
Driver pay is important, but ultimately it’s just one part of the equation. To solve this problem, the trucking industry will have to offer more competitive wages and working conditions—and the US will have to invest in infrastructure improvements to alleviate some of the hardships that drive truckers out of the industry.
Stakeholders across the industry—the ATA, the Owner-Operator Independent Drivers Association, the Teamsters, and trucking executives like Sigmon—say the US needs to upgrade its infrastructure to make trucking less miserable for drivers.
Drivers are forced to wait in lines at ports that weren’t built to handle the volumes of cargo they’re currently seeing. They waste time searching for overnight parking and wind up ending their driving days early when they happen to find a spot. These challenges make the job more aggravating and less efficient; the more time drivers spend waiting and looking for parking, the less time they’re able to cover distance on the highway, deliver goods to customers, and get paid.
Even if wages are changing, America's infrastructure priorities aren't geared toward truckers.
The newly passed $1.2 trillion US infrastructure bill does include $17 billion for upgrading US ports and $110 billion for upgrading roads, bridges, and highways—but to the chagrin of the trucking industry, it does not include funding for truck parking (nor does the larger social spending bill working its way through Congress).
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