Is the truck driver shortage really as bad as it seems?
Bigger problem may be more companies than market needs
There is a widespread conception that the trucking industry suffers from a lack of drivers, but some experts say those concerns are overblown.
The industry was short about 60,800 drivers in 2018 – a roughly 20 percent increase from the year prior, according to the American Trucking Associations. The shortage is expected to balloon to more than 160,000 by 2028, and ver the next decade, the industry will need to hire 1.1 million new drivers – many to replace older and retiring workers.
But not everyone is convinced the driver shortage is the main problem facing the industry.
“The truck driver shortage is poorly understood, poorly defined [and] over-labeled as a problem,” Donald Broughton, principal and managing partner of data firm Broughton Capital, said in a previous interview with FOX Business.
John Wilbur, the CEO of specialty transportation company Roadmaster Group, told FOX Business he sees the shortage as a symptom of more pressing challenges. A “massive turnover rate” in the industry, for example, creates a problem for companies that need to replace workers.
In the first quarter of 2019, the turnover rate at large truckload fleets was 83 percent, according to the American Trucking Associations.
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Wilbur attributed the high turnover rate to the way drivers have historically been paid – on a mileage basis with no guaranteed floor. That means if the company is short of freight, if there is heavy traffic or bad weather, driver pay can suffer.
“The volatility in driver pay is staggering,” Wilbur said, while noting that many companies are transitioning to guaranteed minimums and other measures to ensure a steadier flow of income for workers.
In addition to pay, Broughton said that quality of life and safety standards also play a role.
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Another challenge is that the barriers for entry into the profession are low, which can lead to excess capacity.
"At times, we just have more capacity in terms of trucks than the industry can bear," Wilbur said. "The truck's empty and theoretically, that's the shortage, but should we even have that truck [to begin with]? Low barriers to entry cause too many trucks to be in the market at times."
Tractor-trailer trucks move cargo out of the Port of Savannah, Georgia. (AP Photo/Stephen B. Morton, File)
That overcapacity may help explain another trend that sounds troubling this year – a large number of company failures.
As previously reported by FOX Business, 795 trucking companies failed in 2019, nearly three times as many as the previous year.
That happened partly because 2018 was a particularly good year for the industry, so companies added trucks and increased capacity. When demand sagged this year, driving prices down, the weaker players were unable to keep operating, Wilbur said.
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Still, companies having a hard time finding qualified workers insist the driver shortage deserves the attention it has received.
Brian Fielkow, president of multimillion-dollar trucking and logistics company Jetco Delivery, told FOX Business last year that the driver shortage is a real problem that is being driven by demographics.
Fielkow noted that while the average truck driver is in his or her mid-50’s, the industry has been unable to attract young people fast enough to fill those positions. He also cited pay trends in the industry as problematic, in addition to quality of life.