Transportation, Distribution & Logistics

Companies confront truck driver shortage: Demand is high despite better pay, more time off

June 12, 2006

Amid the steady rumble of diesel engines, Ricky Smith parks his 18-wheeler among a raft of big rigs at the TA Travel Center in Boone County to relax and grab a bite to eat.

It's after 6 p.m., and the Tennessee resident is delivering grocery products on his weekly route that extends from Michigan to Georgia. Drawn by the opportunity to make more money, Smith ditched his job three years ago as a diesel mechanic to drive a truck.

"I like being my own boss," he said. "I'll probably retire doing this."

But judging by a 2005 study from the American Trucking Association in Alexandria, Va., the numbers who share Smith's views are dwindling. The industry is in dire need of more drivers, as the current shortage of 20,000 is expected to reach 110,000 by 2014, according to the study.

"It's probably the No. 1 problem facing the trucking industry right now," bemoaned Kenneth Cragen, president of the Indiana Motor Truck Association. "It's even a bigger problem than the [high] fuel prices."

Making matters worse is the prediction that the annual amount of cargo hauled by trucks will rise from 9.8 billion tons to 13 billion tons by 2016. The driver shortage has become so severe for some carriers that they have idled parts of their fleets because they don't have enough drivers to meet demand, Cragen said.

So what's causing the younger generation to shun a life behind the wheel? The reasons range from the gypsy lifestyle to the requirement that those applying for a commercial driver's license be at least 21 years old. By that time, many people are in col- lege or have found a different career path.

At the other end of the spectrum, veteran drivers who lost jobs during the recession in the early part of the decade never returned. And new rules stemming from 9/11 requiring haulers of hazardous waste to undergo background checks disqualifies those with felonies or misdemeanors.

Attractive pay

The bleak outlook is prompting trucking companies to pad their compensation packages or provide creative perks, in hopes of making a career on the road as exciting as C.W. McCall did in his classic "Convoy" song.

Green Bay, Wis.-based Schneider National Inc.'s search for drivers to staff its Indianapolis hub on Shadeland Avenue touts the potential to earn a $2,000 signing bonus and up to $45,500 during the first year on the job. That's good pay for someone who may not have attended college or finished high school.

Experienced drivers can make up to $75,000 a year, said Jim Hanson, a partner with Scopelitis Garvin Light & Hanson PC, a local law firm that serves the transportation industry.

"Driver pay has really increased the last year or two," Hanson said. "Look at the want ads and the sign-on bonuses. I think pay is still probably the biggest incentive to get drivers in the door."

Nationally, the average annual salary in 2005 for a driver was $35,460, according to the Bureau of Labor Statistics. Indiana truckers earned slightly more: $36,940.

To attract truckers, earnings will need to return to the levels that prevailed in the 1990s, the ATA study said, when they were about 7 percent higher than average wages in the construction industry. Weekly trucking earnings in 2005 were 1.5 percent below the average in the construction industry.

Further, the industry needs to address quality-of-life issues, including the time drivers spend at home and schedule flexibility, the study said.

Perks abound

Many companies already recognize they must do more to attract drivers. The Schneider ad, for instance, mentions such enticements as company-provided commercial driver's license training, predictable freight routes and time at home.

Schneider developed a program in which three drivers share two trucks, enabling one to stay home an entire week while the other two are on the road, company spokesman Mike Norder said.

The firm also has wired drivers to a proprietary online system that lets them plan their calendars 90 days in advance. The system can be accessed via personal computer, laptop or a facility kiosk.

"The predictability of knowing when you're going to get home is just as important as the duration when you are home," Norder said. "If we can retain our current drivers, it reduces our need to hire new drivers."

Indeed, trucking executives say it takes more than money these days to attract people to the profession and keep them there.

"It's about the quality of life they have out on the road," said Andy Card, president of Indianapolis-based Perkins Specialized Transportation. "The quality of life is as important to them as the money they make."

Perkins was founded in 1913 and purchased by Card in 1996. The company has a stable of 300 drivers, most of whom work as owner-operators, or contractors.

To attract company drivers, Perkins has tripled its number of recruiters from three to nine in the past two years. And because most of Perkins' routes require long-haul drivers, meaning they stay out on the road longer, the firm tries to get them home as much as possible, Card said.

Of the 3.4 million truck drivers on the road, according to ATA, 1.3 million are long-haul carriers, the segment most severely affected by the shortage.

Perkins' efforts to cut down on turnover include keeping its driver-to-dispatcher ratio at 25 to 1, which is lower than the industry norm, Card said. The company instituted a driver-mentor program as well, which lets new hires learn from veterans during their first three months on the job.

And if a company driver wants to become an owner-operator, Perkins has a purchase program in which employees can lease tractors and trailers from subsidiary Card Leasing.

No respect

Steve Russell, CEO of locally based Celadon Trucking Services and ATA director, said retaining drivers is even more critical than recruiting them.

Although the industry is short 20,000 drivers, what really hurts transportation companies is turnover. The average turnover rate in 2004 for large carriers was 121 percent, the ATA study said.

In the past five years, Celadon's rate has declined from the industry norm to about 75 percent, Russell said. Besides allowing drivers to earn up to five weeks of annual vacation time, the corporation has a strategy to educate every employee that they work for the drivers, which the company now refers to as "fleet members."

"We're trying to make the driver not feel like the second-class citizen," said Brett Terchila, Celadon's vice president of recruiting. "We try to put our drivers on a pedestal."

The respect factor is important to Clark, the driver from Tennessee, who believes lack of it is mainly responsible for the decline in numbers.

"The truckers are seen as the worst guy out on the road," he said.

To increase the nation's driver pool, the ATA study said, the industry will need to draw upon a larger percentage of women and minorities. Blacks currently represent 11.7 percent of the driver population, Hispanics 9.7 percent and women 5 percent, according to the study.

At Commercial Driver Training Consultants Inc., a local driving school founded by John Priest 15 years ago, students train for three weeks to prepare for the commercial driver's license exam.

The cost is about $3,500. A lack of student-loan providers in the industry is another hindrance to attracting youngsters who can't afford the fee to the industry, Priest said. Several trucking companies recruit students from his school. Still, he said, "I can't get enough people to fill the jobs I have."
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