Driver Shortage Squeezes Already-Tight Capacity

It’s no secret that the recession had a serious impact on capacity – with the Internal Revenue Service reporting that as many as 3,000 carriers were forced out of business during 2008 alone – a less talked about story is the continuing shortage of drivers impacting current capacity.  Not only is there a serious driver shortage throughout the nation’s trucking industry but also, proposed changes to federal regulations threaten to make the problem worse.

The Council of Supply Chain Management Professionals (CSCMP) reported that the industry lost about 150,000 driving jobs during the recession, or more than 12 percent of the total number of drivers.  Factors in drivers leaving are due to retirement, new federal regulations and the industry’s need to add 400,000 drivers to accommodate post-recession spikes in demand.  Plus, a recent report by the American Trucking Association found that driver turnover rate is as high as 79 percent at some larger carriers.

In addition to recessionary cutbacks, reasons for the driver shortage include:

• Aging workforce:  CSCMP reports that roughly one in six drivers are over the age of 55, and less than one quarter are under age 35.

• Competition within Industry:  Shortage of drivers is resulting in companies increasing pay and benefits – which in turn has caused drivers to jump from carrier to carrier.

• Proposed Federal Regulatory Changes:  Washington has issued proposed regulatory changes – under the auspices of improving highway safety and weeding out bad drivers – that industry officials say would have a net effect of forcing more drivers out of the workforce.  Among the federal government’s proposals:
  • Hours of Service Reduction:  The government would limit drivers to a 14-hour workday and reduce driving time to 10 hours from the current 11.  The Federal Motor Carrier Safety Administration has also proposed mandatory breaks and rest periods.  The trucking industry claims that these provisions will result in added costs and the need to bring on even more drivers, at a time when current drivers are in short supply.
  • CSA:  Though it is a Compliance, Safety, Accountability initiative, FMCSA has proposed new standards for driver safety and vehicle maintenance.  FMCSA is proposing to expand on current practices already in place.  The industry believes that the new changes are burdensome and impractical and will have little impact on the agency’s stated goal of reducing accidents.

How is your business looking to combat capacity shortages?  Do you maintain your own fleet or are you speaking with your logistics provider on maximizing linehauls for your shipments?