Too much of a bad thing?
The driver shortage actually might become a problem
By Avery Vise
Perhaps the biggest open secret in trucking is that everyone wants a driver shortage. Actually, what you really want is for all of your competitors to face a shortage while you completely solve the problem.
Barring a severe spike in diesel prices, driver availability invariably is the top worry during a time of strong freight. In the Randall-Reilly MarketPulse survey for June, 49 percent said driver availability was the top concern. Just what we need, right? For now, perhaps – but the day soon may come for many carriers when the pricing advantages of tight capacity won’t offset the inability to cover loads. Indeed, that’s already happening, according to the comments of one MarketPulse participant in June:
“Freight is strong, and we are achieving reasonable success with rate increases, but we cannot make up the shortfall of capacity with increases in top-line revenue. Therefore, we will need to reduce our overall costs.”
What are the prospects for a solution both in supply and demand?
In theory, there are several ways to increase the number of available drivers. In reality, none of them seem practical in the near term.
Let 18-year-olds drive in interstate commerce. Trucking never will attract enough drivers to satisfy its needs as long as kids can’t go into the industry right after high school. With the appropriate screens and safety monitoring/mitigation technologies, this should be acceptable, but it’s not.
Pay more. While over-the-road driving pays a good wage, it also calls for a greater time commitment than most other “blue-collar” jobs that typically pull from the same labor pool. Paying more could solve the problem – if trucking companies don’t mind giving up their entire margin or more. At some point, freight pricing might rise to reflect a perceived permanent driver shortage, but we aren’t there yet.
Make driving more attractive. Over-the-road trucking simply is not a lifestyle that appeals to most people. If it were more or less a 9-to-5 job at a comparable wage, then carriers might find it easier to get drivers. Slipseating, relays and similar operating models could help, but the freight density required to pull something like that off in a truckload environment remains too challenging for most carriers.
To increase the supply of drivers, the trucking industry is fighting potentially overwhelming demographic trends as well as daunting business fundamentals. Realistically, the most promising solutions lie in reducing the need for drivers.
Liberalize truck size and weight regulations. Don’t hold your breath. There will be tinkering, but it would take a national crisis to enact and implement changes that will make a dent in driver demand.
Buy up capacity. Mathematically, consolidation doesn’t solve the problem because you simply are combining existing capacity. But fewer players chasing the same freight make it more likely that the remaining carriers can fill partial trailers and use capacity more efficiently.
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