Tightening regulations, unfavorable demographics have drivers in short supply. Will rising pay and operational shifts meet demand?

In 2004, rising truck tonnage, tight capacity, lean inventories and improved freight pricing helped ignite a driver shortage that swelled to more than 100,000 over the next two years. The result was higher driver pay and big sign-on bonuses. While a tight driver supply gives carriers – and drivers – leverage, a shortfall of drivers this time around could prevent many fleets from capitalizing on available freight and cause disruptions to supply chains.

Market conditions today – while not as robust as seven years ago – are comparable, but the unfolding driver shortage is expected to be much more severe, with some analysts predicting a shortfall of up to 400,000 drivers by the end of 2012.

Chief among the factors expected to curb driver availability are new federal regulations, including the Federal Motor Carrier Safety Administration’s new Compliance Safety Accountability program and pending changes to the hours-of-service rules, as well as driver training capacity limits and an aging population of drivers within striking distance of retirement.

A generational issue

A study during the last driver shortage by Global Insight, commissioned by the American Trucking Associations, shed some light on the industry’s aging driver population. One in six truck drivers was over the age of 55, and 43 percent of all truck drivers were at least 45 years old. While the study was based on analysis of 2000 Census data, meaning that core group is now out of the industry or on the verge of retirement, the findings remain valid today. More than one in three company drivers are 55 or older, according to a 2010 study by CCJ’s sister publication Truckers News, and only 6 percent are under 35.

“The average age of a driver at our company is 54 years old,” says Tommy Hodges, chairman of Shelbyville, Tenn.-based Titan Transfer and immediate past ATA chairman. “I have maybe eight to 10 years in that driver’s life left to drive a truck. Who am I going to get to replace him? The demographics are against us.”

According to the Commercial Vehicle Training Association, the average age for new entrants to the truckload segment is currently 41 years old, and the average age for the less-than-truckload segment is 56.

Compounding the problem of an aging driver force, conditions will be “very negative” for finding new drivers, says FTR senior consultant Noël Perry. With the end of the Baby Boom generation, the number of people available to trucking to replace those retiring will drop to about 500,000 a year from 2.5 million during the last decade when the downturn in construction and offshoring of manufacturing increased the available labor pool. He adds that tougher immigration laws would keep many other potential drivers out of trucks compared with the last decade.

In addition, many truckers who were laid off during the recession either have left the industry or have found jobs with other carriers, says Perry. “It’s going to be fundamentally harder to recruit people.”

Training bottleneck

Perhaps the biggest constraint on driver availability is the industry’s ability to train and qualify new entrants. At its peak, the driver training pipeline is estimated at 150,000 per year. During the last recession, however, many carriers cut back recruiting programs or eliminated them entirely, creating what Perry refers to as a “cyclical drag.” Currently, it’s estimated that the industry can train about 100,000 drivers per year, well short of what will be needed in the near term.

“Some of the largest in-house schools are gone, and we’ve gutted our ability to recruit and train large numbers of drivers,” said Gordon Klemp, president of the National Transportation Institute, during a Commercial Carrier University session at the Truckload Carriers Association’s 2011 Annual Conference. “Rebuilding this will take time and reengineering of the job.”

Mike O’Connell, CVTA executive director and counsel, says the driver training industry also is under siege from federal funding cuts and new regulations.