There has been a lot of discussion about a so-called driver shortage lately.
For the past 10 years of my trucking career, I’ve heard this mantra every year. The American Trucking Associations – a membership that includes some of the largest fleets in the U.S. – routinely reports 100%-plus turnover rates, and many of its members have continuously been challenged with driver retention. ATA's own economist asserts that there is a driver shortage of 80,000 drivers.
The Fair Labor Standards Act (FLSA) is the law that guarantees overtime pay to many workers, however, the same law has a motor carriers exemption, which says that “any employee with respect to whom the Security of Transportation has the power to establish qualifications and maximum hours” is not guaranteed overtime pay.
Ironically, the fleets crying about a driver shortage are the very same ones who asked for the motor carriers exemption to overtime pay, citing the difficulty in paying drivers for inclement weather, traffic or accident delays, truck breakdowns, delays at shippers and consignees and so on, and built their business model on a pay-per-mile basis. However, the difficulty of calculating driver hours no longer exists with the implementation of electronic logging devices, which track the vehicle and hours of service by the second. If there really was a driver shortage of 80,000 (or whatever the real number is), then microeconomics supply-demand would dictate that the price of labor needs to increase to match the labor supply.
The mega-fleets, to their credit, have tried every trick in the book to address the driver shortage. They’ve tried military veteran transition programs, actively hiring overseas workers and sponsoring work visas to drive, sign-on bonuses and advocating to members of Congress the need to hire kids as young as 18 to drive big rigs. Amazon even wants to hire pot heads as long as they don’t toke and drive.
For the past several years, driver retention has become an increasingly bigger problem. First, U.S. hours of service rules limit over-the-road long-haul truckers to driving 70 hours in eight days. Beyond those hours, there’s waiting at loading docks, maintenance, fuel-ups and a myriad of other job-related activities that are performed off the clock in order to preserve precious drive time. Yet, despite those long, arduous hours cooped in a small truck cab, away from home and family, company drivers average paltry earnings.
According to ZipRecruiter, as of May 2021, the average annual pay for a truck driver in the United States is $50,909 a year. That works out to be approximately $24.48 an hour. But this math is just as flawed as the exemption. The $50,909 figure assumes only 2,079 hours in the year, which is a normal 52-week year at 40 hours per week.
When a driver works 70 hours in eight days (assuming two weeks off) that driver is actually working 3,071 hours, which reduces their hourly pay to $16.58 – barely above many states’ minimum wage. When measured against Walmart, McDonald’s and Amazon, there’s little to no economic incentive for anyone to drive as a company driver, and that’s before the other externalities such as benefits, living accommodations, access to home, friends and family are considered. This is why many fleets have to own the very driver shortage that they created.
The easy, simple, economically viable and socially equitable solution is to eliminate the overtime pay exemption under the FLSA. Using the example above, the same company driver who worked 3,071 hours in a year would bolster their income to $87,320, much more commensurate with the hours worked and the living conditions endured.
Trying to figure out why there’s a driver shortage is no mystery. It’s pay, and it all stems from the FLSA exemption. It’s long past the time that truck drivers need to carry the economic burden on their backs, and if the driver ‘shortage’ has taught us anything it's that if there is insufficient remuneration there will continue to be a driver retention problem.
Alec Costerus is President of Colorado-based Aerodyne Transportation, LLC, an over-the-road long-haul trucking company hauling freight throughout North America; and is co-founder of Alpha Drivers Testing & Consulting, a consulting firm specializing in optimizing drivetrains for owner-operators and fleets. He is the immediate past-Chairman of the Trucking Solutions Group, a peer-to-peer group of owner-operators who collaborate on trucking business and regulatory matters. He can be reached at firstname.lastname@example.org.