You would think with a rising demand for freight that the truck driving industry has no worries. However, a shortage of truck drivers presents a good news-bad news scenario for transportation and logistics management.
Wages and Benefits
With projections for a shortage approaching 300,000 by the end of the year, trucking companies are pulling out all the stops. Many are offering higher wages and benefits, such as student loans for trucking schools, which drivers repay by working for the company after graduation. The added incentives create increased competition, making it even more difficult for trucking companies to hire and retain drivers.
The downturn in the economy was certainly one of the contributing factors to the shortage. The recent release of the final Hours of Service (HOS) regulations that reduces work hours has industry experts speculating on the impact to freight management.
Additionally, the Federal Motor Carrier Safety Administration’s (FMCSA) Comprehensive Safety Analysis (CSA) 2010 program requires individual safety records of truck drivers to become more visible. While both the HOS and CSA 2010 are a good step for safety, they are bound to affect the number of available drivers.
The increase in demand appears to be a positive sign; however, the number of available truck drivers is not keeping pace. Analyst, Jeff Kauffman of Sterne, Agee & Leach has said, “The truck driver population is growing at less than 1 percent a year. Freight’s growing at closer to 4 percent.”
Shippers are looking for alternative solutions, such as using railways for cargo previously slotted for trucks.
Bob Messemer, Director, Package Freight Motor Truck Procurement, for Odyssey Logistics & Technology had the following observation.
“As the logistics market continues to be complicated by both capacity issues and driver shortages, it’s vital that companies leverage a network that offers multiple carrier and mode operations to ensure materials and goods make it to their final destination in the most efficient and cost-effective manner.”