A couple of years ago, Paul Adams pointed out, truck drivers could make a pretty comfortable living.
Companies were paying high rates to move goods around the country, the demand for trucks and equipment was overwhelming and procuring one was challenging.
Then came a once-in-a-lifetime pandemic that forced changes in how nearly everyone did business. The pandemic, along with other economic factors — including rising fuel prices and crippling, record-setting inflation — have presented challenges that have left the trucking industry, particularly independent truckers and smaller companies, reeling.
“It was a great time to be a truck driver,” said Adams, the CEO of RoadEx, a Livonia, Mich.-based company that offers dispatch, insurance, and financing services to more than 3,000 independent truckers and small fleets. “You could make an incredible living.”
According to Adams, 2019 was a terrible year in trucking, one he said “put a lot of drivers out.” As it evolved afterward, Adams said, the rates-per-mile truckers were being paid started going back up and driving “started coming back.”
“A typical driver can make between $90,000 and $150,000 per year, Adams said, depending on “how they drive and what they’re driving.”
“Up until the last 10 months, when the cost of fuel went through the roof, these guys were able to take in, if you rode hard, maybe $200,000 driving a truck,” he added. “It was a good living. It was a great living, actually.”
Adams pointed to several costs or issues that drive the trucking economy:
• Cost of insurance, which he said has gone from maybe $7,000 per month per truck to as much as $24,000 per month in the last 10 years. What’s
driving the hike? Lawsuits.
“A lot of that has to do with mega lawsuits … You see the (billboards) down the highway: ‘Get hit by a truck, call me!’” Adams said. “It’s not about who’s at fault, it’s ‘Let’s file a $2 million lawsuit.’ Those kinds of things drove insurance through the roof, putting a lot of drivers out.”
• The pure cost of fuel. Going back 18-20 months, he said, drivers were spending 7-10% of their route income on fuel, depending on where the route ran.
“If you ran in California it maybe was a little more, if you’re in the Midwest, maybe a little less,” Adams said. “Today, even though fuel is down about 28 cents over the last few weeks (it has since started rising again), you’re still running at 30% of the load.”
Ajay Gupta is the co-owner of Stoney Creek Logistics in Rochester Hills, Mich., a carrier dedicated to being a long-haul lane carrier. Stoney Creek works mostly with automotive parts and brokerages and has run “the same lanes” the last 10-12 years.
Gupta said identifying and finding drivers — and then keeping them — has been difficult.
“There are various reasons,” Gupta said. “The market is somewhat competitive; drivers can go from one carrier to another pretty easily if they’re not getting what they want. Fuel costs have gone up substantially, which has made it difficult for us to find drivers for long hauls. Most drivers we’ve talked to are looking for routes that get you home in a night. If they prefer to be home at night, they’ll take that over the fuel costs.”
• The rate per mile. A year ago it was more than $3 a mile, maybe $3.50 a mile, which offset, at least a little, the increase in the costs to the drivers. Today, he said, the rate per mile is closer to $2.50.
“So that same route you might have driven 1,000 miles for, you’re taking $1,000 out, your fuel is up 30% and your insurance is up 5-10%,” Adams said.
• The actual costs of the trucks. According to Adams, a truck and trailer might have cost a driver $165,000 to $180,000. Now, he said, dealers are charging that much just for the truck and a trailer that might have cost $35,000 new it going for $65,000. Factors such as the scarcity of trucks, supply chain issues, parts, and profiteering have affected the price.
“It’s all the same kinds of things that go into buying a new car,” Adams said. “The impact of that was the rigs went way up so guys weren’t buying trucks. (Instead) they’re running less efficient trucks when they should have rotated their trucks out, because they can’t afford $240,000 for a rig. You can’t make money when you’re making your payments.
“All those pressures came in to cause some really tough times,” he added. “Some of these guys are making (as low as) $50,000, depending on the costs when they bought their rig.”
The bigger trucking companies don’t have it as bad, Adams said. They typically own their own fleets, for instance, so group-rate insurance keeps that cost down — “Quantity has its advantages,” Adams said — and they have their own drivers, or pay for lease-time driving.
It’s the independent truckers — the ones who only have 1-2 trucks — who have it tougher. These drivers are finding their own routes, finding their own loads. In the good times, these drivers got to pick where they want to be, when they want to be there and how much they want to drive.
These independent truckers and the smaller companies are the ones RoadEx is in business to help, providing bookkeeping and dispatch services, among other things. And they’re the ones, according to Adams, who need a little help.
“Independent guys are the ones struggling more today,” Adams said. “They’re usually new-business guys or they’re solid truck drivers, but not someone who spent their life thinking about how to work a spread sheet.
“They’re the lifeblood of trucking,” he added. “The independent guy is the one who’s moving all the things that have to get there overnight, for special loads, they’re picking up stuff some of the companies don’t want to pick up because of where it’s going.”
As a result, the industry is experiencing a severe shortage, which is expected to grow even worse over the next decade.
The Society for Human Resource Management reported that the latest statistics from the American Trucking Associations indicate that the industry was short 60,800 drivers as of late 2018.
The ATA’s chief economist, Bob Costello, told SHRM that number could reach 160,000 by 2028 (RoadEx’s Adams thinks it’s already even higher than that, possibly as high as 200,000).
“For many, this means (companies) have trucks sit for days, which increases costs and quickly impacts a company’s bottom line,” Keller said. “The cost of having a truck sit empty is high. Our customers estimated the cost of a sitting truck is $500 to $1,500 per day, per truck. That’s a huge number.”
Costello told SHRM there are a variety of reasons for the shortage, in addition to the ones Adams explained. Among them: a federal law that prevents drivers who are younger than 21 from hauling freight across state lines, even though 49 states, as well as Washington, D.C., allow younger drivers to get a commercial driver’s license so they can drive large trucks.
Roadscholar.com calls the aging demographic of truck drivers the number one reason for the shortage. The majority of truckers, according to the site, are males above 45 years of age. Since the development of the I.T. sector and other technologies that seem to offer a more promising career, attracting younger people to the trucking industry is challenging.
One of the crucial factors here is the driver’s minimum age limit, currently set at 21. Changing it to 18 years would open a whole new world to the trucking industry and fill empty positions, according to Roadscholar.com.
If the government doesn’t want to let younger folks actually drive the big trucks, Adams suggested some sort of ride-along program could be instituted to get young people interested in trucking.
“There are spots to interest young people in getting into being a truck driver,” Adams said. “If the government is serious, let’s pay those young people to ride along with the big guys, let them experience it and see what it takes.”
Drivers are also required to pass pre-employment and random drug screenings. At the start of 2020, SHRM reported, the federal government created a national database of drivers who failed drug tests, which has had a significant impact on drivers. Costello said the ATA pushed for this requirement and fully supports it, but noted the policy has “impacted a number of drivers.”
RoadEx’s Adams supports such measures, as well.
“Some of those (regulatory measures) are tough to swallow, but safety on a rig is important,” Adams said. “You’re driving a rig that’s 53 feet and 150,000 pounds.”
The ATA’s Costello agreed with Adams that the COVID-19 pandemic hurt. The public health aspect of the crisis limited trucking opportunities to experienced drivers, because most schools shut down and trucking isn’t exactly something that can be taught via Zoom. According to the ATA, some 40% fewer drivers were trained in 2020 than the previous year.
That, Costello told SHRM, probably prevented tens of thousands of drivers from entering the industry. “The good news is, as things return to normal, this issue should slowly resolve itself,” he said.
Another reason there’s a driver shortage, according to Adams, is the lifestyle itself.
“It’s a tough living,” he said. “You’ve got to be a special breed to want to be alone for eight hours in the cab. It’s not a sexy job, it’s hard work.”
The difficult lifestyle, according to Roadscholar.com, is “another vital factor” causing the current shortage. Everyone sees truck drivers as people who spend their entire lives behind the wheel, driving all day, every day. The perception is drivers have no personal life.
The folks at Road Scholar Transport agree that, “to some extent, that is correct.” However, the trucking industry looks different today, with a burgeoning role for technology, such as autonomous trucking … and increased distribution centers rapidly reduce the number of hours truckers spend on the road. Fleet management software allows for precise calculations of trucking routes, and there are no more reasons to spend endless hours driving all day long.
Stoney Creek Logistics owner Gupta says the lifestyle can be a drag on truck driver interest.
“We had a couple of drivers who were driving well for us, who stopped because they didn’t want to be drivers anymore because of the hours,” Gupta said. “Truck driving is grueling, just like any blue-collar job you’re seeing, it’s difficult to find individuals who want to do that kind of work.”
Trucking companies are trying a variety of things to combat that kind of attitude and to ease the shortage. They’re hiking the pay and adding sign-on bonuses. SHRM reported that pay for drivers jumped some $13,000 a year (from $73,000 to $86,000) in 2020, so money isn’t the only issue.
That means, according to the ATA’s Costello, that industry leaders are going to have to find other ways to attract drivers.
According to SHRM, Centerline Drivers, a recruiting firm in Burbank, Calif., that specializes in finding truck drivers, is pushing benefits like more control over their work decisions, the ability to be home on weekends as drivers gain experience and the industry’s stability, Keller said.
“Sometimes, it will mean paying drivers a little more or being more flexible with time on and time off, but it will help eliminate potential operational interruptions,” Shane Keller, Centerline’s managing director of recruitment, told SHRM.
Lauren Gast, director of marketing and communications at the Truck Driver Institute, a truck driving school with 11 campuses across the U.S., told SHRM companies are trying to attract more female truck drivers and the initial signs are positive.
“The trucking industry is working to adjust their image to become more favorable with a new demographic,” Gast said. “If it can, it will be able to perform much better.”
The industry better hope so. Back in May, CNN reported that huge increases in online ordering during the pandemic sent the demand for drivers skyrocketing. That’s part of what drove companies to hike pay. But that still hasn’t persuaded enough people to take the long-distance driving jobs that the industry needs to fill, the network reported.
Instead, drivers are jumping from company to company, following the money.
The average annual turnover rate for drivers is about 95% for truckload carriers, the segment of the industry that moves trailer-size shipments long distances. Truckload carriers are experiencing the industry’s most severe driver shortages.
Drivers appreciate the increased pay, but they’re keeping an eye on what’s being offered elsewhere, a trucker told CNN.
“Everybody loves getting more money,” the trucker told the network. “You hear numbers thrown at you, there is a temptation to go elsewhere.”
Ironically, rising pay itself may be exacerbating the shortages it’s designed to solve. Many drivers are using the larger paychecks to cut down on their driving.
“Drivers want to be home more. They have expressed that to us,” Tim Norlin, vice president of driver employment at Roehl, told CNN.