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Back to the Future: The Current and Coming Driver Shortage

Las Vegas - At least one industry analyst has predicted the driver shortage could reach 500,000 by sometime net year. The American Trucking Associations recently reported that driver turnover at large truckload fleets is now at 106%, the highest level since early 2007. What's driving this shortage, and what can be done about it?

That was the question addressed during a panel discussion this week at the American Trucking Associations' annual Management Conference and Expo in Las Vegas.

The name of the panel was "Back to the Future: The Current and Coming Driver Shortage." Kenny Vieth, president and senior analyst at ACT Research, started off with a blast from the past. An article from a 1914 issue of Traffic World noted, "employers complain of the great difficulty of securing drivers who are competent and yet a majority of truck owners will hire the men who will work cheapest."

Vieth asked whether we really are looking at a driver shortage problem today, or if it's really a driver retention problem.

"If you have 100 % driver turnover, finding drivers is not the problem, retaining drivers is the problem," he said.

Vieth showed a chart comparing the pay of truck drivers to that of food service workers. Back in 1981, a driver was making nearly five times the salary of a food worker. In 2010, that had dropped to only about twice as much. "The pay in relative terms was halved compared to a food service worker," Vieth said.

Vieth also posted graphs comparing turnover in the truckload sector with National Private Truck Council benchmarking statistics. NPTC numbers were pretty stable at around 10 to 12%. These drivers get home more often and have better pay and benefits, he said.

The Pay Question

Derek Leathers, president and chief operating officer for Werner Enterprises, also talked about driver pay, showing how since 2006, the average weekly wages for truckers has stayed largely flat (except for a dip during the recession), yet the consumer price index, a measure of inflation, has mostly continued to rise throughout that period, meaning that same pay is buying less.

However, the panelists noted, an across-the-board pay increase may not be the answer. They prefer more targeted pay increases, ones linked to things such as performance or the difficulty of a particular type of trucking job within a fleet. Drivers who are able to get home more often, for instance, may be happy with lower pay than those who are required to be away from home for long periods.

When asked about the possibility of pay by the hour instead of by the mile, the panelists were uncomfortable with that idea.

"I think it's dangerous to disconnect how we pay our drivers from how we get paid," Leathers said.

Equally important to pay, panelists said, are "softer" issues such as benefits and home time, a good corporate culture, CSA coaching, improved driver services like terminal amenities and technology to provide better connectivity between the driver and his family.

Kevin Burch, president of Jet Express, honed in on how the rest of the company relates to the drivers. "We will spend millions of dollars on technology, and that's all well and good, but we won't train a dispatcher to teach them how to communicate with a driver."

"Nothing is more important than network design," Leathers said. In 2008, only 38% of Werner drivers got home at least once a week. Today that number is 71%. The freight hasn't changed significantly; it's all a result of more efficient and thoughtful routing.

Demographics

The panelists explained that changing demographics will make it harder to find drivers, as fewer younger workers enter the market and more of the older, experienced driver pool reaches retirement age.

Burch said the average driver currently is 48 years old.

"I would encourage you to identify the average age at your company," he said. "At mine it's 55. There's a lack of interest from the next generation." Burch said the average age of a truck driver training student is 42 years old.

"The other thing that's a concern to us is the less-than-truckload driver age is even older," Leathers said, "and there's a clearcut financial incentive for drivers to transition out of truckload into the LTL industry."

The Training School Conundrum

Panelists lamented the general lack of respect for truck driver training. At a time when the government is trying to create new jobs, they say, trucking can put to work a large number of people - but they have the hurdle of paying $4,000 to $6,000 for the training needed, and sources of financial assistance have been drying up.

"We need to train, we need to develop, and most important, we need to communicate and mentor young drivers," Burch said. "This industry keeps kicking the can down the road."

Lou Spoonhour, board member emeritus for the Commercial Vehicle Training Association, said if the industry wants to attract new drivers, it's going to have to start hiring more new training-school grads.

"Until recently, when I talked to fleets at job fairs, I used to hear a pretty strong refrain -- all the trucking companies wanted experienced drivers. I would ask the question, if you all want experienced drivers, how is anyone ever going to start in the industry?"

Spoonhour asked fleets to help the driver training school industry in its lobbying for more funding. "When our carrier partners are there with us, and the carriers are saying, 'I can hire every one of the graduates from this school, it does have an impact," he said.

Werner, which does hire new-training-school graduates, agreed.

"We've got to push our government to consider all jobs to be important and quit picking and choosing as they have of late," he said. "Funding toward our industry has been drying up, with funds being diverted to perhaps more sexy alternatives."

ATA

Volvo Proven Tour

Volvo Trucks launched in mid-September its Proven Tour, an interactive customer and dealer road tour showcasing the company's proven leadership in fuel efficiency, driver productivity, safety and vehicle uptime...

 

Volvo Trucks launched in mid-September its Proven Tour, an interactive customer and dealer road tour showcasing the company's proven leadership in fuel efficiency, driver productivity, safety and vehicle uptime. The Proven Tour will stop at 27 Volvo Trucks dealers throughout the U.S. and Canada during the next four months, making its first stop today at Pare Centre du Camion Volvo in Quebec, Canada.

Volvo Proven Tour

A Volvo VNL 780 tractor will pull the 53-foot expandable Proven trailer, which was built to serve as a mobile experience and educational facility for Volvo dealers and customers. The state-of-the-art trailer features interactive stations to allow visitors to learn more about Volvo's proven technology, including XE exceptional efficiency powertrain packages, I-Shift automated manual transmission, steel cab, Volvo Remote Diagnostics and ASIST service communication tool. Volvo dealers and customers can also take part in product presentations and demonstrations in the trailer's 20-person training room. During the tour, visitors will also experience the premier of Volvo's iPad-based Fuel Drop game.

"We're pleased to bring the Proven Tour on the road to our dealers and customers so that they can experience firsthand the breadth of our technology leadership," said Magnus Koeck, Volvo Trucks vice president, marketing and brand management. "The educational trailer Volvo's largest exhibit trailer in the world provides an in-depth look at our integrated products and services and an opportunity to learn how they help improve the efficiency of our customers' operations."

DorogaRoad met Chad Parker, Marketing Product Manager of Volvo Trucks North America at one of the Proven Tour stops - Mid-Ontario Diesel Limited in Maple, Ontario October 11-thand asked him a few questions.

DorogaRoad: Chad, what is the purpose of the Proven Tour?

Chad Parker: The main purpose is to promote the four pillars of our philosophy: fuel efficiency, safety, uptime and driver productivity. We goout doing presentations to customers as well as showing off our products inside our trailer. The customers also talk to us about how our products have proven to help save them money in the long run.

DorogaRoad: So you learn from customers, too.

Chad Parker: Absolutely.

DorogaRoad: Is it a tour throughout North America Canada and the United States?

Chad Parker: Yes, before the end of the year we are hitting 65 major markets starting in Canada before the weather turns bad and we start to see a lot of snow on the ground. So the trailer will leave here and go out to Edmonton and Calgary, then eventually to Salt Lake City, Utah...

DorogaRoad: You are in North Toronto today is it your tenth stop?

Chad Parker: Yes, we have visited 10-12 places so far.

DorogaRoad: How has been the reception from the customers?

Chad Parker: Very good. We talked to a lot of good customers. Some of them were considering a Volvo for the first time, while some have already seen the improvement in the experience that we are talking about.

DorogaRoad: What is Volvo's market share in North America? And what is your goal for the next 5-10 years?

Chad Parker: Right now we have around 12% of market share. We would eventually like to get to at least 15% in the next few years.

DorogaRoad: We wish you to have at least 20%. Thank you for your time.

Chad Parker: Thank you.

This year's portion of the Proven Tour will conclude in late December after stops throughout the West, Midwest and Canada. Following the holidays, the Proven Tour will continue, making stops in 2013 for dealer sales trainings, product demonstrations, customer events and tradeshows. Sponsors for the Proven Tour are Bridgestone Corporation and Alcoa Wheel and Transportation Products.

Volvo Trucks North America/DorogaRoad