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Ontario to Introduce Mandatory Entry Level Training for Class A Truck Drivers
The Ontario Trucking Association (OTA) is applauding an announcement from Ontario's Minister of Transportation, Steven Del Duca, calling for mandatory entry level training for Class A truck drivers in the province.
OTA was informed of the minister's decision yesterday and in an article in today's Toronto Star, the minister is quoted as saying: "We are going to go forward (with mandatory entry level training). We're going to move as quickly as we can but we want to make sure that we get it right." He added he believes "it should take place as quickly as possible, but in a manner that actually produces the end result that we all want, which is the safest roads in North America, which is part of my responsibility."
The minister also raised the prospect of a national training standard at a recent meeting of the Council of Ministers Responsible for Transportation and Highway Safety in Montreal. Ontario is the first province to announce that it is prepared to make an entry level standard mandatory.
An in-depth investigation into truck driver training and licensing conducted by the Star published over the course of the last several days, highlighted concerns raised by OTA and others over the inconsistent level of training received by new Class A drivers, the proliferation of so-called "licensing mills", and weaknesses in the provincial licence test for commercial truck drivers.
David Bradley, OTA's president and CEO, applauded the Minister's statements saying the commitment to mandatory entry level training is "a watershed moment for the trucking industry."
While the Class A licence test needs to be updated and consistently applied, Bradley said "the key is mandatory entry level training – to an industry developed standard – that must be completed before a prospective driver can take the licence test."
"The mere fact that someone holds a Class A licence does not ensure that person has the skills to be a safe and productive transport driver," says Bradley. "Even an improved test will never fully determine a new driver's skill level. Mandatory entry level training will at least assure trucking companies that when they hire a new driver, he or she has some basic level of skill that with additional training and experience can eventually lead to that person becoming a fully qualified professional driver."
Bradley also contends that mandatory entry level training is an essential prerequisite for getting the tractor-trailer driving profession deemed to be a skilled occupation – something a Canadian Trucking Alliance blue ribbon task force of industry CEO's and senior executives says is key to resolving the looming chronic shortage of qualified drivers.
The association has built a coalition of support for mandatory entry level training that includes all the major truck insurance companies, the association representing the province's truck driver training industry, safety groups and the national association of shippers.
A working group of carriers is currently revising the National Occupational Standard which will form the foundation for a mandatory entry level training standard. The project is being managed by Trucking HR Canada in co-operation with CTA and is being supported by a grant from the federal department of Employment and Social Development Canada.
"There is a lot of work to do," says Bradley. "But it starts with leadership and commitment; now that we have that, by working together we'll get it done."
Trucking companies raise wages as driver shortage grows
"Under the new pay scale, I'm looking at probably making over $60,000 a year," Walters, 40, said while waiting for a tire repair in Hagerstown, Maryland. "That's pretty exciting."
Tommy Walters, hauling lawnmowers to Rhode Island from Maryland with his Boston terrier Daisy riding shotgun, is feeling flush these days after the biggest raise of his 17-year trucking career. "Under the new pay scale, I'm looking at probably making over $60,000 a year," Walters, 40, said while waiting for a tire repair in Hagerstown, Maryland. "That's pretty exciting."
Trucking companies raise wages as driver shortage grows
It's a big step up from Walters's usual $48,000 to $55,000 and he's not alone in an industry where drivers' wages haven't kept pace with the national average. Long accustomed to driver shortages, U.S. companies now find themselves fattening up paychecks to retain employees and handle surging freight demand.
U.S. Xpress Enterprises Inc., Walters's employer, announced a 13-percent average boost in August, more than four times the industry-wide increase last year. It became the shot heard around the trucking business, outpacing Con-way Inc., Indianapolis-based Celadon Group Inc. and other competitors that have also raised pay to keep their trucks rolling.
"You have the early stages of what could be a wage war," said John Larkin, a Stifel Financial Corp. analyst in Baltimore. "It's hard for others to stand pat and not take pay up."
Average driver wages may rise as much as 6 percent in 2014, said Kenny Vieth, president of Columbus, Indiana-based Americas Commercial Transportation Research Co. That would be the second-biggest jump since consulting company National Transportation Institute began an annual driver wage survey in 1994, behind 2005's 7 percent.
An $840 billion market
Long-haul trucks account for about 38 percent of the $840 billion U.S. freight market, making drivers a crucial link in that economic chain. The driver shortfall now exceeds 214,000, according to FTR Associates data compiled by Bloomberg. The total eclipsed 200,000 in last year's fourth quarter for the first time since 2004, the data show.
Rising cargo volumes heighten the urgency to fill those vacancies. Freight tonnage rose in six of 2014's first eight months, according to a seasonally adjusted index from the American Trucking Associations, and is at the highest since the Washington, D.C.-based trade group began tracking the data in 1973.
Closely held U.S. Xpress would add 800 trucks to a 7,000-strong fleet if it could find people to drive them, Chief Operating Officer Eric Fuller said.
"We're seeing anywhere from 5,000 to 8,000 orders a week that we're turning down that our current customers are actually offering us," Fuller said. "We're turning those down because we don't have capacity."
Driver turnover
Annual turnover can run about 90 percent in an industry in which drivers may not get home for weeks. Because many employees' pay is based on miles traveled, any time lost to breakdowns or waiting for a customer's cargo means fewer driving hours left on a day's shift.
Wages rose so slowly since the beginning of last decade that drivers lost ground against other types of workers. Big-rig operators averaged $33,690 in 2001, trailing the average U.S. wage by about 1 percent, according to Bureau of Labor Statistics. In 2013, truckers averaged $40,940 and lagged behind by 13 percent.
"It's not a driver shortage," said Vieth, the Indiana-based researcher. "It's a driver-pay shortage."
Pay is the biggest consideration in choosing a job, according to a driver survey by North Bergen, New Jersey-based logistics company National Retail Systems Inc. More home time ranked second, and benefits finished third.
Margin pressure
Truckers can't afford soaring labor expenses, according to the ATA. Operating margins averaged 6.4 percent in the nine-company Bloomberg U.S. Truckload Trucking Index, trailing the 14-percent average for companies in the Standard & Poor's 500 Index. Companies also say higher salaries aren't the best way to expand the ranks of potential drivers.
"Pay is important, but I don't think it's the driving force in the driver shortage," said Kevin Burch, an ATA vice chairman who is also president of Dayton, Ohio-based Jet Express Inc., where a lack of employees leaves some trucks sitting idle. "We're competing for an existing pool of drivers."
Many drivers who left trucking during the 2007-09 recession haven't returned, as U.S. oil and gas boom creates high-paying jobs and the construction industry rebounds.
"The exodus that we're getting doesn't compare at all to what we're bringing into the industry," Burch said. "It's hard to get people into it to fill the seats."
Career option
The ATA is trying to improve the industry's reputation with a promotional campaign that includes the showcasing of driving as a career option. Besides internal steps such as training dispatchers to be nicer to the drivers they direct, companies are asking shippers for flexibility in pickups and deliveries. The idea is to cut any wasted time after a driver arrives and then has to wait to complete a job, Burch said.
Employers also need to reach younger workers, putting them behind the wheel before they pick another path, Burch said.
Celadon wants to avoid wage competition by hiring more drivers without experience and doing its own instruction, said Chairman Steve Russell. The company runs training schools with free room and board, operates trucks averaging less than 2 years old and sets schedules to get drivers home on weekends.
"If you're working at a retail outlet and making $9 or $10 an hour, here you have an opportunity to make substantially more as an over-the-road truck driver," Russell said.
More cargo
Some of the recent raises are taking effect at the start of a holiday shopping season that promises to put more cargo into U.S. trailers. Long-haul trucks carry some of the goods handed off to the biggest package-delivery companies, United Parcel Service Inc. and FedEx Corp., which are boosting temporary hiring ahead of the Christmas rush.
Faster U.S. economic growth could exacerbate the driver shortage, and add to the pressure to increase wages, Stifel's Larkin said. The U.S. economy is forecast to expand 2.1 percent this year and then accelerate to 3 percent in 2015, according the median of 79 economists' estimates compiled by Bloomberg.
The shortage "is as bad as it has been and has the potential to be a lot worse," Larkin said. "There's not a single person who says, 'I got this figured out and it's easy.'"
The industry could use more drivers like Walters. He helps in U.S. Xpress's worker-retention program and stayed in the business even after his pay plummeted during the recession, forcing him to declare bankruptcy. The Chattanooga, Tennessee-based company treats him like family, he said, and he ignores solicitations from recruiters who will "promise you the moon."
The timing of his wage increase meshes with his plan to get married in November. He enjoys touring the country while making a living, with Daisy—26 pounds of short, black-and-white fur and upright ears—along for the ride.
"I love being a driver," Walters said. "It's a good way to make money."