Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.uberflip.com/i/858523
6 commercial carrier journal | august 2017 Pay to play To attract new entrants, fleets must offer higher wages, and the time may soon be right BY JEFF CRISSEY T he driver shortage has been top-of-mind for carriers since the industry began to climb its way out of the recession at the beginning of the decade. In the CCJ MarketPulse survey, a monthly questionnaire to the same pool of 200 fleet executives from both large and small carriers, the driver shortage has been the top concern for more than 48 consecutive months. In that time, I've listened to or participated in more discussions relating to the driver shortage than I can count. Proposed solutions often swirl around route planning strategies to provide more home time, intro- ducing gamification concepts to engage with drivers, investing in driver-friendly in-cab amenities and more. Many carriers have developed or adopted driver pay strategies to reward drivers for tenure and good driving behavior. Rarely, if ever, do across-the-board driver pay hikes come up. Don't get me wrong – more home time and driver engagement programs are worthy endeavors, particularly for improving retention, but the source of the driver shortage problem is trucking's inability to attract new en- trants. The problem with these strategies is they often are aimed at nabbing drivers working for other carriers; the resulting churn from drivers bouncing from one carrier to the next doesn't even begin to touch the overall driver shortage issue. According to a 2015 study by the American Truck- ing Associations, the driver shortage could grow to a 175,000-driver deficit by 2024. ATA says 890,000 new drivers will be needed from now until that time to keep pace with industry growth and offset retiring drivers. The industry likely will reap the benefits of tighter capacity associated with an all-electronic logging device world beginning in December, at least in the near term. Throw in drug testing procedures, new driver training requirements and other regulatory pressures yet to come, and the "mother of all capacity crunches" could lead to historically strong pricing advantages for carriers. But the boon will be short-lived if you can't cover the loads in a carrier- friendly pricing environment due to a lack of drivers. It's been more than 20 years since I last sat through a college economics lecture, but this seems to be a simple case of supply and demand. There is an abundant supply of could-be drivers currently lured to other trades that may offer similar wages but don't involve the daily rigors of over-the-road trucking. If and when the demand truly exists from fleets to fill seats, starting pay must rise to offset the negative aspects of the job and entice new driv- ers into the industry. A handful of large carriers already are hiking wages by as much as 15 percent. If capacity tightens and a positive rate environment materializes in the next year or two, there may not be a better time for the rest of the industry to follow suit. UPFRONT JEFF CRISSEY is Editor of Commercial Carrier Journal. E-mail jcrissey@ccjmagazine.com. In recent months, "Cost of Labor" has appeared in the CCJ MarketPulse survey as a top concern among fleet executives, suggesting a trend in higher driver pay is on the rise. Jan. June July Aug. Sept. Nov. Dec. Feb. March April May Driver availability Political climate in Washington Freight volume 0% 10% 20% 30% 40% 50% 60% 70% 80% Oct. Regulation Cost of Labor Freight pricing Carrier top concerns 2017 2016