The driver shortage has been around for quite some time, but shippers are not quite feeling the full impact today. Due to low freight volumes and excess capacity, shippers probably aren’t too concerned with the driver shortage right now, but fluctuating freight volumes, coupled with a heightened regulatory environment, are set to create a snowball effect that will bring the shortage to a climax in the coming months.
The largest national trade association for the trucking industry, American Trucking Associations (ATA) recognizes that there is a current shortage of 45,000 Class 8 truck drivers. This shortage represents just 1.6% of the current driver pool, thereby limiting its current impact. By 2024, ATA projects that the trucking industry will be short nearly 175,000 drivers.
The above projection does not take into consideration the impact of future regulations. Rather, it “simply demonstrates the difference between expected supply of drivers (using demographic and population data) and the demand for drivers (which accounts for industry growth and replacing aging drivers).”
The advanced age of truck drivers is a key factor in the rising shortage. The median age of over-the-road truck drivers was 49 as of late 2014, as compared to 42 for all U.S. workers. Drivers for private fleets are even older, with a median age of 52.4 This discrepancy highlights the difficulty that the trucking industry has in attracting a younger generation of drivers.
For safety reasons, the law mandates interstate truck drivers be at least 21 years old. The effect on the trucking industry is many potential drivers have already found better-paying work elsewhere before reaching the minimum age requirement.
In addition, jobs in comparable industries, such as construction, have become more readily available. Many of these jobs require less travel and responsibility than over-the-road trucking, which makes it challenging for the industry to attract the young, new drivers it needs. Furthermore, driver pay has fallen dramatically since trucking deregulation in 1980, with wages dropping approximately 62%.
Due to these factors, driver turnover is extremely high, with annualized turnover rate for large truckload fleets reaching 102% in 2015. ATA Chief Economist Bob Costello reflected, “This elevated turnover rate shows that the driver market remains a challenge for truckload fleets. Obviously, attracting and retaining drivers remains a top concern for the industry.”
Supply chain managers must prepare for the challenges of both today and tomorrow. That means planning and preparing for potential disruptions before they impact the transportation network. Download our white paper, “DISRUPTIONS AHEAD: A guide to navigating the driver shortage and trucking regulations," to learn what regulations will impact the driver shortage in the coming months and how you can prepare for it.