Truck Driver Shortage: A Big Piece Of The Tight Capacity Puzzle

Transportation 9 min read
Truck Driver Shortage

America’s trucking sector is in the midst of a capacity tightening that it has been experiencing since the height of the pandemic. The truck driver shortage is a situation that shows no sign of naturally easing as the world returns to normal.

The core factor seems to be a very straightforward one at first glance. Freight companies are warning that there are simply not enough drivers to comfortably meet market demands. Meanwhile, pipeline delays mean new drivers are not getting trained and out on the roads fast enough.

However, dig below the surface, and things are a little more complicated than they first appear. Yes, a number of industry sources agree that as many as 200,000 are expected to leave the industry in the next 12 months. But between 400,000 and 450,000 new commercial driver’s licenses will be issued in the same time period. Likewise, there are currently around 10 million people in the USA with an active Commercial Driver’s License, and there are about 3.5 million trucks that need a driver.

It begs a number of questions. Why is the industry experiencing a shortage, what is driving it and what can be done to address it?

What’s behind the truck driver shortage?

truck driver shortage

Let’s start with the basic facts. In 2021, the industry reported a shortage of 80,000 drivers via the American Trucking Associations (ATA). Reasons cited typically have a lot to say about the pandemic, but while this has undoubtedly had a dramatic impact on the industry, it soon becomes evident that it is just an exacerbating factor.

Drivers themselves say they are facing a problem that has been building since the Carter era. Earlier this year, supply chain expert Peter Goodman spent three days riding shotgun with a 65 year old truck driver who has been working America’s roads for 20 years. Goodman was researching a piece for the New York Times. He discovered a world of surprising hardship, stress, loneliness and deprivation.

Goodman walked away from his experience convinced that the problem is not a lack of drivers at all. Look at it this way - more than 10 million Americans currently hold commercial driver’s licenses, and there are currently between 3.5 million and four million trucks that need drivers. That’s almost three qualified and licensed drivers to drive every truck.

The problem is convincing them that they want to do so. Staff turnover in an average trucking company stands at 97 percent. Just think about that a moment, it means the average trucking company has to find a replacement for almost everyone it employs every year it operates.

Steve Viscelli is a former trucker turned economist and writer who now lectures at the University of Pennsylvania. He says: “There is no shortage of truck drivers. These are just really bad jobs.” Viscelli comments that 50 years ago, driving a truck for a living was a lucrative, middle class profession in which the Teamsters union wielded sufficient power to ensure favorable conditions.

That all started to change in the 1970s and 80s with deregulation and a shift towards big-box retailers with armies of economists dedicated to reducing costs at every step in the supply chain.

In other words, it’s true enough to say driver retirements, career changes and, yes, the continuing long term effects of the pandemic are certainly affecting the industry. However, we need to keep our eyes open and be aware of the bigger picture here, too, and note that none of these factors are anywhere near the root cause of the problem.

Dean Croke is a principal analyst for DAT Solutions, the freight and logistics firm that started life as Dial a Truck in the 1970s. Croke has noted that many drivers have been hesitant to return to work following the time spent in lockdown. Again, it is easy to simply blame that on the pandemic, but there are bigger issues taking effect here. Drivers have had a glimpse of a life in which they see their families every day, in which they sleep in a bed at night and in which a fast food take out is an occasional indulgence, not a daily staple.

Either way, this hesitancy to return to work is contributing further to the tightening capacity. At the same time, there are other perennial factors in play, plus some new ones. These include surging volumes, and an imbalance caused by delays in getting sufficient trucking capacity added back into America's logistics network. In an economy where more than 70 percent of freight is moved by truck, substantial disruption is never more than a heartbeat away.

Demand is threatening to outstrip supply, and in the past, it has been a relatively simple matter to respond to surges by simply adding capacity to the network. But the driver shortage problem makes it impossible to quickly react in this way.

The warnings signs were there

truck driver shortage risks ahead

Don Lefeve spent more than seven years heading up the Commercial Vehicle Training Association between 2013 and 2021. He says the signs were there for all to see that driver and capacity issues were looming. Lefeve, who tellingly has now followed many other industry experts into the autonomous vehicles sector, said in June 2020 that a “huge capacity crunch” was on the horizon. In fact, he predicted the 80,000 driver shortage a year before it happened.

Again, keep in mind that while the pandemic has certainly had an effect, and has served to highlight the issue, it has not been the primary cause. Way back in 2005, long before anyone had heard of lockdowns and social distancing, the American Trucking Associations warned of a driver shortage and estimated the scale of the shortfall at about 20,000. Since then, the number has crept up year on year, reaching 60,000 in 2018 and 80,000 in 2021.

The American Transportation Research Institute said in its October 2019 annual report that driver shortage was the number one concern within the industry, and warned of a “potential shortfall of over 100,000 drivers over the next five years.” This warning came months before the world went into lockdown.

New drivers facing delays

truck driver CDL training

In the latter stages of his tenure at the Commercial Vehicle Training Association, Don Lefeve observed a slow down in training and licensing practices that meant it took longer to get new recruits trained, licensed and out on the open road. Again, the pandemic has certainly played its role here. Driver throughput dropped 40 percent in 2021 compared with 2019, and 100,000 fewer Commercial Drivers Licences were issued.

Some impact was, of course, inevitable as truck driver schools and community college campuses put in-person instruction on hiatus and tried to maintain some sort of throughput with social distancing measures in place. The fallout is still being felt, and in some states, recruits are facing a three month wait just to obtain a commercial learner’s permit. That is needed before they can even get behind the wheel and start the necessary training for their commercial driver’s license.

In short, Lefeve described a “clogged pipeline” and said it would take a long time to get driver training back up to speed and so contribute to adding driver capacity back into the mix.

An aging workforce

The median age of truckers in the USA is 46. That’s four years older than the overall median for US workers, but even that is only half the story. In the private fleet selector, the median age shoots up to 57.

There is no firm data on retirement numbers, as it is not something the ATA monitors. Perhaps, however, that is a strategy they need to rethink, as the numbers clearly show that as it stands at present, trucking is not a young man or woman’s game. One thing is certain, there are more drivers leaving the industry through retirement than are joining through driver training.

Other departures and attrition

Eric Peterson is the CFO at US Xpress. He’s been with the company for almost 20 years, and has risen through the ranks having joined in an administrative role in his early 20s, so he genuinely understands the trucking world.

During last July’s Q2 earnings call, Peterson postulated that the industry would likely see between 150,000 and 200,000 drivers leaving the market in the calendar year. This is after you also factor in sundry terminations for drug and alcohol violations and the like.

Feeling the squeeze

The ATA’s chief economist, Bob Costello predicts that this attrition rate, combined with growing demand, means the overall driver shortage will double to 160,000 by 2028. The big freight companies say they are already feeling the squeeze, and are reporting that their drivers are simply not coming back. Instead, they are finding alternative ways to earn a living, for example in construction and warehousing - or even in local delivery, where they can return home at the end of each day.

Here’s the thing. On the face of it, there is no driver shortage, no squeeze, no barriers to meeting capacity. Even if 200,000 people leave the market in a year, 450,000 new commercial driver’s licenses are issued in the same period.

In short, America has an embarrassment of riches when it comes to commercial drivers, and there are millions of license holders who are ready to go. Crisis? What crisis?

Clearly there is a mismatch here somewhere, and ultimately, it is a very simple one. Businesses are talking about pandemic fatigue, and that the world returning to normal has led to a mass re-evaluation of what is important in life. That is to say, for sure there are millions of Americans with commercial driver’s licenses but there’s a far lower number who want to drive a truck for a living.

Addressing truck driver shortage

Addressing turnover

If that’s the case and the result is people abandoning careers as truckers, it tells its own story, and brings us back full circle to the observations made by Peter Goodman during the three days in which he called a Kenworth T680 home. The real challenge is improving working conditions for drivers so that they can spend more time with their families and reducing stress and hardship when being away for days on end is unavoidable.

In 2015, Max Farrell launched WorkHound, a communications platform aimed at facilitating collaboration between operators and their remote workers. Farrell says the major fleet companies are investing time, money and energy into real changes that will alleviate the pain points for truckers. These include exploring better use of multi-stage transportation and thereby placing more emphasis on shorter regional trips.

Another area that is being explored is to increase opportunities for younger drivers who are less likely to have family ties. At present, drivers aged 18 to 20 are permitted to drive commercial motor vehicles everywhere except Hawaii, but they are not permitted to cross state lines. Lobbyists say a change in the rules here will ease the driver shortage and reduce the median age of drivers, thereby reducing the impact of turnaround through retirement.

Fleets are also looking at salaries across the board, and Farrell said he “would be shocked if there weren’t pay increases announced” by the end of this year.

Looking further ahead, we have already noted that many of the biggest names in the trucking industry are now dedicating their time and expertise towards developing viable autonomous vehicles. Clearly, these will be a game changer, but they are a long term solution and will not serve to meet the challenges that the industry is facing up to in the here and now.