Carriers seeing trouble keeping drivers, even as business picks up

Posted on 04/02/2012 by David Radke

Combined with new driver compliance rules, many carriers are short of drivers.

The U.S. economy seems to be getting steadily back on track, even as problems crop up elsewhere around the world. But the country's trucking industry hasn't been quite as fortunate, with carriers around North America still scrambling to find enough drivers to keep their trucks on the road.

Regardless of anything else, business is certainly strong for the trucking industry. The American Trucking Associations (ATA) reports that shipments increased 0.5 percent from January to February, a 5.5 percent gain from the year before. This continues a steady upward trend over the past few years in the industry that has mirrored the country's slow recovery.

However, Bloomberg reports that numbers released last month by the ATA highlight where carriers are still struggling - hiring. Driver turnover hit 89 percent in the third quarter of last year, the highest point in three years. While carriers aren't having any trouble keeping orders coming in, getting drivers to stick around has grown harder and harder despite what should be a good labor market.

Unemployment in the U.S. has thankfully come down from the double digits the country saw during the Great Recession, but it still sat at 8.3 percent for the first two months of the year, well above its usual level. Nevertheless, carriers have reported finding people who meet driver qualification standards is one of their greatest problems, as more and more experienced drivers look elsewhere.

"It’s kind of a weird situation when you have millions and millions of people out of work to have a driver shortage, but it’s starting to present itself again," Richard Stocking, president of Swift Transportation Co., told Bloomberg.

Two key problems have made it harder to keep veteran drivers: growing opportunities elsewhere and strict driver compliance standards.

While the improving economy has made for busy times at most carriers, one of the biggest winners of late has been the construction industry.

Particularly with the focus the Obama administration has put on improving national infrastructure, opportunities for construction workers are available pretty much everywhere. According to the Bureau of Labor Statistics, the construction industry managed to grow from the year before in February, despite losing 13,000 jobs from January.

Meanwhile, many of these positions offer similar pay and less of the hassle involved in taking extended trips around the country. Given opportunities like that, many drivers with commercial driver's licenses that cover both trucks and construction equipment have decided to settle down.

Construction is bound to slow down some as money starts to run out from the Recovery Act and Congress haggles over every kind of spending, but in the meantime it serves as a pretty strong draw.

At the same time, DOT compliance rules have been tightening over the past few years, particularly with the introduction of the Federal Motor Carrier Safety Administration's CSA program.

With the introduction this more comprehensive driver compliance system, some industry veterans have fallen foul of the new rules and others have simply decided to leave the profession. John Larkin, an analyst at Stifel Nicolaus & Co., suggests that the new rules could cost the industry as much as 3 percent of its workforce.

Soon, carriers might not have much choice but to start raising pay rates for drivers to try to draw new blood into the industry, as well as maybe luring back some of the veterans who left for greener pastures. While that will mean higher rates, Larkin suggests that might not be the worst plan for carriers, who are likely to still see plenty of business in the current economy.

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