Truck Driver Shortage Creating Supply Chain Challenge for US Businesses

Truck Driver Shortage Creating Supply Chain Challenge for US Businesses

The rapid growth of e-commerce, a strengthening economy, and a rebounding in consumer spending habits have caused a spike in demand in the US trucking industry over the past few years. At the same time as the need for their services is growing, however, the country is facing a shortage of truck drivers, Kirsten Korosec reports at Fortune, with an aging population of drivers exiting the workforce and fewer young Americans willing to sign up for long, lonely hours on the road:

The pain point is specific. The industry calls them “full-truckload, over-the-road nonlocal drivers,” jargon for drivers who haul goods over long distances, often days, if not weeks, before returning home. That lifestyle just isn’t attracting millennials and the incoming Gen Z cohort who place a greater emphasis on work/life balance.

The long-haul sector, which employs around 500,000, was in need of nearly 51,000 truck drivers by the end of 2017, the worst shortage it had ever seen. The lack of qualified drivers—some trucking companies have complained only 1% to 2% of applicants meet their requirements—has businesses competing for the same pool of workers.

The shortage is creating a ripple effect. Companies vying for qualified workers are offering higher pay and signing bonuses. The median pay for drivers in this category is $59,000, according to the ATA. Experienced drivers who work for private fleets can make as much as $86,000 a year.

The truck driver shortage is not new: At CEB, now Gartner, our State of the Labor Market report for the US late last year showed that heavy and tractor-trailer truck drivers had the highest demand of all occupations, followed by registered nurses. Demand for trucking skills has been growing rapidly, but with experienced drivers retiring and not being replaced by new talent, the segment of the labor market with this skill is very small. (CEB Recruiting Leadership Council members can read the full report here.)

The shortage is a product of growing demand, as well as the generational differences Korosec mentions, but also reflects the overall tightness of the US labor market: With the unemployment rate at just under 4 percent nationally, employers in many industries are paying a premium for workers without highly specialized skills or advanced degrees, and offering new benefits like free or low-cost college education to encourage workers in traditionally high-turnover roles to remain with the company for the long term. The effect is compounded in areas experiencing local economic booms, like West Texas’s Permian Basin, where the shale oil rush has some truckers earning salaries over $100,000 a year.

In the conversation about displacement of human workers by automated technologies, truckers are commonly seen as a likely early victim of automation, as automakers and tech companieDemand for trucking skills has been growing rapidly, but with experienced drivers retiring and not being replaced by new talent, the segment of the labor market with this skill is very small.s race to develop self-driving cars and robotics startups are already working on developing driverless trucks. Truckers could also be displaced by brand new modes of goods transportation like delivery drones. In its latest round of contract negotiations with UPS, the Teamsters Union, which represents some 260,000 of the parcel company’s employees, sought to protect its members against the threat of being replaced by driverless trucks or drones, though this provision appears not to have been included in a preliminary deal reached last week.

On the other hand, while automation will certainly change the nature of trucking and logistics, it may not put truckers out of business entirely, at least not in the short term. Korosec notes that emerging technologies like driver assistance systems can make the profession less strenuous, more accessible, and more attractive. Optimistic predictions of the impact of automation see self-driving trucks as a solution to the labor shortage that will create opportunities for less dangerous and unhealthy jobs, while also lowering the cost of consumer goods by making them much cheaper to transport.