Number of drivers Key indicator for trucking costs
Among freight companies that held their earnings calls over the past week, the shortage of professional truck drivers has been a frequent topic.
“The continuing national shortage of qualified drivers is a long-term double-edged sword for our industry, simultaneously tightening the freight market while limiting fleet size,” said Marten Transport Executive Chairman Randolph L. Marten. , in a press release. Press release.
The industry’s truck driver shortage was estimated at 80,000 drivers – an all-time high – in 2021, according to the American Trucking Associations (ATA) 2021 Driver Shortage Update. This figure is the difference between the current number of drivers and the optimal number needed to meet freight demand.
“Based on current trends, the shortage could exceed 160,000 by 2030,” the ATA said in its report.
Overcoming the shortage of drivers
When trucking company Marten Transport released its earnings report on July 18, Marten’s remarks in the press release were largely devoted to the driver shortage, the number of drivers the company retained and the how she did it.
In a presentation Released in conjunction with the appeal, Marten Transport said it had bucked the trend and increased the number of its drivers by 422 in one year, increasing by 123 in the previous quarter alone.
“Our approach to overcoming the driver shortage places greater emphasis on structurally improving our drivers’ jobs and work-life balance by collaborating with our customers, while increasing our drivers’ compensation,” said Marten said in the statement.
In another recent earnings call, JB Hunt Transport Services cited labor availability as a trend that is straining the company’s efficient use of capacity.
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“The driver market remains competitive and challenging, but it looks more stable than it has for some time, but at a significantly higher cost,” said Nick Hobbs, chief operating officer and president of contract services at JB Hunt, during the company’s quarterly results on July 19. call.
Similarly, executives at diversified freight transportation company Knight-Swift Transportation Holdings said on a July 20 quarterly earnings call that driver search and retention continued to be a limiting factor, noting that drivers’ salaries were increasing.
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“Driver recruitment and retention continues to be a challenge, but we are seeing sequential improvements in our ability to recruit drivers,” Knight-Swift CFO and Treasurer Adam Miller said on the call. . “It has allowed us to make progress in reducing the number of unseated trucks and slowing down the reduction in productivity year over year.”
Looking for solutions
In its 2021 driver shortage update, the ATA said some of the factors contributing to the shortage include a high average age of drivers which is leading to a high number of retirements, as well as a reduction in the number drivers trained in schools in 2020 due to the pandemic.
In addition, drivers face lifestyle and work issues, such as time spent away from home, lack of truck parking spaces that prevent drivers from finding an overnight spot, and traffic congestion, which limits drivers’ capacity to make deliveries.
“The solution to the driver shortage will most certainly require wage increases, regulatory changes and changes to business practices of shippers, receivers and carriers to improve conditions for drivers,” the ATA said.