• DATVF.SEALAX
    1.289
    0.194
    17.7%
  • DATVF.LAXDAL
    1.605
    -0.016
    -1%
  • DATVF.DALLAX
    0.914
    -0.044
    -4.6%
  • DATVF.ATLPHL
    1.710
    -0.115
    -6.3%
  • DATVF.LAXSEA
    2.088
    -0.010
    -0.5%
  • DATVF.CHIATL
    2.024
    0.060
    3.1%
  • DATVF.VSU
    1.260
    -0.029
    -2.2%
  • DATVF.VWU
    1.688
    0.092
    5.8%
  • DATVF.VEU
    1.562
    -0.018
    -1.1%
  • DATVF.VNU
    1.503
    0.015
    1%
  • DATVF.PHLCHI
    0.953
    0.001
    0.1%
  • ITVI.USA
    10,331.830
    -120.380
    -1.2%
  • OTRI.USA
    8.090
    0.070
    0.9%
  • OTVI.USA
    10,350.660
    -119.540
    -1.1%
  • TLT.USA
    2.620
    0.010
    0.4%
  • WAIT.USA
    158.000
    8.000
    5.3%
  • DATVF.SEALAX
    1.289
    0.194
    17.7%
  • DATVF.LAXDAL
    1.605
    -0.016
    -1%
  • DATVF.DALLAX
    0.914
    -0.044
    -4.6%
  • DATVF.ATLPHL
    1.710
    -0.115
    -6.3%
  • DATVF.LAXSEA
    2.088
    -0.010
    -0.5%
  • DATVF.CHIATL
    2.024
    0.060
    3.1%
  • DATVF.VSU
    1.260
    -0.029
    -2.2%
  • DATVF.VWU
    1.688
    0.092
    5.8%
  • DATVF.VEU
    1.562
    -0.018
    -1.1%
  • DATVF.VNU
    1.503
    0.015
    1%
  • DATVF.PHLCHI
    0.953
    0.001
    0.1%
  • ITVI.USA
    10,331.830
    -120.380
    -1.2%
  • OTRI.USA
    8.090
    0.070
    0.9%
  • OTVI.USA
    10,350.660
    -119.540
    -1.1%
  • TLT.USA
    2.620
    0.010
    0.4%
  • WAIT.USA
    158.000
    8.000
    5.3%
EconomicsInsightsNews

There is no driver shortage

Commentary

The term “driver shortage” gets thrown out by the powers in the industry to explain nearly every major problem or issue that our industry faces- Spot-rate volatility, cost inflation, companies missing their earnings due to unseated trucks, etc. Driver shortage has become the “go-to” explanation to explain every problem.

But the reality is, there is no driver shortage. It’s economic shortage. That’s right- it’s economics 101. Basic supply and demand. Where there is a scarcity of a good or service, prices will rise. Where there a surplus, prices will go down. There is certainly scarcity in the driver population and it all comes down to economics. Raise the amount someone can earn and our driver issue will self-correct.

The industry likes to point out that someone can make a good living without a college degree. Forbes recently reported that drivers make an average of $52,280 per year and driving salaries saw the second fastest growth in incomes of all jobs in 2017. What isn’t said in these numbers is what it costs to be a driver. Being over the road is expensive- both in quality of life factors and in cash.

Drivers spend a lot more money on basic goods than the average household, due to the lack of choices on where to shop. Food and basic necessities at truckstops are far more expensive than at alternative shopping locations. Back in 2013, CDLLife did a comparison of common goods purchased at truckstops compared to Walmart and found that prices at truckstops go for as much as 20% higher.

Truckstops generate nearly 50% margins on items purchased in store, making them among the highest margins in retail goods- far out ranking super markets and big box retailers. Truckstops don’t have to compete with Amazon and are not under normal pricing and competitive pressures, due to the nature of the transient driving labor-force.

Plus, there are far fewer choices on goods and the selection is quite narrow. Combine this with higher healthcare costs, lower quality of life factors, and other things that make driving miserable at times, it is no wonder that carriers have a problem filling the seats, even with marginally higher wages.

With fewer people wanting to drive a truck, the industry is forced to pay more to compete with other sectors that have more attractive lifestyle factors like construction, electrical work, maintenance, etc. The energy sector has also been on a tear of late as oil prices recover. Oilfield work might be difficult, but it doesn’t have the lifestyle issues typically seen in trucking. Even in certain markets, trucking is competing with fast-food jobs, as cities raise minimum wage standards to $15/hr.

The government, education, and media industries do not help, convincing young people that a college degree is the only way to fit the image of a respectful member of society. Once a kid goes to college and is saddled with tens of thousands in debt, they come out convinced that they should work in a career with substantial upward mobility. Unfortunately, driving a truck does not meet this image.

In a normal cycle, immigration would provide a degree of relief, but with that seems to be a no-starter in our polarized political environment.

We are currently experiencing the tightest labor market since World War II and a tax cut will further accelerate demand in the commercial and consumer sectors. Trucker wages will go up over the next year. Don’t be surprised to see 10%+ driver pay increases across the industry as trucking companies compete for a shrinking labor pool.

What we face isn’t a driver shortage- its an economic opportunity shortage and the only way to fix it is with cold-hard cash.  

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One Comment

  1. It goes beyond money. It is also working conditions. We are not subject to fair labor laws. That has subjected interstate drivers to having to "donate" our time.The electronically enforced 14 hour rule is actually helping drivers – as much as we are fighting to keep the status quo. In the future I see more companies adapting a hub and spoke approach. With drop yards a half day away. Driver will drive to the drop yard and hook another trailer to keep moving back home. Trucking companies as well as our customers are going to have to cooperative and innovative. It is not a battle to attract the driver. It is a battle to retain a driver. We are moving from a driver waiting for freight model to a freight waiting for driver model.

  2. There is a shortage of driving jobs people want to keep. The true shortage is of trucking company executives that have failed to redesign the driving job.

  3. There is a shortsge of good proffessional drivers! These big compaines with thier 80-90% turn over rate due to lack of proper training. Oh youve had your cdl 4 3 months.. here be a trainer

  4. Fact —Local P n D , line haul carriers are home every night . ( or day depending on bid) – Colorado avg 55,000 – $ 80,000 yearly ,because of overtime demands . With very affordable dental , eye , medical ins . Base salary on 40 hrs go from 840.00 to about 960.00 week plus some pay time and a half after 8 th hour or 40 hrs , or some don’t pay OT till after 50 to 60 hrs worked

  5. Sorry Freightwaves, you contradict your headline in the second paragraph, “There is certainly scarcity in the driver population…”. ie. There is a driver shortage. Your article surely points out reasons for the shortage and ways to correct it.

  6. There IS a driver shortage and will be until the next recession or until wages hit $70-80K for an average. With more job choices at $50K With fewer regulations and quality of life issues, no one will become an OTR drivers and stay unless they pay starts with a 7 or an 8. Economics 101 says the economy pricing will not support this inflation. So major changes such as autonomous vehicles or delivery localization thru RDC strategies will have to change the career characteristics.. Much like intermodal/JBHT did in the 80s-90s.. but even local jobs will have to pay $60-$70K in the current environment

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