The trucking industry is having to turn to some innovative pay and recruitment methods to stave off a severe looming driving shortage, according to a call last week from Stifel’s Transportation & Logistics Research Group.
The call included perspective from Gordon Klemp, founder and president of the National Transportation Institute.
Stifel said it expects that the “mother of all capacity shortages” is coming, although it does not expect the shortage to affect 2014.
“Our sense is that the ‘mother of all shortages’ will appear in the 2016-2018 timeframe, as by then the industry will be dealing with mandatory electronic logging devices, speed limiters, hair follicle drug testing, sleep apnea testing, etc., and the economy will likely have expanded, albeit only modestly, by then,” Stifel said in a note.
“The tightness in supply and demand that is likely during that timeframe will be exaggerated, as smaller carriers find that they can no longer survive given their inability to be as productive as they had been. The surviving carriers will typically be larger, better capitalized, and better systematized. They will then be in a position to become discriminating allocators of capacity — allocating capacity to those shippers willing to pay compensatory rates and/or those shippers willing to collaborate with the carrier to facilitate increased utilization of expensive rolling stock and scarce, compliant drivers.”
Klemp noted that trucking companies are implementing somewhat more lenient standards when hiring in order to combat a shortage of applicants to replace current drivers, a labor force that is aging rather quickly. Workers thinking of getting a driving job in order to see the country may no longer be a good fit for the industry — “the adventurous, free-spirited” type, he said — and the wages those who do get into the industry earn is becoming smaller due to rising inflation. To combat these trends, he said some carriers are implementing “sign-on” bonuses for truckers, while other carriers dabble in performance-based pay.
Trucking firms turning to new pay methods
