The March trucking employment figures can be viewed as half full or half empty – both perspectives are justified.
According to the U.S. Department of Labor Statistics (BLS), a total of 1,482,700 jobs were recorded in March, up 3,300 from February – a sign that things are going in the right direction.
On the flip side, March was 33,500 fewer trucking orders than last March, just as the industry was on the brink of the pandemic – a sign that we may still be in the early stages of recovery and a long way to go to have.
“The economic recovery has accelerated in the past two months and promises very strong economic growth,” said Thom Albrecht, chief financial officer of Reliance Partners, who suggests that gross domestic product (GDP) growth could rival that of the 1983 economy 7.9% growth. “There’s a good chance the economy will grow between 6% and 7% this year, so it’s improving. In the course of the year this will be more visible in the job numbers. “
Albrecht notes that given the circumstances of the sudden shock to the system last spring, this recovery is different from most of the others. He said job recovery tends to lag behind GDP growth as corporate cost-saving strategies are already in the boom.
This time many jobs were lost apparently overnight. While many drivers found employment soon afterwards, others have not yet regained their positions in the industry. However, Albrecht assumes that more lost jobs can be restored over the course of the year.
While companies huddled through cutbacks in investment budgets last year, this year seeks to reverse those trends. Albrecht assumes that companies will be more willing to justify expansion plans and create more jobs in flatbed freight transport – a sector that suffered a slump last year.
“As you peel back the onion, you start looking at some other topics that require a little more thought, such as: B. Which employment problems are structural or cyclical? Which occupational groups are recovering or lagging behind? Which jobs are not coming back? There are many questions within this broader subject of the labor market, ”said Albrecht.
As the trucking industry seeks to get back to pre-pandemic performance levels, the question remains whether or not its workforce can achieve long-term growth after the recovery. After all, BLS data shows that the employment of heavy and articulated truck drivers is only expected to increase by 2% from 2019 to 2029, which is slower than the average for all occupations.
The elephant in the room is the ubiquitous driver shortage in the truck – a major factor is the advanced age of the existing workforce. According to a survey by the American Trucking Associations, the average age of a driver in the For-Hire Over-the-Road (OTR) industry is 46 years. By comparison, BLS data shows that the median age of the U.S. workforce was 41.9 years as of 2019.
Albrecht is not optimistic that new drivers will be added to trucking soon.
“Ultimately, the driver success of one carrier will probably come at the expense of another carrier,” said Albrecht. “For the most part, truck drivers are still being replaced, unlike [the industry] attracting a great new infusion of people into the truck driver population. “
Although freight demand will continue to rise, he believes that driver recruitment will remain perhaps the biggest challenge facing the trucking industry in this decade. “The demand will be there, but the question remains whether fleets will participate in the niches that grow with or above GDP rates,” he added.
In addition, the US labor force participation rate has gradually improved from its current 61.5% since its low of 60.2% last April. However, the current labor market is still a long way from reaching prepandemic rates of around 63%.
“It doesn’t sound like a lot [of change]What is not captured in these statistics, however, are the estimates that show that 3 or 4 million people have not yet returned to the workforce due to discouragement from their job prospects, ”Albrecht said, adding that the current rate of 61 .5% this isn’t that’s healthy considering the rate in the 1990s was closer to 66% -67%.
If driver classes do indeed produce fewer graduates in the coming years than many predict, fleets will have to look internally for ways to keep their current workforce.
“Every porter I spoke to pulls every lever he can think of,” said Albrecht.
More and more fleets are using salary increases to not only attract drivers, but also to retain their experienced employees. Albrecht describes compensation as the only factor preventing drivers from leaving the negotiating table.
Earlier this month, Knight-Swift announced increases for its drivers – the latest in a series of salary increases and incentives rolled out over the past six months. The April announcement stated that the mileage wage for its OTR drivers would be increased by 2 cents. Similarly, a 3 to 5 cents increase has been announced for its independent OTR contractors.
It is reported that seasoned drivers can start making more than 50 cents per mile, with some making as much as 60 cents per mile in certain regions of the country. In addition, the pay of new employees is said to have increased by at least 40% after the training.
Crete Carrier and Shaffer Trucking also announced plans to increase driver salaries for their regional and national OTR fleets. From May, new OTR drivers will pay between 59 and 65 cents per mile, depending on their experience. FreightWaves reported that the airline expects its top tier OTR drivers to receive an average annual pay of $ 89,300 through pay increases – an unprecedented figure among most trucking companies, Albrecht said.
Old Dominion Freight Line also announced that it will be hiring 800 CDL Class A truck drivers over the next three months. The company stated that all new hires will receive annual pay ranging from $ 73,000 for pick-up and delivery drivers to $ 99,000 for liner drivers, among other things.
BLS data shows that the median annual wage for heavy truck and tractor unit drivers was $ 47,130 in May 2020. Additionally, the lowest 10% earned less than $ 30,660 while the highest 10% earned more than $ 69,480.
“I believe [wages] will stay sticky. They will rise and stay up, but driver pay will likely decrease just as freight market prices will decrease next year, “said Albrecht. “But with [freight] When you increase the rate, you really have no choice but to go out and also increase drivers’ salaries when it has already done so for no other reason than that of most of your competitors you are competing against for drivers. “
This decade will be an important transition period for the trucking industry. As advances in technology and new rules and regulations continue to change the dynamics of the workplace, freight forwarders also have to deal with the ever-changing demographics of the workforce.
Putting new faces behind the wheel could be key to resurrecting the industry. Albrecht believes that the industry’s labor rates could improve if non-traditional populations are proactively recruited.
While efforts have already been made to engage more Hispanics and African Americans, Albrecht suggests that fleets consider targeting the female population as well. He also advocates Indian drivers and drivers with an Eastern European background – subsectors of the trucking industry that he believes are not getting enough attention.
Albrecht notes that Reliance Partners has employees who speak a total of 25 languages in order to better serve the diverse truck landscape. These include lesser-spoken languages in the United States such as Russian, Croatian, Ukrainian, and Punjabi. “We have dozens of employees who are multilingual. Reliance Partners actively recruits potential employees who speak multiple languages. ”
He continued, “Compared to 20-25 years ago when the typical driver profile was a white man from the southern half of the US, the explosion of drivers from other cultures is often one of the untold stories in trucking.”
“It must be one of the levers that the fleets consider,” said Albrecht. “With driver schools still underutilized, the Drug and Alcohol Clearinghouse is still impacting driver availability and the general aging of demographics. Many fleets are fighting an uphill battle.”
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