TORONTO, ON – Canada’s for-hire trucking industry is at the edge of a “demographic cliff” as it faces a driver shortage that continues to accelerate, according to a study released by the Canadian Trucking Alliance (CTA).

Understanding the Truck Driver Supply and Demand Gap, a study conducted by CPCS Transportation consultants, is the first update to a 2011 report of the same name, which predicted a shortage of 33,000 drivers as early as 2020. The latest numbers now forecast a shortage of 34,000 drivers by 2024 – reflecting 25,000 new positions and the loss of 9,000 drivers overall.

The shortage could increase to as many as 48,000 drivers depending on the various trends that affect things like demand, labor productivity, and how attractive the occupation is seen to be, the CTA says.

Ontario and British Columbia are expected to represent the biggest demand, while the gap between the demand and supply is projected to be highest in Ontario and Quebec.

David Bradley, president and CEO of the CTA, says the study “should be a wake-up call and reminder to everyone — carriers, shippers and governments — that while the current lackluster economic activity may be taking some of the edge off the driver shortage in the immediate-term, the underlying trend points to a long-term chronic shortage of truck drivers.”

An aging driver pool is ultimately bringing the trucking industry closer to the “demographic cliff”, the study finds. While there were about 169,000 drivers working at for-hire companies in 2014, their average age continues to be higher than the general labour force.

The average driver is expected to be older than 49 by 2024, up from 47.1 years in 2014 and 44.1 years in 2006, the study says. About 17,000 drivers were between 60 and 65. Like the general labor force, there is also a glut of drivers between 45 and 54. While the overall labor force has a corresponding glut of workers aged 25 to 34, the so-called echo generation is not as represented among drivers.

The share of young drivers has actually been dropping. Those from 25 to 34 represented 18% of the industry in 2006, but 15% in 2011. In contrast, the share between 55 and 64 – most of whom will retire in the next decade – increased from 17% to 22%.

“As the ratio of younger to older workers continues to increase for the labour force as a whole, it is clear that the trucking industry will have to reverse this trend, and fast,” the study’s authors say.

Immigrants account for one in five drivers, but the share is still below that of the overall workforce. Just 0.5% of drivers are non-permanent resident, even though such individuals account for 1.1% of the workforce. A whopping 97% of drivers are also male, even though men account for 52% of Canada’s labor pool

A CTA survey conducted in 2014 found that tractor-trailer drivers make about $23 per hour, but the promise of a higher-than-average pay is dampened by unpredictable hours and time away from home.

Facts and figures

• The for-hire trucking industry produced more than $19 billion in GDP in 2014, which is more than the air and rail transportation industries combined. Based on forecasts by the Conference Board of Canada, for-hire trucking industry GDP is expected to grow to $24.1 billion in 2024, for a compound annual growth rate of 2.2%.
• According to the 2011 National Household Survey (NHS), there were 283,185 truck drivers employed in Canada, making up 1.57% of all employment in the country. Approximately 158,000 of these drivers were employed in the for-hire trucking industry. The rest (approximately 125,000 drivers) were employed by other companies whose primary business was not trucking.
• Trucking is a labor-intensive business. In fact, for both local and long-haul trucking, labor costs are the largest component of total costs. At 30% of total longhaul trucking costs, labor costs are a larger component than fuel costs (21%), capital costs (11%) and maintenance costs (9%). Driver labor alone accounts for roughly 20% of the long-haul trucking cost structure.
• Driver turnover rates in Canada are generally in 20% to 30% range, which is significantly lower than in the United States.
• The Compound Annual Growth Rate (CAGR) of labor productivity in trucking from 1990 to 2010 was 1.62%, compared to 1.32% for the total economy. Had the industry not improved its productivity at this level over that period, it would need 30% (or 50,000) more drivers than it currently employs. Industry productivity is expected to grow at a slower rate than in the past 30 years. In recent years, the industry’s CAGR in labour productivity has slowed, down to 0.9% in the past 10 years and 0.7% over the past 5 years, reflecting the absence of major size and weight increases in recent years and the full absorption of the effects of economic deregulation which occurred in the 1980’s. Other regulatory changes (e.g., US hours of service rules) could further dampen industry productivity.
• In 2015 there were an estimated 13,115 job vacancies for truck drivers in Canada, representing 3.3% of the total vacancies for all occupations. On a percentage basis, job vacancies represented 4.6% of those employed as truck drivers, compared to the average for all occupations of 2.2%.
• Fully automated trucks are not likely to be operational within the forecast period, except on private property. As such, the trucking industry does not see automated vehicles as a means to resolve labour shortages. Automation will likely introduce itself piecemeal, starting with driver assist technologies. There is the prospect that drivers will engage in other activities while seated behind the wheel.

–          Source: Canadian Trucking Alliance