Opinion: Truck driver shortage involves more than ‘churn’
Posted: September 18, 2019 by Rolf Lockwood
Drivers, drivers, drivers. Is any subject more talked about in our industry? Nope. Of the seven issues recently cited as the biggest concerns of Canadian Trucking Alliance (CTA) members, six of them concerned drivers in one way or another, and the only other issue identified was carbon pricing. No mention of freight rates or aggressive enforcement or lousy roads or a zillion other possibilities. Just drivers.
Like the American Trucking Associations, the CTA talks with some alarm about a driver shortage that’s getting worse as time wears on. One prominent American, like just about every Canadian truck driver I’ve ever talked to about it, says that’s a myth.
There is no shortage of truck drivers, at least not in the U.S., according to a senior American economist. Kristen Monaco, the associate commissioner at the U.S. Bureau of Labor Statistics’ Office of Compensation and Working Conditions, says it’s really a matter of turnover, or so-called “churn”. But it’s really a factor only in the truckload sector.
She was speaking at the recent FTR annual conference in Indianapolis.
In the U.S. truckload world, the turnover rate is always around the 100% mark. LTL carriers see annual turnover rates of 5-20% while private carriers report turnover rates of 3-15%. Canadian truckload turnover rates are nowhere near those south of the border, but I haven’t found a recent figure to compare. The closest comes from a 2016 report by the CTA – Understanding the Truck Driver Supply and Demand Gap – which suggests that turnover rates in Canada are generally in the 20-30% range.
Monaco said there’s a difference between driver turnover and a driver shortage, suggesting that annual LTL turnover rates of 5-20% are typical among workers with relatively similar skill sets in other industries.
Who am I to argue with an experienced economist, but I don’t buy the argument. Churn happens when seven drivers are lured away from Carrier A because Carrier B is offering more money or better benefits. Suddenly Carrier A has a shortage but Carrier B added seven bodies and now has a full roster. Overall the shortage remains the same. It just shifts from one fleet to another. Monaco does say that those shifting drivers tend to stay in the industry.
My logic may be too simplistic, in which case, somebody please correct me. This is, after all, complex stuff, and I am most definitely not an economist.
I do believe there’s a driver shortage in Canada. Or, as drivers themselves will tell you, a shortage of jobs worth having in an industry that gets increasingly less driver-friendly.
Trucking HR Canada’s Millennials Have Drive report, published in 2017, indicated that 75% of truck drivers between 22 and 38 years old and 46% of drivers from other generations planned to leave the industry within the next five years. One of the top reasons cited by those looking to leave the industry was wages. In fact, 66% of drivers from the millennial generation and 65% of drivers from other generations said that wages were one of the top three challenges they faced in the industry.
The gross wage figures typically aren’t horribly bad, until you factor in that a lot of driving jobs – and all longhaul posts – don’t involve a simple eight-hour work day. And they might well feature the joys of tarping a load in the rain, chaining up on a cold winter’s day, or dealing with abusive shippers who refuse to let drivers use the can just inside the warehouse door. And that’s not to mention the idiocy of misguided hours-of-service rules now made worse by ELDs.
Remember, trucking competes with mining, oil and gas, forestry or construction for qualified employees. They often pay better and don’t track an employee’s every move like trucking increasingly does.
We really do have a driver shortage and I’m afraid it may only get worse.