Driver shortage debate turns into driver turnover agreement

“Right this instant, there is not a driver shortage …”

That was the opening statement made by John Larkin, strategic advisor at Clarendon Capital, during a driver shortage debate at FreightWaves’ Future of Freight Festival. Larkin was there to represent arguments in support of a shortage.

Representing arguments against a driver shortage – and the views of nearly everyone at this point – was Lewie Pugh, executive vice president at the Owner-Operator Independent Drivers Association. Pugh stated his case by pointing out high turnover rates, low pay and poor working conditions. However, he did not have to do much, because Larkin made all of his points for him.

What was supposed to be a debate about a driver shortage turned into a conversation about how the real problem is driver retention. Arguments as to why drivers are leaving carriers include:

• Low pay
• No wellness programs/low-quality benefits
• Poor quality of truck stop food
• Lack of truck parking
• Restroom shortage
• Lack of sympathetic dispatchers/fleet managers

All of those points were made by Larkin. Some of Pugh’s responses to Larkin’s arguments: “You make a very good point” and “You’re 100% correct.”

There was no driver shortage debate because there was no debate to be had.

“As Lewie was saying, it’s really the turnover issue more so than the shortage of drivers,” Larkin said about halfway through the 30-minute “debate.”

Larkin’s only support of a driver shortage was the potential for a shortage once the economy is booming again. When the economy improves, freight demand will increase and tighten up the supply and demand of drivers. He’s not wrong, but he’s not right either.

In the immediate aftermath of the pandemic, a surge in freight demand caused supply chain concerns, including a limited supply of truck drivers. What happened? Rates skyrocketed, drawing a flood of new carriers and drivers into the market.

Any driver shortage is cyclical, short-lived and quickly resolved by increasing driver pay and working conditions.

“It’s going to take the treatment of these people like human beings instead of like objects, which has been the case all these years. Once companies figure that out, they can drive their turnover rate way down, which ends up being economically advantageous to them. They may pay a little more, but they’re spending a lot less on training and recruiting.”

Again, that was Larkin, not Pugh. But as Pugh pointed out, J.B. Hunt tried that in the late 1990s when it increased driver pay by as much as 35%. This not only significantly increased driver retention but also dramatically decreased crash rates. However, the company never did that again, likely finding that hiring and training new drivers is cheaper than paying experienced drivers more.

“Within five years, they went back to their old practices,” Pugh said. “Apparently, safety and paying the drivers isn’t really that important.”

That’s because the driver shortage myth is just a way to drive down wages. During the debate, Larkin and Pugh were asked about the American Trucking Associations’ changing numbers. Three years ago, ATA claimed the industry was short 81,000 drivers. Now, that shortage is down to 60,000 drivers. Larkin acknowledged that forecasts tend to change as conditions change, which is a fair point. Pugh argued that number will go up whenever ATA wants a new regulation passed.

Rather than spend the money to properly train and retain drivers, ATA and its members are using the driver shortage narrative to support a need for younger drivers and heavier trucks. To please insurance companies, carriers are equipping trucks with all sorts of “safety technology,” including driver-facing cameras, automatic emergency braking, tracking devices, etc. But the result of this, as Pugh pointed out, is improperly trained, low-paid truckers getting into crashes and going to prison while CEOs profit.

Speaking of ATA, it was noticeably absent from this debate.

After Pugh thanked Larkin for being brave enough to talk about a driver shortage, debate host Tim Dooner said, “The ATA wasn’t.” It never has been.

Despite being the driver shortage spokesperson and perpetuating that myth, ATA refuses to reveal its data and debate the issue. Craig Fuller, founder of FreightWaves, has offered to donate tens of thousands of dollars to charity if ATA will actually defend its stance. He offered $50,000 for this debate. The association never responded.

OOIDA will present their case that there is no driver shortage at F3.

The ATA has ignored multiple requests to debate the driver shortage, even when offered $50k towards a charity of their choice.

Bloomberg’s Odd Lots has agreed to be the host of the debate. https://t.co/Z1YdPmjtM6

— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 29, 2024

Fuller offered ATA $50,000 to an organization of its choice again less than two weeks ago. In April, he offered ATA $25,000 to debate the driver shortage. That never happened either.

Why won’t ATA participate in a debate about the driver shortage? Because it knows it cannot defend the myth and will get absolutely destroyed in front of everybody.

The only person brave enough to speak in support of a driver shortage did not seem to completely buy into the idea himself. Instead, Larkin kept bringing up the key belief held by opponents of a shortage: There is a driver retention problem because drivers are paid and treated poorly.

Full stop. End of story. Debate over.

At the beginning of the debate, Dooner polled the audience to see who believed in a driver shortage. Four people raised their hands. After the debate, that number dropped to two – probably the only two left in the entire industry.

I’ll give the last word to truck driver Justin Martin, who was asked about the existence of a driver shortage. His reply:

“Never has been, never will be, never could be.” LL