The truth about the driver shortage

If you’ve been paying attention at all, you’ve either read or heard that there is a truck driver shortage.

Whether it’s a statement from the American Trucking Associations, a lawmaker at a congressional transportation hearing, or a headline from the mainstream media, the phrase is routinely thrown around.

But is there really a shortage of truck drivers? If so, why are the stores still stocked? And if there really has been a truck driver shortage for decades, why haven’t wages increased enough to attract a sufficient number of drivers?

$14,000 per week?

This past spring, a company in Texas served as the poster child for the nation’s driver shortage dilemma.

According to reports from media outlets across the nation, Fort Worth, Texas-based Sisu Energy was offering truck drivers $14,000 per week because the shortage was so dire. Newsweek and Fox Business reported on it, as did dozens of local TV stations and websites.

“A trucking company based in Fort Worth, northern Texas, is offering to pay experienced drivers $14,000 a week – $728,000 a year – as the U.S. grapples with a nationwide shortage of truckers,” Newsweek wrote.

From KENS 5, a CBS affiliate in San Antonio: “Imagine making $14,000 a week. That’s what one Texas-based company is offering because of a nationwide truck driving shortage.”

Fox Business wrote about the Texas company’s job offer, and brought ATA President Chris Spear on its show, “Coast to Coast” with Neil Cavuto, to discuss the problem of the driver shortage.

“It is a problem. It’s been a problem,” Spear said. “We came into the pandemic with a shortage of about 61,000 drivers. I’m certain when the new numbers come out they will be a bit more inflated because of the pandemic. But as we exit, we’re going to have that problem. It’s a long-term problem that we need to do multiple things to address.

“We acknowledge it, and we’ve got to take aggressive steps to bring more talent in.”

Cavuto never asked what those steps would be, but the host did suggest that the shortage could mean that children wouldn’t receive their toys this Christmas.

“It could mean a delay in stuff arriving not only to grocery store shelves but shelves period,” Cavuto said. “Maybe even value toys and other things for the holiday season. Could you lay that out for me?”

Spear then made the situation seem much less dire by assuring the American public that there were enough drivers to make sure toys – and everything else – would remain stocked.

“I want to stress to everyone watching that we’re not going to run out of fuel. We’re not going to run out of milk and eggs or toilet paper, if you recall that,” Spear said. “There’s plenty of it out there, and there’s going to be a driver who makes certain it gets to where it needs to be and resupplied, but the added pressure of not having enough drivers to move equipment. We have a ton of trucks, a lot of equipment, sidelined right now, because we don’t have the drivers to move it. Our ability to respond to this economy and grow it more quickly really does depend on having a viable talent pool.”

Although the $14,000 per week truck driver article is what fueled most of media’s coverage of the driver shortage this past spring, it turned out the job offer wasn’t exactly what the news outlets made it seem.

Sisu Energy does not hire employee drivers. Instead, they seek owner-operators, and the company says those owner-operators with the skills and certifications to haul “frac sand” could earn up to $14,000 a week.

Of course, even during a maxed out week, the net pay would be much less after accounting the cost of the truck, trailer and other expenses, such as insurance, equipment, and maintenance.

“Those news stories flying around out there are very misleading and inaccurate,” Karrie Grundy, Sisu Energy’s director of recruiting, told NPR’s Planet Money.

Shortage vs. retention problem

ATA has claimed that there has been a truck driver shortage for decades. The organization says there is a shortage of 61,000 drivers and that it will be up to 160,000 by 2028.

For as long as ATA has been saying there is a driver shortage, the Owner-Operator Independent Drivers Association has been saying that’s just not true. OOIDA says that any problems with labor could easily be solved by increasing wages and improving working conditions.

Instead, OOIDA says the real problem involves the inability of large fleets to retain drivers after hiring them. Turnover rates at large carriers are commonly at 90% or above and have surpassed 100% over the years.

“Those who perpetuate the notion of a driver shortage ask you to believe that basic laws of supply and demand simply don’t work,” OOIDA President Todd Spencer said in a 2018 video. “They say we’ve got a shortage, but if there’s a shortage in anything, it will be reflected in the price or value of that particular service. Incomes for drivers adjusted for inflation going back to 1980 would be twice what they are right now or more if they had just kept pace with inflation.”

According to the U.S. Bureau of Labor Statistics, truck drivers’ salaries have increased some in recent years. The average annual salary for truck drivers was $42,480 in 2017 and climbed to $47,130 in 2020.

Factor in that in order to earn $47,000 a year, drivers on average work 60 to 70 hours a week, staying out on the road for weeks at a time. And, remember, truckers receive no overtime pay for that 20 or 30 hours over the standard 40-hour work week.

That reduces what amounts to hourly wage for truck drivers to around $15 an hour or even less.

The wages still fall way behind such occupations as railroad workers ($64,210) and also compete with a variety of blue-collar jobs that allow workers to sleep in their own beds at night and routinely work only five days a week.

And while the average pay for truck drivers is about $47,000, entry-level truck drivers often get paid far less. Considering the turnover rates of 90% or more, it’s the entry-level truck drivers who the large fleets have the most trouble keeping. While the salary may look good on paper, new drivers quickly learn about the difficulties of being away from home while working a stressful job full of regulations. As the majority of truckers are paid by the mile instead of by the hour, new truckers also quickly learn that they’re not being compensated when the wheels aren’t turning.

Statistics from the American Association of Motor Vehicle Administrators show that states issue more than 450,000 new commercial driver’s licenses each year. The candidates for the job are there, but new truckers often leave the industry.

“We have millions of people who have been trained to be heavy-duty truck drivers who are currently not working as heavy-duty truck drivers because the entry-level jobs are terrible,” Steve Viscelli, a sociologist at the University of Pennsylvania, told NPR’s Planet Money.

In 2019, the U.S. Department of Labor published a study looking at the trucking industry and whether or not there was a driver shortage.

The study found that there wasn’t a shortage and that any issues in the labor supply could be corrected by increasing wages.

“These findings suggest a more nuanced view of this labor market,” the report said. “As a whole, the market for truck drivers appears to work as well as any other blue-collar labor market, and while it tends to be tight, it imposes no constraints on entry into (or exit from) the occupation.

“There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way.”

The study also found that truck drivers have lower occupational migration than other workers with similar education levels.

“This suggests, in the aggregate, the labor market for truck drivers works about as well as the labor markets for other blue-collar occupations.”

DRIVE-Safe Act

The Labor Department report did little to end the claims of a truck driver shortage by the ATA. It also did little to end the organization’s efforts toward fixing the “driver shortage problem.”

One of ATA’s solutions is to lower the current minimum age of interstate truck drivers from 21 to 18. The DRIVE-Safe Act would start that process by establishing an apprenticeship program that would allow for the legal operation of a commercial motor vehicle in interstate commerce for people as young as 18.

The idea that there is a driver shortage serves as the driving force behind the bill, of course.

“The DRIVE-Safe Act will eliminate this ridiculous regulation and in doing so address the driver shortage while providing new career opportunities for young Hoosiers,” Sen. Todd Young, R-Ind., sponsor of the bill, said in a news release.

The driver shortage and the DRIVE-Safe Act were frequent topics at the Senate subcommittee on Surface Transportation, Maritime, Freight and Ports’ hearing on freight mobility in May.

A coalition made up of safety advocates, OOIDA, and the Teamsters wrote the subcommittee in June to tell lawmakers that the DRIVE-Safe Act was unnecessary and dangerous.

“During the hearing there was discussion of an alleged ‘driver shortage’ plaguing the trucking industry,” the coalition wrote. “In fact, the Department of Labor has determined that … ‘a deeper look (at the truck industry labor market) does not find evidence of a secular shortage.’ Yet, certain trucking interests continue to advance reckless proposals that would allow teenagers as young as 18 to operate commercial motor vehicles in interstate commerce in response to a fictitious driver shortage despite consistent research demonstrating that younger drivers have higher crash rates.”

The coalition stressed that the problem is a retention issue rather than a driver shortage.

“Instead of advancing initiatives that will not address the retention issue but will degrade public safety, the industry should be focused on keeping drivers through improved safe working conditions,” the coalition wrote.

Despite opposition, there seems to be growing support to lower the interstate driving age. As of press time, the Senate version of the DRIVE-Safe Act had 27 co-sponsors, while the House version had 78.

The solution

Although the Department of Labor report says increasing wages is the way to solve any labor problems the trucking industry has, lowering the interstate driving age would likely do the opposite. It would create a new crop of long-haul truckers for large fleets to recruit right out of high school.

However, it’s unlikely it would do anything to help the mega fleets’ driver turnover problems. Rather, it could leave thousands of teenagers searching for a new career path after a short stint in trucking.

That’s why the battle over whether the trucking industry suffers from a driver shortage or a driver retention problem is much more than an argument over word choice.

“The debate over whether to call this a retention problem or a shortage may seem like mincing words,” wrote Planet Money reporter Greg Rosalsky. “But it matters for the solution.”

If you believe OOIDA, it means the solution is to pay drivers more and to provide better working conditions. If you believe ATA, it means the solution is to let teenagers haul freight all over the country.

“Frame the issue as a retention crisis,” Rosalsky wrote, “and the onus falls on the industry to make long-haul trucking more attractive as a profession.” LL