No End in Sight for Driver Shortages

“I don’t care if you’re running 50 trucks or 5,000, you have a driver problem,” Covenant Transportation Group Chairman David Parker told attendees at an event hosted by Commercial Carrier Journal in August of this year.

Now the American Trucking Associations (ATA) is warning the shortfall will reach nearly 48,000 by the end of 2015¹. With 68.9% of all freight tonnage moved on the nation’s highways, this issue is not just a headache for fleet operators. Truck drivers are essential to the economy and with the holiday season just around the corner, the demand is only going to increase.

So why the driver shortage?

The aging workforce is a major contributing factor to the driver shortage. Roughly half, 45%, of new hires are to replace retiring drivers according to ATA. At the same time, long hours and long absences from home are putting off younger people joining the profession. Growing regulations are a further deterrent. The introduction of the E-Logging mandate has resulted in many truckers threatening to leave the industry while federal regulations that enforce Hours of Service rules cap the number of miles truckers drive, and therefore the amount of money they earn.

The industry has responded to the crisis by increasing pay. Average pay for long-haul truckers jumped 17% since the end of 2013 to a record average of $57,000 in 2015, according to the National Transportation Institute but more pay and sign on bonuses is not having the desired outcome. With the growing economy increasing demand for domestic freight transportation, the gap just keeps getting bigger. Over the next decade, trucking will need to hire 890,000 new drivers, or an average of 89,000 per year.

The ATA has suggested a number of alternatives including lowering the driving age from 21 to 18, recruiting ex-service men and more at-home time but improving drivers’ conditions is not the universal answer. Smaller truck fleets are more affected by the driver shortage as larger carriers can offer higher pay, signing bonuses and better benefits.

It’s great that the industry is acknowledging the problem and taking steps to ease the situation. But it’s inevitable that the pressure on operators to make the very best use of their existing driver resources will continue to increase.

This is where the latest IT systems can help. Advanced computer systems and data analysis are increasingly being used by trucking firms to understand how they can better improve the utilization of both drivers and trucks. When the cost of fuel increased, routing and scheduling systems were used to reduce mileage and the amount of fuel used. As the price of wages increases, fleet operators are now looking to the same routing and scheduling tools to maximize driver availability. Tools like Paragon’s routing and scheduling system can help transportation managers schedule freight deliveries while optimizing the productivity of their driver resources.

Avoiding running empty trucks is another opportunity for operational efficiency. Tools like Paragon Integrated Fleets help cut empty running by scheduling fleets at multiple distribution centers as one shared resource. Managers can plan more efficient routes for deliveries and collections, even involving warehouses and production sites with different products serving the same customer base.

Modeling and analyzing alternative transportation strategies, including DC locations, delivery patterns, truck sizes and customer allocations can help managers create the optimal supply chain that offers the most cost-effective and transport-efficient network. With the holiday season now upon us and volumes increasing, it is more important than ever to have the most efficient network to best utilize a company’s most important asset – their truck drivers.

Paragon offers a wide range of software tools to help transportation planners maximize utilization of fleets and drivers. Get in touch with us today to find out how Paragon can help you to make the best use of your drivers.

^{1 Truck Driver Shortage Analysis 2015, Bob Costello, Chief Economist & Senior Vice President American Trucking Associations and Rod Suarez, Economic Analyst, American Trucking Associations, October 2015}