The Source for Trucking News, Opinions and Trucking Jobs | Finally! The Answer to the Driver Shortage!

During the last few weeks there have been several articles about the driver shortage. Even USA Today ran an article about how the driver shortage can halt or do damage to the economy.

At the same time trucking companies are posting extremely good profits because of the tight capacity.

Werner Enterprises Reports Record Operating Revenues and Earnings “I am pleased to report our twelfth consecutive quarter of improved year-over-year earnings. Despite rising costs for fuel and driver pay, we improved our operating margin by negotiating needed rate increases,” said Chairman and Chief Executive Officer Clarence (C.L.) Werner. “Our freight volumes and service performance are at a high level as we move into the seasonally strongest period of the year.”

Even with high fuel and driver costs their sales team renegotiated higher rates with their customers.

Landstar nearly doubles 3Q earnings – 2004-10-14 – The Business Journal of Jacksonville

President and CEO Henry Gerkens said Landstar was able to handle the additional demand created by the hurricane without affecting regular customers.

“Landstar was able to source the capacity required for disaster relief efforts in Florida and throughout the Southeast while providing sufficient capacity to its regular customer base,” said Gerkens.

Landstar not only is making money they can have sufficient capacity during this driver shortage.

The Morning News :: Business :: Analyst Says J.B. Hunt Strong, Best Yet to Come

J.B. Hunt Transport Services may have posted record earnings in the third quarter, but an analyst said the company still has room to grow.

Who do you believe? I’m having trouble deciding if there’s really a shortage or not. Depending on the part of the country I’ve had to wait a few days for a good paying load. How bad of a shortage can it be if shippers and brokers are still offering anything under a dollar a mile?

Now I see this -

Fleets say they may need $65,000 drivers!Several major U.S. carriers say trucker pay has to increase to as much as $65,000 a year before fleets will have enough drivers to meet demand.

Covenant Transportation founder and CEO David Parker said his fleet expected to raise driver pay again in the first quarter of 2005, as many fleets did in 2004, but per-mile incremental pay raises may not be enough to draw the tens of thousands of drivers that the industry needs.

“Should we go up to $65,000 tomorrow?” Parker asked at a “Capacity Crisis” forum for shippers and carriers, held Oct. 11-12 in Atlanta. “I don’t have the guts to do it.”

While the national average pay for truck drivers currently hovers around $40,000, Parker and Duane Acklie, chairman of Crete Carrier Corp., speculated that salaries between $60,000 and $65,000 would be needed to fill the current shortfall.

“LTLs are paying $65,000 and have less than 20 percent turnover,” Parker said. “We’re paying $42,000 and have 100 percent turnover … I think you’re going to see driver pay increase over the next few years, 5 or 6 cents a year for the next five years.”

“Pay is important,” Acklie said. “We don’t have a shortage of drivers, just a shortage of drivers willing to work for what we pay.”

Finally someone has come up with the answer! Instead of bogus bonuses and b.s. incentive programs, SHOW US THE MONEY!!! TODAY!!! Companies are going to have to raise salaries to compete with construction and other jobs. Which will force them to raise rates. The market will determine how much they can get away with raising rates. Consumers seem to have a short memory when prices rise. They get used to it and continue buying.

They don’t have the guts? I can understand not wanting to give out raises, then the economy slips and they have to take it back. What about working on a percentage? Then your wages rise and fall with the rates. Trucking is cyclical and some people can’t handle not knowing from week to week what they will be making.

Where have we heard this line before? – “We don’t have a shortage of drivers, just a shortage of drivers willing to work for what we pay.” How about throughout this entire web site! My first post about the cheap driver shortage was back in March of ’04 about my letter to the editor in Sep ’03. How about the research of Prof. Belman that I wrote about. I ordered his book and am waiting for it to arrive. His research makes the most sense from the bits and pieces I’ve read.

You can find something about a truck driver shortage in every year that trucking has been in existance. I can’t link to these, but they’re there.

Transportation Journal; 12/22/2002; Lambert, Thomas – Despite the recent slowdown of the U.S. economy, many trucking firms are still experiencing difficulty in finding and retaining qualified drivers. For the last two decades, the trucking industry has been hit hard by a shortage of truck drivers.

How about in 2000 when trucking was trying to get the government to allow 18-21 year olds to driver interstate trucks because there was such a shortage?

Check this out back in 1990 -

Supermarket News; 1/15/1990; Alaimo, Dan

Worsening Truck Driver Shortage Feared
A looming labor shortage, increased government regulation and aging fleets are major challenges facing transportation executives interviewed by Supermarket News. These factors will add costs and complications to their goals of productivity and efficiency.

Wetterau’s Kahn believes the height of the shortage is still a year away. “It will force a shakeout in the industry, but,” he added, “within four to six years, this problem will solve itself.”

I wasn’t driving back then, but as a consumer, I don’t remember any stores that were sitting empty because there weren’t enough trucks.

I firmly believe trucking companies and certain associations use these scare tactics so that they can convince the government in allowing them to import drivers to fix this “shortage”. These are called H1b visas and the technology fields have been trying to do something about them for years for the same reasons as trucking should be.

OOIDA came out with an “alert” advising members to take advantage of the current tight capacity. In other words – “Say NO to cheap freight”. Shippers will pay if they want their stuff shipped. Some international shippers are even shipping by air because of all the delays at the ports. This was back in 2002 -

The Oregonian (Portland, Oregon) (via Knight-Ridder/Tribune Business News); 11/1/2002

Byline: Boaz Herzog

Nov. 1–Beaverton-based Nike, already transporting high-end holiday merchandise by air rather than sea because of West Coast port delays, will continue the expensive adjustment for its spring goods.

Where there’s a will, there’s a way. If companies want good drivers they know what to do.

If there’s a recruiter that doesn’t understand this, contact me and I’ll explain it $$$.

Originally posted 2004-10-18 04:00:00.