The Tide is Changing

A good article from Milwaukee.

JS Online: Truck drivers needed all over

Trucking companies in Wisconsin and nationwide again are struggling to fill their rigs with drivers amid an expanding economy and strong demand for shipping.

That sounds reasonable enough from what we’ve been hearing. The answer to the problem is in the same article.

The current driver shortage still is a long way from sparking the run-up in wages seen in the 1990s. But pay, which stagnated beginning in 2000, is again on the rise, data from St. Louis brokerage firm A.G. Edwards & Sons Inc. show.

And here too -

Fueling the shortage, said A.G. Edwards analyst Donald Broughton, are two factors tied to the brightening economy.

First is the rising demand to move freight. Through April, tonnage carried by truck was up 7% over the same period in 2003 - very strong volume, according to Costello.

Second, the improving economy offers potential truck drivers other work opportunities. And to many, those are more attractive than a job that takes them away from home for long stretches.

“The minute the economy begins to heat up again, and they can get rehired at the plant or the construction job, they’ll go back to that,” Broughton said.

If trucking paid as well as the plant or the construction job, there would be no reason to go back. Except for the long hours and not being at home every night. Trucking will have to compete with other industries for people. Instead from the pool of unemployed, welfare and H1B immigrants.

Milwaukee’s Dawes Transport Inc. would add another 20 driver teams if it could. Marten Transport Ltd., a Mondovi-based refrigerated carrier with 2,300 drivers, could use another 50 to 125.

Granted, teams are tougher to find. I got a ‘team’ load last week, because they couldn’t find a team, they had to settle for a single. It still got there, a day later, but it was there. Especially with the changes in the HOS rules, teams are more valuable for coast to coast produce.

JDC Logistics Inc., a Franklin carrier, is bolstering its six-member recruiting staff with two new hires, one of whom will set up shop at an Indiana truck stop to try to lure drivers from other companies - a common practice in the industry.

It’s a common practice, which leads to the turnover problems companies have. If they paid BETTER WAGES they wouldn’t have to try and steal a driver that’s having a bad day.

Nationally, truck drivers of all experience levels averaged $43,000 last year, the ATA’s Costello said.

That beats the average annual pay for all U.S. workers of about $37,000. But truckers’ pay comes at a cost. Beyond the extended stretches away from home for many, a 1997 University of Michigan study found that the typical driver worked almost 3,000 hours a year - half again as much as an ordinary full-time employee.

Let me quote the same University of Michigan study that they quote. AGAIN. Okay, not the actual study, I do have the study on order from Amazon.com - Sailors of the Concrete, see my sidebar on the left. This is from an interview from Dr. Belman, the prof that did the study.

Will we see driver shortages again in the future?

Dr. Dale Belman: “Our research indicates that much of what’s been going on in the trucking industry in the past is more what we might call ‘churning.’ It’s not that there aren’t enough drivers, but that drivers aren’t staying with any given fleet very long.

“The result is that fleets are constantly losing drivers and constantly spending resources to recruit and train new ones. But what’s really happening is that their previous drivers are simply going to other fleets and their new drivers are coming from other fleets.

“If there truly were a driver ‘shortage,’ we would have expected to see wages rising and tractors sitting idle. And we really didn’t see that.”

Still, driver wages have gone up, haven’t they?

“They have, but not at a very high rate. While truck drivers earned three times the wages of fast food workers in the late 1970s, they now earn only twice what fast food workers earn.

“During the last recession, several of the largest trucking companies reduced the entry wages of truck drivers. This contrasts to most of the economy where wages don’t fall during recessions. There is even a famous economics book entitled Why Wages Don’t Fall During Recessions.

“Trucking has seen smaller wage increases than most of the economy, particularly the lower wage parts of the economy.”

Back to the original article.

So if demand for trucking continues to rise - and the ATA predicts it will - wages likely will have to rise, too.

Roehl boosted pay by 6% to 8% in February. Schneider raised pay around the same time to make up for drivers’ losses under the new federal work rules and is always considering compensation increases, Nightingale said. Marten Transport, which chairman and president Randy Marten said is among the country’s leaders on wages, is looking at bumping bonus pay.

Raising pay to make up for losses under the new rules, puts drivers back to the same place they were. Compensation increases are usually things like fuel bonuses, safety bonuses, longevity. But not the basic wages. Most bonus programs I’ve seen are unrealistic and are only handed out to a few. Raise compensation for detention on a dock, loading and unloading or layover waiting for a load. That’s where the real problem with pay is.