Coming up Short: The Impact of Driver Shortages on the Logistics Industry
By Len Batcha
Technical Transportation, Inc
Commerce is growing faster and more convenient than ever. Whether making personal purchases or ordering for an organization, customers have high expectations when it comes to transportation and delivery services.
With the rise in demand thanks in part to a booming economy and growing e-commerce infrastructure analysis by DAT Solutions reports that only one truck is available for every 12 loads that need to be shipped. More importantly, the supply of truck drivers in the U.S. has significantly dwindled over the last 15 years, with ATA claiming the driver shortfall could be as high as 50,000 jobs by the end of this year.
This significant driver shortage directly affects the logistics industry, especially with long-haul jobs, driving transportation costs higher. This means many companies are forced to raise their prices to offset the rising costs. Since more than 70 percent of U.S. goods are transported by truck, addressing this driver shortage is crucial for the future of the industry.
However, some changes in regulations and operational practices could alleviate some of the challenges in the short term future. Here’s how.
It’s no secret that too many regulations create barriers for people interested in pursuing a career in the industry. For example, the minimum age for drivers currently is 21, which means recent high-school graduates are ineligible to train and operate equipment. In addition, some eligible candidates are skeptical of the required electronic-logging device mandate put into effect in 2017. Meanwhile, strict regulations on a driver’s time on the road mean shorter runs, which are unappealing to many drivers hoping to maximize their pay or time away from families.
But working with the U.S. government to relax some of the current regulations — at least temporarily — could help get more people into the industry. Easing the age minimum and softening requirements for ELDs are two oft-discussed solutions. These moves would make it easier for logistics providers to attract and retain the talent they need in the short term.
Like logistics, the airline industry is facing a skilled worker shortage as its pilots reach retirement age. To ensure there is a pool of qualified individuals to replace them, airlines are recruiting high-school students and helping pay for their education and training, so they’re ready to take to the sky when the they complete their programs.
Since the average age of a U.S. commercial driver is currently 55 years old, the trucking industry can take a page from the airlines and recruit promising high-school graduates and reimburse for their educational programs and training.
Winning with Women
Currently, only 6 percent of drivers are women. This is a huge disparity for our industry, but it presents a tremendous recruitment opportunity. New technological advances make operating of heavy equipment more realistic for anyone, which means more women could get behind the wheel.
Staying Ahead of the Competition
The growth of the gig economy — Amazon’s ride share and Uber deliveries, for example — might be contributing to the logistics industry’s shortage. However, it’s important to note that many of these drivers aren’t qualified to handle logistics challenges such as proper documentation, quality compliance requirements, customer service and delivery operations services. What’s more, many customers feel more secure with established providers as opposed to delivery from unmarked, anonymous personal vehicles.
Communicating these differentiators with clients will be important.
Keeping an Eye on the Future
Some have suggested that autonomous vehicles might eventually serve as a solution for the lack of drivers. Obviously, this possibility is still a-ways down the road, as infrastructure doesn’t currently support these types of vehicles. And while autonomous vehicles might indeed be ideal for long-haul trips, there will always be a need for human intervention when it comes to verification of delivery, installation and getting the product user-ready.
In the meantime, though, while this shortage exists, non-asset-based logistics companies have the advantage. These companies often have access to a host of providers and aren’t weighed down by these shortage issues internally. They can instead find the right partners and shop around to secure best options to minimize costs.
If you have any questions or would like to learn more about our shipping services, feel free to contact us today.