As summer loomed, articles circled the internet about a company in Texas named Sisu Energy that was offering to pay $14,000 a week — or $728,000 per year — due to a nationwide shortage of drivers. The story even made its way to Newsweek. But the story was a bit misleading. For starters, Sisu Energy works with independent contractors who have special certifications to haul frac sand, a kind of sand used by fracking companies to blast oil and gas out of the ground.
This story was good news for owner-operators who had their own vehicles and the certifications to haul this specialized freight, but it may have set off a line of new stories about a driver shortage, whether or not this information was misleading.
So, is this the reality we are facing? Why is there a truck driver shortage? And is there truly a truck driver shortage plaguing the nation as some of these headlines would make it seem?
In short, it’s complicated.
The State of the Freight Industry Driver Shortage
The U.S. Bureau of Labor Statistics conducted a study in 2019 to look into the claims industry leaders were making that there was a shortage of drivers that could have impacts that rippled into many other parts of the economy.
When there are shortages like this, simple economics tells us that if there aren’t enough workers, those in charge need to raise wages to attract more workers and eat away at the shortage.
But after a thorough investigation, the Bureau of Labor Statistics found that the “driver shortage” isn’t exactly what it seems. Because the trucking industry is so intertwined and affected by external factors, whether that be shifts in types of consumer spending, natural disasters, or countless other forces, it experiences complex ebbs and flows. The term “driver shortage” is often used as a catch-all for nuanced industry issues. So, while there may be a real labor shortage some years, at other times “driver shortage” may be used to explain away larger industry problems. For example, David Correll, a research scientist at MIT’s Center for Transportation and Logistics, reported to the House Transportation and Infrastructure Committee that shippers’ and receivers’ scheduling practices may be leading to the appearance of a driver shortage. He argued that the underutilization of long-haul drivers leaves capacity on the table.
Another industry problem is drivers’ working conditions and compensation. For example, Michael Dow of Dallas, who spoke with the Wall Street Journal in that fear-inducing headline, “America Has a Massive Truck Driver Shortage. Here’s Why Few Want an $80,000 Job,” he admits that the life of a driver can be a hard one. However, he’s taken back some of his power and his earnings by becoming an independent owner-operator, starting a business with his brother.
Dow has been driving for over 20 years, and in that time, he calculated that when he finally stopped working for a large fleet, he was actually getting paid less than he did when he was just starting out, accounting for inflation. “The pay is so far behind the curve,” he said. “I make less money now than I did 20 years ago if you adjust for inflation and cost of living. I figured it out once, and I was making $14 or $15 an hour driving for the big carriers.”
Before, Dow was making $45,000 each year. But now? Dow shared, “I went out and started my own company this year. The rates have never been this good in over 20 years. I hope the driver shortage continues. Skilled drivers like me aren’t cheap right now. I’m anticipating I’ll make $85,000 to $120,000 this year.”
So, the reality? Drivers are in short supply right now. And working in the freight industry can be a tough life. But there are unique opportunities for drivers to make the most of this situation as well.
The Impact of the COVID-19 Pandemic
The COVID-19 pandemic took a toll on every corner of the U.S. economy, and the freight transport industry is no exception.
There have always been ups and downs in the trucking industry, but the COVID-19 pandemic only added to these challenges. The pandemic simultaneously sent demand for shipped goods through the roof — increasing the demand for qualified drivers — while also setting off a surge in early retirement — lowering the available pool of people ready to work.
In addition to early retirements, the pandemic also made it harder to bring on new drivers looking to access commercial driving schools to obtain licensure. Companies have offered better wages, signing bonuses, improved benefits, and more, but for those looking for simpler schedules and the chance to work for themselves, this has not proven to be an effective strategy. For many, this has only amplified the appeal of achieving owner-operator status.
The freight transportation industry has proven to be one of the most acute bottlenecks in the entire U.S. supply chain throughout COVID-19 so far, and while countless companies and markets were impacted, certain sectors were more affected than others as the result of delivery delays, including:
Gas and fuel
This shortage so impacted the supply chain that some recruiters working for freight transportation companies have started to look outside the country, connecting with potential drivers in Canada and some even as far as South Africa. However, with visa limitations and complex immigration rules, searching elsewhere has only proven to be mildly helpful.
Bloomberg reported that “the industry is seeking to lower the minimum age for interstate drivers from 21 to 18 and add freight transportation and commercial driving to the list of industries that can bypass some of the Department of Labor’s immigration certification process.”
A Desire for Better Circumstances
While the labor shortage isn’t as devastating as some news outlets make it out to be, it’s still a serious point of concern. What is causing these constraints on the labor force?
The need for workers is weighing heavily on both large and small carriers, and freight operators are scrambling to raise wages to get the drivers they need to stay on the road.
Eric Fuller, Chief Executive Officer of U.S. Xpress, the enterprise company of Xpress Technologies, shared that his organization has given 30 to 35 percent pay increases over the past year, but added that more raises may be needed to keep up with the shortage.
Figures from the Bureau of Labor Statistics showed that during the worst weeks and months of the COVID-19 pandemic, the freight transport industry lost a total of 6 percent of its pre-pandemic labor force. Before the onset of COVID-19, the freight transportation industry employed some 1.52 million workers, and as of July 2021, the sector has only recovered about 63,000 of those lost jobs; the labor force is short about 33,000 workers compared to pre-pandemic employment levels from February of 2020.
It’s hard to pinpoint a single reason or cause for this labor shortage. However, drivers are showing a strong preference for jobs and positions that allow them to earn more while also spending more time with their families. This may mean that jobs in manufacturing or construction may poach talent from the freight transportation industry. What’s more? Many workers may also be looking for safer jobs. Working in freight or driving a tractor-trailer is dangerous work. Truck drivers are ten times more likely to be killed on the job than other workers.
A Shortage of Long-Haul, or Over the Road, Truck Drivers
It’s true that on the whole, drivers for freight transport companies skew older. As reported by National Public Radio, the American Trucking Associations (ATA) shared that the real shortage is in long-haul trucking, or traveling long distances and across state lines.
NPR reported that “the government estimates that there are between 300,000 and 500,000 long-haul truckers in America. And according to the American Association of Motor Vehicle Administrators, state governments issue more than 450,000 new commercial driver’s licenses every year. A large fraction of those drivers enter the long-haul trucking industry.”
The average turnover rate for long-haul drivers is somewhere around 90 percent, and has been for decades. There are millions of workers who have been trained to operate heavy-duty vehicles, but they are not doing so because entry-level jobs just aren’t a good fit for them — the starting pay and conditions are less than ideal.
These figures demonstrate that it seems that for many, the interest is there, but the reality is not what workers had envisioned for themselves. At Xpress Technologies, we are seeking to empower drivers to run their own business, create their own schedules, and negotiate rates with transparency to eliminate some of these issues, all through the use of our mobile app.
Combatting the Truck Driver Shortage of 2021 and Welcoming New Drivers
The freight transportation industry is not the only market feeling the pinch of a labor shortage. The latest labor data from the U.S shows that “more workers are willing to walk away from their jobs or switch employment.” Last August there were 10.4 million job openings, and 4.3 million people left their jobs.
Despite companies across all sectors putting in the effort to attract employees, CNBC reported that “employment remains 5 million jobs’ below February’s 2020’s level.” This is holding back economic output and also increasing inflation pressures throughout the economy. Many older workers likely took an early retirement, while others are looking for higher-paying jobs and a better work-life balance.
Moving forward, enticing new drivers to take employment will be all about putting the power in their hands. At Xpress Technologies, our mobile app gives control back to small carriers and owner-operators, allowing them to be their own boss, create their own schedule, and manage their own business on the go.
Xpress Technologies: Your Freight Transport Partner
It’s true — to an extent — that there is an American truck driver shortage. But this shortage is more likely to impact workers at large, asset-based companies over independent owner-operators and small fleets of only a handful of vehicles.
Why is this?
Because what owner-operators value is the ability to run their own business and be their own boss.
At Xpress Technologies, when it comes to the semi-truck driver shortage, we’re listening and working for you. The Xpress Technologies App has been designed with the unique needs of owner-operators and small carriers in mind. Offering increased visibility into available freight, plus personalized recommendations catered to your preferences, owner-operators and small carriers like you gain access to scheduling options, optimized loads, and the chance to earn when and where you want. And when you prefer to speak to a real person, you can always talk to one of our brokers, too. Our goal is to make it appealing to join or stay in the industry and build your own company.
Be your own boss with the Xpress Technologies App, then connect with our Carrier Xperience Team today to discover for yourself how Xpress Technologies can help you manage your own business from the palm of your hand.
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