The Truck Driver Shortage Doesn’t Exist. Saying There Is One Makes Conditions Worse for Drivers
As the U.S. contends with supply-chain problems that could make holiday shopping harder, one explanation comes up again and again: The country doesn’t have enough truckers. “The Biggest Kink in America’s Supply Chain: Not Enough Truckers,” a New York TimesStory read this week. What about all the truck drivers? A Wall Street Journal headline from the previous week stated that shortage causes delays in delivery.
It is not difficult to find people interested in truck driving. There are also plenty of CDL holders.
Stories cite an American Trucking Association report that states the industry has 80,000 drivers short. They also quote experts who claim the shortage is due to a dearth of qualified people willing to do these challenging jobs. Yet, in California alone, there are 640,445 people who hold active Class A and Class B commercial driver’s licenses, according to the Department of Motor Vehicles. Meanwhile there are only 140,000 “truck transportation” jobs in the state, according to the state Employment Development Department.
Those numbers speak to the fact that there are hundreds of thousands of people who become truck drivers every year—some with their training subsidized by the government—only to find that the job pays much less than they’d been led to believe, and that working conditions in the industry are terrible.
There are too many truckers!
There’s no trucker shortage; there’s a trucker retention problem created by the poor conditions that sprung up in the industry in the wake of 1980s deregulation. At the end 2020, 92% of truck driver turnover in fleets that have more than $30m in annual revenue was recorded. This means roughly 9 of 10 drivers won’t be employed by such a company for at least one year.
“There’s no shortage of workers, that’s the narrative that gets propagated by industry leaders,” says Mike Chavez, the executive director of the Inland Empire Labor Institute, which is working on a partnership to create better recruiting and retention programs for drivers. “We still have a lot of positions that can’t be filled because of the working conditions.”
According to the Bureau of Labor Statistics 1.5 million truckers were employed last month. That’s just 1% less than October 2019 and 15% more than a decade earlier. That’s a faster growth rate than overall nonfarm employment, which is still down 2% from October 2019 and up only 12% from a decade ago.
Sunny Grewal of Fresno (Calif.) says that truck drivers are in such high demand right now that they can be pitted against each other to worsen their conditions. Grewal (32 years old) has been driving since 2010. He owns a refrigerated truck which he hauls vegetables and fruits. It costs him $1.75 to $2 to drive a mile empty, so any job that pays less than $3 a mile isn’t worth it, he says. As brokers are seeing more drivers searching for work, they tend to post less-paying loads and require a lot more unpaid waiting. “If they know there are a lot of carriers, they treat you like crap,” Grewal says.
He’s recently gotten jobs hauling loads of produce, only to arrive and be told the produce hasn’t even been picked from the field. He has to wait until it’s picked and packaged, and doesn’t get paid for the first four hours he waits. There have been times when he’s waited 27 hours to pick up a load. Truckers earn per mile, which means that all the waiting can lead to lost income. Federal regulations limit truckers’ ability to drive only 11 hours per 24. He only gets paid $150 for a “layover day,” which is a day spent waiting. He can’t tell brokers he doesn’t want to wait around, because they’ll find someone who will take the load, especially because rates are high right now.
“If I refuse it, someone else will take it,” he told me.
There are other frustrations—even when he has to wait for hours outside warehouses, he’s not allowed to use their bathrooms, and he can’t leave or he’ll lose his place in line. Government regulations mandate that he takes a break every 14 hours (and can drive 11 of those 14 hours), there aren’t enough places where he’s allowed to park his truck and sleep. The lack of truck parking has been a problem for truckers all across the nation. Grewal is shaken to read about the deaths of truck drivers in remote places.
All Things Have Changed With Deregulation
It’s hard to imagine another profession where people don’t get paid for hours they spend at work—unless it’s gig economy jobs where Uber drivers don’t get paid for the time they spend waiting for a passenger to order a car. According to Steve Viscelli (sociologist at The University of Pennsylvania, author of “The Problems in Trucking”, some of these problems resulted from the shift in trucking from being a stable, high-paying job to gig work in 1980s. Big Rig – Trucking and the Fall of the American Dream
Trucking was once regulated by the government. This meant that only few businesses could transport freight along certain routes and at specific rates. Now, anyone who has a motor-carrier authority can do anything. Union rates and wages fell as more trucking companies entered the industry after deregulation. He says that total employee compensation in over-the road trucking fell by 44% between 1977-87. Viscelli states that while drivers are now paid around 40% less today than they were in late 1970s, they still produce twice as much.
Grewal discovered that truck drivers have become gig workers. The inefficiencies within the supply chain make the job even worse. “So much of this is about the inefficient use of time. Are there shortages of truck drivers? Most likely not. But they are certainly being used less and less efficiently,” Viscelli says. “That’s the long term consequence of not pricing their time.”
Ironically, the louder the narrative becomes about the “shortage” of truck drivers, the more resources pop up to funnel people into driving. The trucking industry estimated that it required 450,000 drivers in 1990 and warned about a shortage. In 2018, the industry stated it had 60,800 drivers, before the pandemic.
Continue reading:The Supply Chain: How American Shoppers Defeated the Suppliers
The government paid more for truck driving schools during the pandemic. California provided $11.7million in funding for truck driving schools in 2020. This figure is up from $2.4million in 2019. The majority of the funds came from the federal Workforce Innovation and Opportunity Act. Recent legislation passed infrastructure bills that include initiatives to increase trucking employment, such as creating an apprenticeship program to allow drivers younger than 21 years old to be employed in interstate commerce. But the vast majority of the people who pay for truck driving school don’t end up becoming truck drivers.
“Every Monday, they’ve got 100 new people they’re going to put through orientation, and in three months, less than half of them will be in the industry,” says Desiree Wood, the president of REAL Women in Trucking, a network that provides resources and support to female drivers.
Debt – Driving up debt
Many people take out debt to get a CDL, or enter into what Viscelli calls “debt peonage”—essentially going to school tuition-free but promising to work for a certain trucking company to pay off their debt. Wood says that getting your CDL does not mean you are done. Most drivers need to continue their training after they have received their CDL. This is where they work with another driver to learn the skills of driving and managing a truck on the roads. These other drivers are often not specialized trainers—sometimes they only have a little more experience than the newbie driver. These drivers are especially harmful to women who have often filed claims about sexual abuse by their partners. They decide whether the driver is allowed to drive. CRST long haul trucking settled a May lawsuit brought by a victim who claimed she was raped, terminated and then billed $9,000 by her trainers.
It’s during this stage that many people drop out, either because their trainers aren’t helpful, or they get intimidated by ice on the road, or because they’re not making much money as a team driver. Long-haul trucking companies often move large amounts of freight via student-driver partnerships such as these. Students who quit are no problem, as the company has many trainees that they can sub in. The myth of a shortage of truckers feeds into the industry. “Over-recruiting is the biggest part of the problem,” says Wood.
The trucking industry blames trucker shortages for causing supply chain issues. This allows trucking companies and their employees to continue to work, while students realize trucking is not an attractive profession.
“We need to find ways to attract, recruit and retain drivers,” said Gene Seroka, executive director of the Port of Los Angeles, on a call about supply chain backlogs last month. “ We’re gonna have to think about new compensation models, benefits packages, etcetera. We want to make this a profession that folks want to come to.”
Companies that pay their workers well are more likely to retain truck drivers. Turnover at “less-than-truckload” fleets, where drivers can make $100,000 a year moving loads to local terminals where they are picked up by long-haul truckers, was just 14% in the same period that the overall industry experienced 92% turnover. Viscelli states that many of these drivers have unionized and are working jobs comparable to those they had prior to deregulation.
Of course, it’s not easy for trucking companies to just pay drivers more. If they tell a major retailer like Walmart that they’re raising the cost to haul a load, Walmart will only find a trucking company that can do it for cheaper. And trucking companies are dealing with many of the hardships of the supply chain backlog—they told me that they can’t get appointments to pick up or drop off containers at the ports of Los Angeles or Long Beach. Any increase in costs will be charged to the cargo owners whose stuff they are hauling—and likely passed onto consumers.
California’s landmark AB5, which would reclassify truck drivers from independent contractors to employees could force the system to become more efficient. Truck driving companies were strongly opposed to this law. The Supreme Court will decide whether it is up for challenge.
In the meantime, says Grewal, there’s another way in which the supply chain shortages are making it harder to be a truck driver. The cost of truck has risen. He’s seen refrigerated trailers like his go for $100,000, 30% more than a year ago; dry vans—semi trailers enclosed from outside elements—have doubled in price, from $35,000 to $70,000. That means many would-be professionals who buy trucks after hearing that there’s a driver shortage will be hurting even more.