Drivers

There was once a time when private fleets had a clear advantage in the pursuit of hiring truck drivers. But the COVID-19 pandemic caused many disruptions in nearly every segment of the supply chain that we’re still feeling today.

Freight demand has been rising which means that equipment capacity and trained drivers are in high demand as well. But it’s not just high demand stretching available drivers thin, the trucking industry has about 80,000 fewer available drivers today compared to a year ago.

Even before the pandemic caused many older truckers to retire for health concerns, trucking was already dealing with issues of drivers retiring. According to the National Transportation Institute (NTI), retirement accounts for 54% of the driver shortage we’re facing today.

“These challenges aren’t entirely new, but the pandemic accelerated them,” said Jim ­VonAchen, director of transportation support for McLane Co., a major distributor of groceries and packaged goods based in Temple, Texas.

“There’s just a lot more competition in every segment of the freight and transportation business,” said Brian Johnston, senior director of transportation at Core-Mark International — one of the largest distributors of fresh food, snacks, and tobacco goods to the convenience retail industry.

The increased freight demand brought on by the pandemic isn’t the only factor in the increasing shortage of available driver though. Other factors contributing to the shortage are:

  • Truckers are retiring
  • Other industries are poaching drivers
  • The FMCSA’s Drug and Alcohol Clearinghouse makes it harder for cited drivers to move from one carrier to another
  • Limited seating capacity due to COVID-19 social distancing requirements means driver schools are graduating 30% to 40% fewer drivers

 

This means that private fleets will have to fight even harder to recruit drivers moving forward. Companies need to be more creative in what they are offering to drivers in order to get them to sign on – and stay on. Some companies are offering:

  • Increasing pay rate
  • Safety bonuses and recognition
  • More flexible work schedules, including shorter shifts
  • Programs targeting military veterans that utilizes their military training experience
  • Apprenticeship programs for warehouse workers to transition to driver positions

 

“Drivers want to feel that they are heard and will have someone who will listen and act on their concern,” said Jane Jazrawy, CEO of CarriersEdge, an Ontario, Canada-­based company that develops compliance and safety training tools for fleets. “They just don’t want to be referred to as a truck number.” That’s why, in the midst of this seemingly epic driver shortage, we’re actually seeing a dramatic increase in truck driver hires in the smaller companies.

Sources: FMCSA, QualifiedCarriers.com, Tucker Company Worldwide, Inc.

That’s why working with a smaller company, like ours, can help you stay a step ahead of the rest. It may sound like a cliché, but we value our employees, our customers and the drivers who are hauling our customers’ freight. It’s our goal to ensure that they feel like they are part of the Westgate family.

Westgate has always been committed to fostering long-lasting relationships with our carriers which, in turn, allows us to deliver the best quality services to our customers. See for yourself why businesses depend on us to improve their shipping processes. CONTACT US today!

Temperatures and Freight Costs Are on the Rise This Summer

 

According to data provided by Cass Information Systems (NASDAQ: CASS), freight costs saw a surge in June and are expected to continue to rise moving forward.

The expenditures component of the Cass Freight Index increased 56.4% year-over-year and was 11% higher than in May. In fact, compared to 2019, the expenditures index was up 27.9%

The difference in the year-over-year numbers has been greatly affected by a steep drop in demand due to world-wide COVID-related lockdowns during the same period in 2020. This trend of increasing rates will likely continue due to the widespread lack of drivers, warehouse space, and equipment like trucks and containers.

“Tougher comparisons in the coming months will naturally slow these year-over-year increases, but extraordinary growth rates will continue in the near term, driven by increases in both shipment volumes and freight rates,” Tim Denoyer of ACT Research explained.1

Many industry experts expect the capacity constraints to ease up in the near future as the driver employment rate increases in response to higher pay which should, in turn, change the trajectory of truckload rates.

“Even with material supply constraints, the freight cycle remains in high-growth mode, benefiting from a strong retail economy, tight inventories, and a persistent backlog of container ships anchored in the San Pedro Bay,” Denoyer said. He believes the industrial sector will begin to catch up to broader demand as “record capital goods demand and likely infrastructure programs” play out. 1

The current capacity backdrop could begin to loosen as transportation payrolls expand and extended unemployment benefits have already expired in some states. Additionally, waning stimulus payments and supply constraints (drivers, trailers, and chassis) are weighing on volumes.

Though 2020 was marked by low levels of supply and exceptionally high demand, these levels will not last indefinitely. As they say, the cure for high prices is high prices; the market will eventually correct itself.

 

 

Becoming a Truck Driver Looks Good Through Higher Pay Tinted Glasses…

 

Driver recruitment and retention remains the top priority throughout the trucking industry.

It’s estimated that more than 200,000 qualified CDL holders are not currently working due not only to the COVID-19 pandemic, but also increased compliance with the Drug & Alcohol Clearinghouse. Diminished driver school graduation rates, early retirements, and more than 75,000 Clearinghouse violations are also some factors for the reduced number of drivers.

Data shows that driver hiring conditions are getting better, according to Tulsa, Oklahoma-based software-as-a-service provider Tenstreet. A recent report from the company that helps carriers better recruit and onboard drivers noted a “positive driver hiring outlook on the horizon.”

There has been a “slow but steady climb back to January levels” the data shows, with the number of drivers filling out job lead forms and applications continuing to move higher. January is usually a busy month for activity as drivers tend to inquire about changing fleets or jobs at the beginning of each year.

“Overall, we’re starting to see the same general seasonal trend lines the trucking industry is used to, with applications taking a hopeful turn upward in May, which will ideally mirror 2019’s trend of an increase in applications over the summer and into the fall,” the report read.2

A press release cited support from customers and their understanding of “the growing needs of the market” as a catalyst for the pay raise.

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

SOURCES:
1. https://www.freightwaves.com/news/freight-costs-see-june-surge-tougher-comps-coming</a>
2. https://www.freightwaves.com/news/driver-employment-market-may-be-improving-amid-historic-pay-increases