Trucking industry experts weighed in during a debate Wednesday at FreightWaves’ F3: Future of Freight Festival on the controversial subject of whether there is a driver shortage or a driver retention problem.
The debate, moderated by Timothy Dooner of FreightWaves’ WHAT THE TRUCK?!?, featured Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association, and John Larkin, strategic adviser for Clarendon Capital, a private equity firm.
Pugh, representing OOIDA, a trade association with over 150,000 small-business carriers and professional drivers in the U.S., said the driver shortage is a myth perpetuated by the American Trucking Associations (ATA) and its large fleet members.
“If you think there’s a shortage, explain to me why there’s 400,000-plus new CDLs issued in this country every single year. Where do all these people go?” Pugh said. “We have a driver turnover problem with over 90% turnover in the long-haul trucking industry. That means there’s carriers out there operating with far over 100% turnover. Now, as we look at our own businesses, how could we survive if we’re turning over 100% of our staff? It’s crazy, but trucking companies continue to do this. Why? Because it brings down wages, it keeps costs low.”
Dooner added that the ATA has lowered its perpetual driver shortage number from 81,000 down to 60,000 over the past three years.
Larkin agreed with some of Pugh’s points, stating that there isn’t a driver shortage in the industry right now as rates have been flat during the freight recession that has lasted for over two years. He added, however, that large fleets could struggle to find drivers over the next few years if economic conditions improve.
“There’s a very good chance in 2025 and 2026 that we’ll get the economy rolling again,” Larkin said. “Freight will start to pick up. We’ve got the nearshoring phenomenon. We’ve got the manufacturing automation phenomenon, and I think that will drive a lot more freight and will tighten up supply and demand, at which point the big carriers, as they have in the past, struggle to recruit and retain drivers.”
Both speakers agreed that truck driver pay remains stagnant, which is forcing many drivers to leave the market and seek employment elsewhere.
“We hear all the time that truckers can make $50,000 in an entry-level position. That seems like not a bad wage for somebody with a high school education or something. …[B]ut let’s think about that. Truckers don’t work 40 hours a week. They work 70 or they work 80. They also work in an occupation that is controlled by hours-of-service [rules] by the federal government, but yet they receive piecework pay by the mile. They don’t get paid overtime. They’re actually exempt from overtime.”
Shippers’ demands for low rates make it difficult for large fleets to increase pay for drivers, Larkin said.
“I would tell you there is definitely a shortage, even today, of adequate pay and benefits for drivers, and we can thank the shippers for that, who beat down prices, making it uneconomical for carriers to survive if they pay their drivers what they’re worth,” he said. “We need higher driver pay. There’s no question about it.”
A guest and truck driver, Justin “Super Trucker” Martin, asked what’s next for the ATA in its quest for more drivers. He mentioned the ATA’s efforts to increase its driver pool for fleets by recruiting military veterans and encouraging drivers from overseas to apply for truck driver jobs in the U.S. Lastly, he mentioned the ATA’s push for an apprenticeship pilot program with the Federal Motor Carrier Safety Administration, which is underway, to put drivers as young as 18 behind the wheel of 80,000-pound tractor-trailers.
Larkin addressed the question of safety and risk exposure for fleets regarding lowering the age from 21 to 18 to get a commercial driver’s license through FMCSA’s Safe Driver Apprenticeship Pilot program.
“At the end of the day, it’s all about risk management from the carriers’ perspective,” Larkin said. “The prefrontal cortex development doesn’t allow 18-,19- and 21-year-old drivers to make good judgments. So, I don’t think that’s going to really gain much traction.”
Pugh agreed.
“This whole notion of bringing 18-year-olds into the industry and just letting them run all over the country, though, I think is crazy,” he said.
Larkin addressed Martin’s question by stating that ATA’s efforts have resulted in an oversupply of people entering the industry, which becomes a turnover issue more than a driver shortage problem.
“Because of the oversupply, it tends to depress the driver pay, which generates the turnover, because drivers are willing to hop from carrier to carrier for an extra penny a mile, an extra 2 cents a mile, and that’s really the core of the problem,” Larkin said. “The turnover issue is incredibly expensive. Carriers will spend $2,000 to $3,000 just coming up with one hire, just on the recruiting side, and then there’s another $4,000 or $5,000 to train that person, and then they leave three weeks later and you’ve got to go find somebody else and spend that $8,000 all over again.”
Asked if there’s a driver shortage, Martin, who started his truck driving career in 2008, said, “There never has been. There never will be.”
Pugh said paying drivers more would reduce large fleets’ exorbitant recruiting costs to hire more drivers amid turnover.
He pointed to driver pay studies by the National Academies of Science and the U.S. Department of Labor, which stated that increasing drivers’ wages leads to less turnover in the industry, but that large fleets lower pay for drivers when shipper customers demand lower rates.
“The people who suffer are the drivers,” Pugh said.
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