Overdrive Magazine

April 2019

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26 | Overdrive | April 2019 A study published by the U.S. Bureau of Labor Statistics concludes that there's little evidence supporting the widely publicized notion of a serious truck driver shortage. Any perceived shortage is isolated to long-haul truckload fleets and doesn't appear to meet economists' definition of a true market shortage, argues the study from BLS, the U.S. Department of Labor's research wing. The issue is more one of driver retention rather than a shortfall of people willing to work as truck driv- ers, says the study, "Is the U.S. labor market for truck drivers broken?" It was written by Stephen Burks, an economics professor at the University of Minnesota Morris, and Kristen Monaco, a BLS associate commis- sioner. "As a whole, the market for truck drivers appears to work as well as any other blue-collar labor market, and while it tends to be 'tight,' it imposes no constraints on entry into (or exit from) the occupation," says the report's summary. "There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price (wage) signals in the standard way." The authors cast blame for persis- tent claims of a driver shortage on consumer and trucking media, as well as on trade associations, notably the American Trucking Associations, which routinely declares shortages in the tens of thousands of drivers. However, ATA Chief Economist Bob Costello says the report's authors "demonstrated some basic misunder- standings about the trucking indus- try generally and how we at ATA and in the industry discuss the driver shortage." Overdrive has been something of an outlier among consumer and trucking trade press coverage of the topic, casting doubt on the notion most prominently in the 2016 "Driver Shortage Alarm" cover story. Also, the Owner-Operator Independent Drivers Association last month issued a report arguing the driver shortage is more myth than reality. OOIDA says that growth in both the number and the size of small fleets has prompted greater competition for drivers, making it harder for larger fleets to recruit and retain them. Costello says the BLS report disre- gards ATA's arguments that the driver deficit is about a dearth of "qualified drivers," not a shortage of applicants. "There are many barriers to entry for new drivers — age requirements, CDL testing standards, strict drug and alcohol testing regimes and, perhaps most importantly for many fleets, safe and clean driving records," he says. The BLS study asserts that higher driver pay could help solve recruiting and retention woes. "Higher earnings in truck driving increase occupa- tional entry," the report states. Costello says, "The authors' own concession that wages are going up significantly, as motor carriers are unable to hire quality drivers, under- cuts their own conclusions. This alone suggests there is a systemic issue with getting enough labor in the for-hire truckload driver market." The study covers labor data between 2003 and 2017. Trucking's numbers were compared to those of other industries, such as construction and manufacturing, that compete with trucking for labor. Truckers earn more than workers in those industries, which provides some sta- bility to trucking employment, the report finds. Drivers are likely to move between industries for better money, but surprisingly, truckers move between occupations at a lower rate than workers with similar education lev- els, the report's authors say. "This suggests that, in aggregate, the labor market for truck drivers works about as well as the labor markets for other blue-collar occupations." Study casts doubt on 'driver shortage' BY JAMES JAILLET ANNUALIZED DRIVER TURNOVER at truckload carriers with more than $30 million in annual revenue sank by 9 per- centage points to 78 percent in the fourth quarter of 2018, says the American Trucking Associations. Carriers with less than $30 million in revenue saw turnover rise by 5 percentage points to 77 percent. ELECTRIC VEHICLE MAKER Tesla announced that in exchange for nearly 50,000 shares of Tesla stock, worth about $13.8 million, the company had acquired portions of Central Valley Auto Transport's car-hauling fleet. The acquisition is intended to help hasten Tesla's Model 3 sedan deliver- ies, which have been delayed. LARGER CARRIERS turned to small fleets and owner-operators, or "purchased transpor- tation," to handle the huge influx of freight demand through most of 2018, according to earnings reports from publicly traded compa- nies. Landstar spent $3.57 billion in 2018 on its approximately 10,000 owner-operators, compared to $2.8 billion the prior year. Max Heine The stress of encountering highway gridlock, among other downsides of professional driving, is one of many factors that affects the size of the labor pool and puts upward pressure on compensation.

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