In The Driver’s Seat

Another report from the Financial Times:

“US long-haul trucking industry faces worst labour shortage: report”

“The US long-haul trucking industry is facing the worst labour shortage in its history, and the American Trucking Association estimates that the shortfall in drivers will increase fivefold to about 100,000 within a decade, according to a report in the New York Times.

“The article said the problem started in 2000 when average wages in construction and other blue-collar jobs exceeded those of long-haul drivers. The shortage of drivers is expected to intensify in the coming years with 219,000 of the nation’s 1.3 million long distance drivers, who’re aged over 55, likely to retire in the next 10 years.

“Apart from mounting a campaign to attract people into the business, many companies have started offering attractive benefits, such as stock options and health care packages to new recruits. In addition, the firms are also dishing out cash bonuses and attractive prizes to drivers who refer viable candidates.

“The report quotes Duff Swain, the president of the Trincon Group, a transportation consulting firm in Columbus, Ohio, saying that close to 10 per cent of major fleets were lying idle because of the manpower shortage.

“Mr. Duff warned that with 75 per cent of all goods being transported by trucks in the US, it was only a matter of time before the shortage causes delays in products hitting the shelves, leading to consumer prices increasing due to rising transportation costs.”

Sound familiar? Transportation authorities and consultants have been trying to get this point across for more than a decade, but except for some hand-wringing, next to nothing is being done to address this chink in the supply links armor. Here are a few thoughts from our December 23rd, 2004 “Merry Christmas” commentary:

“Let’s face it. Truck drivers are undeniably the most valuable asset we have in the logistics supply line. Regardless of the size advancements (?) made in container ships, the high-tech upgrades(?) in container yard operations, and the expanded railroad services throughout the country, all will be for naught if the drivers continue to leave the industry. No longer can we call upon nearby factories to provide goods for our consumption because we’ve allowed ourselves to be outbid by overseas manufacturing entities. In this country, because ports have taken the place of local manufacturing facilities as the sources of almost all our needs, drivers have necessarily become our lifeline. This link in the supply chain is the nation’s jugular. We may as well recognize that fact and do our utmost to keep it intact. Arterial, or venous, breakdowns tend to have an adverse and lasting effect on circulation. As examples:

– Last June and July there was a trucker stoppage in Miami. It didn’t seem like such a big deal at the time but the port still hasn’t fully recovered.
– Even though the seasonal vessel congestion in LA/Long Beach has subsided, transfers of containers by drivers from the terminal area to warehouse destinations are as much of a problem now as they were at the peak of the rush.
– In a survey conducted by Dr. Luiz Duarte and First Fleet Corporation, 77% of those polled said that a major shortage of qualified drivers is one of the most critical transportation issues.
– This year saw volume increases in the 10% to 15% ranges in U.S. ports, and the managing director of freight forwarder J.F. Hillebrand USA stated that this year’s port congestion was the worst he’s ever seen. 2005, according to all indicators, will see even greater volumes, yet drivers are leaving in increasing numbers.
– Harken back to what Paul Heylman said this past May about the situation. “The current economic model with drivers is probably not sustainable. Truckers are making practically nothing compared to the ILA and the ILWU.” [More than 300,000 applicants showed up to apply for a few thousand ILWU positions in LA/Long Beach late this year. The pay is good, that’s why. Can you imagine how many applicants would show up if a call were to be made for truck drivers in today’s scheme of things? None. That’s how many.]”

John Drewes of Devine International said, “This is the first time since I’ve been in trucking that I don’t see new drivers coming into the industry.”

The Teamsters’ Chuck Mack said a while ago, “Conditions are so bad that the turnover rate among these port drivers exceeds 150 percent per year as they cycle in and out of the industry … It’s perplexing why no one is stepping up to the plate. Everyone is afraid to make the first move.”

[That’s because no one in the industry is in a position to make the first move, Chuck. They wouldn’t know how. But our patented system gives us the know-how and, even more important, the determination to make that first move.]

Now that you’ve had a moment or two to browse through this website, how would you answer that question up above if we changed it around a little? Like this: “Can you imagine how many applicants would show up if a call were to be made for truck drivers … to operate from within our newly-designed port terminals, as year-round employees, and with start-up salaries of $ 75,000 annually?” No doubt you’d be pretty close if you came up with a number in that 300,000 range mentioned above.

As employees, rather than owner-operators:
– No longer would drivers have the responsibility of paying all the expenses related to truck ownership. They would be driving company-owned vehicles.
– Nor would they be required to jockey for position in long waiting lines at terminal gates. All trips would be scheduled days in advance, with a fair share of daytime deliveries.
– Nor would they fret about netting a decent weekly take-home pay … or getting a health insurance program for their families … or a guaranteed paid vacation every year.

[We’d get 300,000 applicants for sure.]