Posted on 02/11/2008 5:33:39 PM PST by 2ndDivisionVet
A conspicuous shortage of truck drivers is creating a Catch-22 of sorts for the trucking industry, according to recent comments by carrier executives.
On the one hand, a lack of drivers is restricting the ability of trucking companies to expand and meet current freight volumes. Yet that same lack of drivers results in tight capacity, which is allowing fleets in many cases to get higher rates from customers and reject unprofitable business.
"Our results for the quarter were assisted by a favorable relationship between freight demand and truckload capacity," said Steve Russell, chairman & CEO of Indianapolis-based truckload carrier Celadon Group.
"We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers," he continued. "Assuming a continuation of the current freight environment, where growth in freight demand has exceeded increases in truckload capacity, we believe there will be opportunities to continue to raise freight rates faster than cost increases. Consequently, we continue to be confident in our ability to move to a 90% operating ratio or better."
"A solid U.S. economy and a favorable relationship between shipping demand and truckload capacity contributed to a 5.9% increase in our average revenue per loaded mile," noted Kevin Knight, chairman & CEO of Phoenix-based Knight Transportation.
"Solid productivity, improved fuel surcharge collection, and constant focus on expense control more than overcame cost increases relating to higher prices of revenue equipment, higher diesel fuel prices, declining fuel efficiency due to emissions control regulations, and increases in driver compensation," he added.
"Customer demand for our services continued to be strong," said Randolph "Randy" Marten, chairman and president of Mondovi, WI-based refrigerated carrier Marten Transport. "The combination of solid freight demand with limited industry-wide capacity and strong freight selection by our sales and operations team contributed to a 6.6% increase in our average freight revenue per total mile."
Still, the growing lack of drivers is causing fleets a variety of headaches - especially in terms of the bottom-line impact.
"The limited availability of experienced drivers continues to challenge the trucking industry," said Russ Gerdin, chairman & CEO of Coralville, IA-based Heartland Express. "We recently announced a driver pay increasa result our most senior and experienced company drivers will be earning 50 cents per mile while our owner-operators will be earning a base rate of 95 cents per mile by the end of 2006."
Marten Transport reached even deeper into its wallet to try and shore up its driver base by making a big equipment purchase at the end of 2005.
"After evaluating our expectations for customer demand, the continued attrition of owner-operators from our industry and our ability to attract and retain company drivers, we decided to take delivery of 246 tractors during the fourth quarter last year, more than half of the increase for the entire year," said Randy Marten. "But we believe that continuing to increase our capacity is important to major customers, and we wanted to make sure that we were prepared to grow with our customers in 2006."
"The driver recruiting and retention market remains more challenging than ever," said Clarence Werner, chairman, president & CEO of Omaha, NE-based Werner Enterprises. "The supply of qualified truck drivers continues to be constrained due to alternative jobs to truck driving that are available in today's economy. Yet we believe that a solid freight shipping market.. combined with extremely tight truck capacity is [maintaining] a strong freight market."
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You just made one long lobby for the industry. The wait time and layover time are the big problem with drivers. Pay drivers an hourly wage and you will see freight move a hellava lot faster.
When I do stop at a truck stop, it’s usually just to fuel up and get out of dodge. If you ever saw some of the nonsense going on in the lots, you’d do the same.
Some aren’t bad though and in those I’d stop for a meal and some downtime, but most are simply objects soon to be in my mirrors.
When I do layover, I typically just spend the night in the customer’s locked yard. I have keys/combo’s to get in and out and they actually like the fact that someone they trust is on the property. I get peace and quiet and they get a night watchman.
Shoot-I might think about driving a truck, but I’m married with kids and I can’t even parallel park, so that’s another real good reason I have no business even thinking about it!
Doesn’t sound too terrible. Hubby used to be a trucker.
Didn’t coplain so much about the money as no sleep and bad food.
What a bunch of BS. You know better than that or you live in a bubble.
Pay shortage? At 50 cents per mile and 55 mph, Heartland is paying their experienced drivers $27.50 an hour. How much do you reckon they’ll have to pay to attract enough drivers?
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It ain’t that simple! You sound like the people who used to ask me what the hourly rate was to work on an offset press back in the late seventies when I was still an employee of the manufacturer. When I told them forty dollars an hour (roughly) they started railing about all the money I was making. I was actually working for less than $300. a week.
I am not a truck driver but I have had a lot of conversations with drivers. Most of them probably earn a little more than they could doing something else but they are not all buying castles and yachts by any means. It is a tough way to make a living unless you are among the small percentage of people who like life on the road. For many it is almost like the military life, it takes up 24 hours of every day. I spoke to one driver in February once and he said that he had not been home since Thanksgiving.
Actually, I do know of at least one company that pays by the hour, most of their hauls have been one day out and back and as of a couple of years ago the drivers were being paid fifteen dollars an hour to drive old, uncomfortable day-cab trucks and they were not paid overtime rates, just straight fifteen dollars an hour regardless of hours and most days were well over eight hours.
Hell, I make that part time mowing lawns... And I don’t have to go to New York!!!!!!!!!
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Some people apparently didn’t get the memo about what happened to the dollar. Thirty five thousand a year now will buy perhaps slightly more than minimum wage would buy when I got my hohorable discharge in ‘65.
It sure puts you through some mental changes doesn’t it?
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Don’t it? I went from running my own business where I was the man and very well respected to looking for a job when technology changes killed the business. Nobody cared what I could do and they still don’t, I finally took a warehouse job and because I worked so hard I wound up with plenty of responsibility and the same pay as the slackers. I filed for Social Securit as soon as I turned 62 and quit. I am now back working part time in the same warehouse but it is totally different, I get to do the easy part of the job and let the full-timers have all the headaches and I earn more per hour than I did when I was full-time. I don’t have to work any more but it is nice to have a little pocket money. It is disgraceful though to see how much ability is wasted because nobody wants to hire people over 45.
“If we had any brains, we wouldn’t have abandond our rail lines. We should have built more.”
Yeah, but it was good for business for the public to subsidize their shipping costs, not to say eliminate warehousing, by moving everything on to the highways. Ask just about anyone who has done an analysis of the costs and they’ll tell you, even with all the fuel taxes that they pay, that the trucking industry doesn’t pay for the costs it imposes on the public (in wear and tear to the roads, and congestion requiring more road capacity).
There are quite a lot of unlicensed, undocumented people who would be happy to take those jobs.
Item #2 is particularly important, because it explains why so many route-miles have been abandoned over the years. Very few railroad lines can accommodate the type of train speed and time requirements that are needed for this kind of rail service to compete with trains, so the railroad industry has concentrated most of their service on those few lines even as it has abandoned many others.
The reality is that freight movement in the U.S. is highly efficient from a transportation mode standpoint. The trucking industry carries very few loads that could easily be accommodated on trains, and vice versa.
This perception might be accurate for old, independently-owned locations in older urban areas (mainly in the Northeast), but it sure isn't the case nationwide. Some of these places are unbelievable, especially the ones owned and operated by the reputable national chains.
Anyone who travels in southwestern Pennsylvania should stop by at the new TA (TravelCenters of America) location in Breezewood (it's right at the point where I-70 meets the Pennsylvania Turnpike). If I blindfolded you and took you in there without telling you where you were, you'd probably swear you were in a brand-spanking-new food court in a pretty high-end shopping mall.
Over time, these truck stop chains have adopted the business models and characteristics of their parent companies -- and it's pretty remarkable to see how they vary once you understand the business. Pilot, for example, is a national chain that is a subsidiary of Marathon Oil Company -- so these locations are very heavily focused on selling large quantities of fuel on a site that is as small as possible. This is why Pilot locations sell their own brand of fuel rather than franchising their fuel sales out to "name" brands, and why Pilot locations typically have very robust fuel operations, relatively smaller truck parking lots, and relatively fewer on-site amenities than their competitors.
TravelCenters of America (the famous TA brand -- formerly Truckstops of America), on the other hand, is almost the exact opposite. That company is owned by Hospitality Properties Trust, a real estate investment trust (REIT) that focuses on travel-oriented properties such as fast-food restaurants, hotels, etc. So their focus is mainly on providing a very high level of amenities to all kinds of travelers on the highway system (not just truckers -- which is why they changed their name from Truckstops of America to TravelCenters of America).
The "Taj Mahal" of truck stops is the world-famous Iowa 80 location (part of the TA chain) just west of the Quad Cities area in eastern Iowa -- which proclaims itself as the largest truck stop in the world. It has parking capacity for about 900 trucks on site (there are probably no more than a half-dozen truck stops in the U.S. with even half that many spaces), and houses not only the kinds of amenities typically found in large truck stops, but also a 50,000 square-foot retail store for road travelers (it's big enough that they roll a show truck in there every now and then), and even doctors' and dentists' offices.
Hi David, I am still young, but all these stories about older folks being shown the door in their mid-50’s scares me. I’m struggling just to pay rent in San Jose, and hoping that housing prices drop to the point where I can afford one. Funny how a computer engineer with a master’s degree in computer science has to struggle in Silicon Valley.
I actually listened to your show on KLIF back in Fort Worth before my parents moved us out to Monterey. I had to have been 7 or 8 years old. That was over 20 years ago now. I was surprised to hear you on the weekends here on KSFO—more that people could survive for over 20 years in the radio business than anything else :-).
What seriously needs to happen in this country is for the government to protect our labor from countries who don’t protect their own. I’m pretty sure we don’t want to live like the poor of India and China, but instead of lifting them up, the competitive market and US trade agreements bring our own workers down. The federal government has to realize that this country is in competition for business with other countries and Ireland and Singapore will actually give businesses incentives and tax breaks while the US hands out more red tape. Much of what the country regulates tends to hurt families just starting out in favor of established workers. Prop 13 has the effect of shifting the burden from more established people to the ones just starting out trying to afford a home that his older neighbor could never afford in today’s market. It’s like the boomer generation climbed the ladder and then took a saw to it for generation X and Y.
Just call a Mexican.
I have been really blessed. Doing what I do for thirty nine years. Conservative before conservative was cool. But, radio, as we know it, is in deep trouble. Syndication is our outsourcing. Local shows simply too expensive to justify.
The age thing is real. However, there are some employers that realize maturity and experience is a plus. They will become more numerous as baby boomers leave the workforce.
Your points on foreign competition are spot on.
Keep listening Sundays.
Drivers last on average about a week.
Or when the driver has to unload the truck by himself.
Bingo! I’m not a class A trucker, but I’m a Schwan’s guy and the DOT regulations really make it tough on us.
I can’t really argue with what you’ve stated - though I run the northeast and see those old run-down truck stops all the time.
I’ve made quite a few runs out to southwestern PA and have stopped at the TA you mentioned. Yes, it’s nice, but it’s still a matter of finding parking (at times) and you still find the usual troubles in the parking lots. That isn’t going to go away - as the truckers bring them in.
I don’t like Pilot at all; too many drivers fuel up, leave their truck at the island, and go in to get something to eat. Meanwhile, you’re waiting in line for the fuel pump to come open. Time is money and I don’t have time to wait 40 minutes cause some idiot was too lazy to pull his truck out of the way.
I have my favorite places to fuel up, eat (when I don’t’ take my lunch/dinner)and, on occasion, sleep when needed. Very few of those are truck stops; too many idiots playing too many games. It only takes one idiot to open one of the valves on my tank and the whole place is shut down for hours on end (and I’ve had a real bad day).
Mine is a different business from most other trucking jobs; weight is extremely important so I usually buy fuel every day - just enough to get me back home so I can fuel up in the morning. I generally don’t make really long trips; usually only 2-300 miles out and back, so careful planning avoids most of the pitfalls found in truck stops.
Back in the day, when I hauled freight (reefer and box) I ran all over the place, so I had to make use of the truck stops. It’s different now, so I choose not to stop if I don’t really have to.
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