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$70,000 For A Part-Time Driver: Delivery Companies Desperately in Need of Truck Drivers
Nation and State ^ | 05/02/2021 | John Kingston of Freightwaves,

Posted on 05/02/2021 7:52:43 PM PDT by SeekAndFind

David Parker is the CEO of Covenant Logistics and he was blunt with analysts who follow the company on its earnings call Tuesday.

“How do we get enough drivers?” he said in response to a question from Stephens analyst Jack Atkins. “I don’t know.”

Parker then gave an overview of the situation facing Covenant, and by extension other companies, in trying to recruit drivers. One problem: With rates so high, companies are encountering the fact that a driver doesn’t need to work a full schedule to pull in a decent salary.

“We’re finding out that just to get a driver, let’s say the numbers are $85,000 (per year),” Parker said, according to a transcript of the earnings call supplied by SeekingAlpha. “But a lot of these drivers are happy at $70,000. Now they’re not coming to work for me, unless it’s in the ($80,000s), because they’re happy making $70,000.”

Seasonally adjusted long distance truck drivers. Source: BLS To learn more about FreightWaves SONAR, please go here.

What’s happening, he said, is that drivers are looking at the fact that they can make $70,000 “and stay home a little more.”

The result is a tightening of capacity. Parker said utilization in the first quarter at Covenant was three or four percentage points less than it would have as a result of that development. “It’s an interesting dynamic that none of us have calculated,” he said.

To put the numbers in perspective, Todd Amen, the president of ATBS, which prepares taxes for mostly independent owner-operators, said in a recent interview with the FreightWaves Drilling Deep podcast that the average tax return his company prepared for drivers’ 2020 pay was $67,500. He also said his company prepared numerous 2020 returns with pay in excess of $100,000.

Parker was firm that this was not a situation likely to change soon. “There’s nothing out there that tells me that drivers are going to readily be available over the medium [term in] one to two years,” he said. “And that’s where I’m at.”

Paul Bunn, the company’s COO and senior executive vice president, echoed what other executives have said recently: Additional stimulus benefits are making the situation tighter. He said that while offering some hope that as the benefits roll off, “that might help a bit.”

But what the government giveth the government can sometimes taketh away. Bunn expressed another familiar sentiment in the industry today, that an infrastructure bill adding to demand for workers would create more difficulty to put drivers behind the wheel. Construction, Bunn said, is “a monster competitor of our industry” and if the bill is approved, “that’s going to be a big pull.”

Labor is going to be a “capacity constraint” through the economy, Bunn said, while conceding that trucking is not unique in that. And because of that labor squeeze, capacity in many fields is going to be limited. “The OEMs, the manufacturers are limited capacity,” Bunn said. “They’re not ramping up in a major, major way because of labor, because of commodity pricing, because of the costs.”

All that means is that capacity growth is going to be “reasonable,” Bunn said. “It’s not going to be crazy, people growing fleets [by] significant amounts.”

“It’s all you can do just to hold serve,” he added.

While the driver situation is tough, it didn’t notably hurt the first-quarter performance of Covenant. To open the call, Joey Hogan, Covenant’s co-president, highlighted some of the company’s first-quarter numbers: a 6% growth in operating revenue on a strategic reduction in the number of company tractors and the best first-quarter net income figure in its history.

Beyond the market for drivers, Parker said the freight market is “hot” and likely to stay that way.

“We are at 7%, 8% GDP growth, that goes to 5%, well, probably, or it could stay 7% or 8%,” he said. “But it’s still going to be numbers that you and I have never sensed or felt from a freight standpoint. And so I don’t see that letting up, I see that a solid couple of years of being in that kind of environment.”

Given that, Parker and other Covenant managers used the occasion of the earnings call to drive home with more detail a point the company made in its earnings statement a day earlier: It intends to get higher rates out of some of its Dedicated customers. While the company’s Expedited division saw its operating ratio improve to 91% from 102.3% a year earlier, the Dedicated division saw its OR remain above 100%.

The Dedicated division, Bunn said, has two types of customers. One is a group with high returns, “and we want more of those,” he said. “We’re going to go to the customers [where] we have that and say, ‘Can we have more of your business?’”

The other are customers that Bunn referred to as “commoditized.” Those customers are going to need to “value” the Dedicated service provides “or we’re going to give those trucks to somebody who’s in the first bucket.”

Trucks won’t just get “yanked” out, Bunn said. But “we’re not going to run Dedicated with a 98, 99 or 100 OR,” he added.

But even though Covenant, like other carriers, has leverage in negotiations given the tight market for capacity, it does need to be handled with a certain degree of aplomb, Hogan said. Hogan was talking about the company’s Expedited division when he said that in price negotiations, a company needs to be “respectful” as prices get up to “that line where they say, ‘Well, I’m going to grow my own [transportation].’”

Another possibility: rail. “When does the price push them to the rail?” he asked.

However, the Expedited division is “in a good spot for at least a couple of years,” Hogan said. That’s aided by the fact that inventories are “stupid low” across the supply chain, he added.


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: driver; labor; labormarket; salary; transportation; truckers; trucking
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To: SeekAndFind

How horrifying! People have discovered that time with family and doing what they enjoy is worth more to them than money! What a terrifying prospect, that money is not the sole motivator for these proles!


41 posted on 05/02/2021 10:50:26 PM PDT by Don W (When blacks riot, neighbourhoods and cities burn. When whites riot, nations and continents burn.)
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To: Jonty30
Although, methinks this guy is just making excuses to justify the eventuality of AI in trucking. Of all the industries I've encountered in life, the people running trucking companies are probably the ones I've consistently seen push back on using technology the most. There's just a disconnect in seeing an investment in software as something that makes money.

Part of it is that guys who get into trucking do so because they don't want an office job with all the office stuff that goes along with it. Then all the technology that they do have to deal with is pushed on them, so they don't want to go in any further than they absolutely need to, like hiring an IT guy or heaven forbid an IT department. Most of their custom software ends up being written in Access or Excel by some hotshot kid they had working on the loading dock two years ago.

Someday in the next five to ten years the big companies (Walmart, Amazon, UPS) they will get there. They're going to have autonomous trucks running point to point routes between distribution centers, particularly on open highway areas in the plains states. It will have to come from those places because of the initial costs in developing self-driving software and handling the legal labyrinth of getting permission to put those trucks on the road is immense, and only the big companies will have the infrastructure to support the planning software needed to link all of those logistics moves together.

Trucking companies will still have a need for drivers for years on out past this, but when they do start losing market share to the robots, they probably won't be in position to do anything about it but close up shop.

42 posted on 05/02/2021 11:25:39 PM PDT by jz638
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To: jz638

My understanding is that AI is limited, period. There is no amount of money or research that will develop a thinking machine, ever. That is my understanding of what they are finding out about AI.

All AI can do is take over mundane tasks and that it can save industry billions of dollars in eliminating human help and allow people to do more. If a human, on a long stretch of the road, can catch a short nap and be awoken by the truck when human intelligence is required, that alone can eliminate millions of jobs. That’s pretty valuable to the industry.


43 posted on 05/02/2021 11:55:50 PM PDT by Jonty30 (Just because I coughed on you does not mean that I have covid. It means that we have covid. )
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To: jz638; Jonty30
 
 
autonomous trucks running point to point routes between distribution centers, particularly on open highway areas in the plains states.
 
Along with Amazon.com and others developing cutesy little delivery vehicles, one question I have not seen covered is how all this solo machinery loaded down with valuables is supposed to navigate the increasingly lawless terrain of modern America without being successfully set upon by hijackers. Just off the top of my head I came up with about a half-dozen ways to defeat those things for illicit profit. I'd like to know how the techno brain trust that's sucking up grant money developing all this stuff proposes how to prevent shipping from falling straight into the hands of organized criminals.
 
 

44 posted on 05/03/2021 12:29:52 AM PDT by lapsus calami (What's that stink? Code Pink ! ! And their buddy Murtha, too!)
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To: SeekAndFind

Trucking is about to change a lot. Self drive technology will turn it upside down. Driverless trucks will take all the routes between distribution centers. They’re probably already testing.


45 posted on 05/03/2021 12:36:59 AM PDT by Born to Conserve
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To: lapsus calami

Some of it will just be absorbed as the cost of doing business. Some, it may cheaper to hire security at points to help assist trucks in bypassing more dangerous areas.

I honestly think there will never be a time when trucks are free of humans. I think AI will help truckers get by the more dangerous parts of their job, like when they can see ten miles out of clear road. That creates a risk of inattention and drowsiness due to nothing happening. That’s where I see AI stepping in. I can’t AI allowing no drivers in our lifetimes, because the loss of a truck by itself is going to be upwards of a $200,000 hit.


46 posted on 05/03/2021 12:41:10 AM PDT by Jonty30 (Just because I coughed on you does not mean that I have covid. It means that we have covid. )
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To: Jonty30
 
 
But a big part of their point of developing such tech in the first place is reduction of overhead. They will be just swapping one type of overhead headache for another. No savings goal met. And as this nation becomes more dystopian the risk & liability for such a venture becomes sky high, even "unsustainable" as they like to say. Towards the end of Obuzzard's 2nd term I remember how desperate & cold some people were getting, to the point where we had to organize zone security routines against organized raiders that would hit us day and night. And economic circumstances are lining up to be worse than what his regime produced, something that I'm not looking forward to in the least.
 
 

47 posted on 05/03/2021 12:55:47 AM PDT by lapsus calami (What's that stink? Code Pink ! ! And their buddy Murtha, too!)
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To: Zuriel
The cellphone has made driving of any vehicle much more dangerous than in the past…..I truly appreciate the courteous drivers that I would encounter each, but their numbers are dropping every day.

I’ve always done two things when sharing the road with trucks: 1) If the driver signals for a lane change, I try to make room to let them in, and 2) after passing a truck, I always give them plenty of room before moving back into their lane in front of them. It’s incredible the idiocy I’ve seen from other drivers around trucks. The worst is people who cut right in front of them, oblivious to the fact that that truck can’t stop on a dime and WILL run your little car over if you don’t give them enough room and you have to stop suddenly.

As a teenager, I became a licensed pilot before I got around to getting my driver’s license. I think that experience has always helped me to make sure that as a driver I maintain situational awareness at all times. I’m always looking not just at what’s in front of me, but also well down the road to anticipate problems before they happen. And no matter how many mirrors and cameras they put on cars, I always turn my head to look over my shoulder before changing lanes. That last one was ingrained into my brain by my flight instructor, because a mid-air can make for a very bad day. It’s also saved me numerous times while driving.

I mention all of that just to say that the biggest problem I see with the typical automobile driver today is a complete lack of situational awareness. So many of them have no clue what is going on around them. It seems all that they’re thinking about is themselves and where they want to go at any given moment. And if solid objects like your vehicle (or road signs, light poles, pedestrians, etc.) happen to be between them and the point they’re trying to aim at, then look out.

And of course there’s the out of control distraction factor from phones and whatnot. I was watching “bad driver” videos on YouTube, and I think the most shocking thing was how often someone driving down a straight piece of multi-lane freeway would suddenly, for no apparent reason, just lose control of the vehicle and crash. No other cars involved (at least not as a cause), just driving straight one second and then inexplicably swerving all over the road the next.

As you said, there are a lot of fools running around out there today, and I can’t blame you for wanting to stay away from them.

48 posted on 05/03/2021 2:11:23 AM PDT by noiseman (The only thing necessary for the triumph of evil is for good men to do nothing.)
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To: noiseman

“I mention all of that just to say that the biggest problem I see with the typical automobile driver today is a complete lack of situational awareness.”

It’s not just driver’s. Most of the human race, in a vehicle or not, has lost situational awareness. The ones that haven’t are typically very security aware folks that most likely are carrying. The first thing I look for when evaluating a person when they come into my sphere.


49 posted on 05/03/2021 2:28:37 AM PDT by mad_as_he$$ (God is in charge but he doesn't expect you to lean on the shovel and expect that a hole will appear.)
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To: SeekAndFind
Problem solved by 2030...

Vera

50 posted on 05/03/2021 3:08:10 AM PDT by zeestephen
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To: SeekAndFind

Those working will be pushed harder longer hours on the road, illegal drivers will be hired with little or no experience leaving us in grave danger traveling on the roads with our family


51 posted on 05/03/2021 3:09:58 AM PDT by ronnie raygun
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To: Rebelbase

A local McDonald’s franchisee is paying people $50 just to APPLY for a job.

When the government pays people to NOT work, this is the very predictable result.


52 posted on 05/03/2021 3:18:40 AM PDT by rarestia (Repeal the 17th Amendment and ratify Article the First to give the power back to the people!)
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To: The Mayor

Are you referring to the rigs seen on the TV show “Shipping Wars”


53 posted on 05/03/2021 4:06:29 AM PDT by Steven Tyler
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To: Rebelbase

“Semi related . . .”

*******

I see what you did there.


54 posted on 05/03/2021 4:55:49 AM PDT by BusterDog
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To: Jonty30

I sort of wish I had done that too.

Right now I’m close. I’m an expert in my field and have been a technical trainer the last couple years. I outfitted a large enclosed trailer with product demonstrations and samples. My job mainly consists of traveling to see customers in an 11 state area to hold training sessions for their employees and customers.

Tons of windshield time. Last week was my first long trip in months. I have more scheduled for May and June.

The rig is big enough that it qualifies as a commercial vehicle so I need to follow the DOT rules and stop at weigh stations but light enough that I don’t need a commercial driver license.

My son is 21 and is a full blown trucker. He works for a lumber yard and mostly often drives flatbed semi’s. He loves what he does and is directly keeping hundreds of men employed.


55 posted on 05/03/2021 6:13:00 AM PDT by cyclotic (Live your life in such a way that they hate you as much as they hated Rush Limbaugh)
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To: Steven Tyler

Probably, never watched the show but heard about it.


56 posted on 05/03/2021 6:23:28 AM PDT by The Mayor (I am outraged at your outrage toward the outrage!)
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To: SeekAndFind

There is NO LACK of truckers hauling in Chinese crap to our Military bases. At absurd high prices. Just saw the first upright 13 cubic ft freezers, the size of my 18 yr old 1. NO MADE IN AMERICA products.

Military bases at least State side should only carry MADE IN AMERICA PRODUCTS, It is an INSULT to have Chinese crap in our Exchanges at prices so high only THE BRASS CAN AFFORD IT.


57 posted on 05/03/2021 6:25:56 AM PDT by GailA (Constitution vs evil Treasonous political Apparatchiks, Constitutional Conservative.)
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To: SeekAndFind

Next, you’ll start hearing more about them importing ‘drivers’ from mexico. Within a decade, you won’t be able to drive unless you speak spanish as a native.


58 posted on 05/03/2021 6:31:23 AM PDT by zeugma (Stop deluding yourself that America is still a free country.)
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To: BradyLS

Why do you think so many are Diabetics? 160 hours of CDL school UP TO 6 MONTHS, depending on type Hazmat longer, special licensees, fees, insurances, on road 6 weeks, not welcome at Truck Stops, you might have COVID. And in a accident, you are always at fault and sued.

A state congressman makes more, works less.


59 posted on 05/03/2021 6:34:07 AM PDT by GailA (Constitution vs evil Treasonous political Apparatchiks, Constitutional Conservative.)
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To: Deaf Smith

BIL was a independent long hauler, said the same thing, plus keeping the diseased HOOKERS away. Then he turned mechanic for the older trucks. Died of a Diabetic Heart Attack. SIL daughter is a petite thing, she whips those trucks around. Rarely home.

As for young blacks you can make more selling DOPE in a couple of days.


60 posted on 05/03/2021 6:43:57 AM PDT by GailA (Constitution vs evil Treasonous political Apparatchiks, Constitutional Conservative.)
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