Trucking | Drivers | Salary | Labor | B Corp
Climbing Demand For Drivers
While progress in automated drivers has been immense it is still not ready to replace driving industries on a mass scale. So this leads one to ask, why in a fight where laborers are concerned with being replaced by machines, is the demand for drivers growing? According to American Trucking Associations (ATA) the trucking industry could have as high as a 175,000 labor shortage by 2026.[1]
Reasons behind this number? At a glance it doesn’t make much sense. After all there are over 10 million commercial driver’s licenses in circulation at the moment, how could there be a growing shortage. For one, the average age of licensed drivers has significantly increased—many licenses are either towards the end of their careers or retired. This license also includes larger vehicles not used for trucking, such as limousines: “Using Department of Labor data, Costello estimates that within that 10 million there are 3.5 million drivers who would be considered truck drivers.”[2]
The ATA estimates the labor demand for the industry is around half a million and has around a 50,000-driver shortage. That’s 10% short of the estimated minimal need. This leads one to ask where are all the drivers afraid of automation stealing their jobs? Is this a preemptive exit? Moving to a different industry before the jobs are taken?
The leading cause of the shortage appears to be high turnover: “The turnover rate in the first two months of 2017 was in excess of 90%.”[3] This is still less than the 136% turnover rate in 2005.
Why the high turnover rate? Even in a job that pays well, people are willing to pursue employment with less compensation if they’re able to sleep in their own bed every night. The proof of this is the incredible increase in wage for long distance drivers. Walmart announced its aiming to higher 900 new drivers in 2019 with an annual salary of $90,000.[4] The excess demand for drivers in the past year has skyrocketed. According to the Bureau of Labor Statistics the median salary of a driver in 2017 was $42,480. In one year that jumped to $53,000.[5] That’s almost a 25% median salary increase and the demand for more drivers is still there!
While automation eventually replacing drivers feels inevitable, it also seems to be the natural reaction to high labor demands and growing salaries in an industry the work force is actively losing interest in. This leaves one with the question is battling automation a worthy fight or should we focus our energy on the exploration of the new labor market in a futuristic world.
Any opinions are those of Jeffrey Goldfarb and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.
[1] https://www.cbsnews.com/news/walmart-wants-to-hire-900-truckers-and-pay-them-nearly-90000-a-year/
[2] https://www.freightwaves.com/news/driver-shortage-ata-estimates
[3] https://www.freightwaves.com/news/driver-shortage-ata-estimates
[4] https://www.cbsnews.com/news/walmart-wants-to-hire-900-truckers-and-pay-them-nearly-90000-a-year/
[5] https://www.bls.gov/ooh/transportation-and-material-moving/heavy-and-tractor-trailer-truck-drivers.htm l