With rising demand, the trucking industry needs to get smarter in order to address the shortage of workers it’s facing. According to American Trucking Association, there is an urgent need of 48,000 drivers nationwide. They also project that this shortfall is only going to rise in the coming years. Do you know that out of all the workforce in the United States, 47% consists of women workers? But when you see the stats in the trucking sector, women drivers are only 4 – 5%. This has been the case for more than 2 decades now. If we can get more women drivers, this shortfall will quickly come down.
Driver shortages that are already hurting trucking companies could worsen as lawmakers propose new regulations that analysts say would exacerbate the problem.
With unemployment low and many older truckers retiring, finding qualified drivers has become an industry challenge.
Regulations that would require extensive commercial driver training and limit hours of operation – thereby increasing drivers’ time away from home – will only make things worse, industry analysts said.
But they also acknowledge that limiting drivers to fewer continuous hours on the road and increasing their training would make the roads safer, something that also improves the industry’s image.
Driver shortages affect more than just trucking companies, said Noël Perry, a trucking industry analyst at FTR Transportation Intelligence.
Because transportation firms will likely have to pay more for training, wages and the procurement of trucks and trailers necessary to haul cargo, they’ll have to raise rates.
One proposal, which calls for increasing the hours of training that entry-level drivers will need to obtain a commercial driver’s license, will cost as much as $5.6 billion over 10 years, the Federal Motor Carrier Safety Administration said in a March Federal Register report.
Retailers and manufacturing companies that rely on truck shipments to keep their businesses operating will pay the increased costs — and likely pass the rate hikes on to their customers.
The industry is challenged by another requirement that drivers electronically, rather than manually, log their driving activity, which may put a crimp in productivity by forcing them to rest more often.
Log books have always been a part of truck driving. But by requiring electronic logging devices, or ELDs, regulators can more accurately gauge how long drivers have been on the road.
Although newer drivers aren’t opposed to ELDs, veteran drivers who’ve scarcely been monitored for decades are pushing back, said Dan Costello, the senior vice president for sales and marketing at TransForce Inc., which touts itself as the nation’s biggest supplier of staffing and support for trucking companies.
As older drivers retire or change career paths, the onus is on companies to find qualified employees to fill cabs, something proving difficult.
“It’s an aging workforce, and we’re not replenishing people as quickly as they’re leaving,” Costello said. “If more drivers don’t start entering the workforce and stay in, it’s going to be a much bigger problem in the future.”
Another proposal that could cut shipping productivity would require each new driver to have 30 hours of supervised time behind the wheel. That presents an impediment to hiring because of cost and lack of qualified instruction companies, Perry said.
“The issue there, as in all these cases, is capacity – the capacity in this case is that of the training schools,” Perry said. “This industry is extremely adaptable, so they’ll solve the issue, but the question is how long it takes them to solve it. It won’t happen overnight.”
Driver-training companies can train about 125,000 students annually, which likely isn’t enough to supply the number of new drivers needed each year, Perry said. If that rule is implemented, he said, the shortage will only get worse.
The solution to the driver shortage is reducing regulation rather than increasing the number of laws governing the trucking industry, said Costello of TransForce.
As it stands, the law says only those 21 and over can operate a Class A vehicle. Getting rid of that regulation and allowing those 18 and over to drive would make a serious dent in the shortage, he said.
If trucking companies can capture a subset of 18-year-olds straight out of high school, there’s a better chance they’ll become lifelong drivers, industry veterans say.
The American Trucking Associations safety board has discussed lobbying lawmakers to allow 18-year- olds to drive Class A vehicles to help ease the shortage, Costello said.
“If someone is 18 and they’re not going to college, they’re going to find some vocation immediately,” he said. “They’re not going to wait around three years to become a truck driver.”
He said developing a truck driving vocation program might be helpful in guiding high school graduates into the industry.
However, Costello conceded that having 18-year-olds driving an 80,000-pound load isn’t without its risks, and said insurance companies would raise concerns if it were to happen.
There’s always another solution. The industry could pay higher wages, he said.
“You can’t change the hours, you can’t change the equipment, and you can’t change the job,” Costello said. “So we’re going to have to find some way to recruit people into the industry … make the pay higher.”
Running a commercial rig ain’t cheap. Whether you’re an employee at a logistics firm or an independent owner / operator you’ll need to be hyper-aware of the cost of driving and maintaining your truck. Running a logistics operation can be profitable, but if you’re not on top of your costs,runaway expenses can kill a logistics business profitability nearly overnight. In this articles we’ll cover the typical costs involved with running a commercial truck, including fixed and variable costs. We’ll also share some good advice on how to save costs and ways to keep up on book keeping.
Fixed Cost Considerations
Fixed costs represent recurring expenses sustained by simply keeping your rig in service whether it’s driving or not. Typical logistics companies fixed costs include:
- Truck Payments
- Ongoing rental costs
- Licenses / Permits
By totaling these costs on an annualized basis, owners can parse the totals into monthly or weekly increments to determine the break-even point for maintaining the business. For example, it the total annual fixed costs of operation are $32,500 for a commercial rig, it takes $2708 per month or $625 per week of fixed costs to maintain the operation. Owners can then determine the net benefit of any individual run as well as the potential loss due to maintenance shutdowns or holdouts based on a more lucrative job.
Variable cost will directly fluctuate in accordance with the number of miles driven per truck. That being said, not all variable costs are created equal Many variable costs, like maintenance, will decrease per mile as the total number of driven miles increase. Fuel, on the other hand, will directly coincide with the number of miles driven and the price of fuel on the market. Typical variable costs for the logistics / trucking include:
- Fuel Taxes
- Broker Costs
Let’s take a minute and discuss the “king” of all variable costs – fuel. With all the talk of falling oil prices, fuel costs still reign supreme as the largest expense in commercial trucking, representing a whopping 35% – 40% of the TOTAL costs to operate a commercial truck. This critical cost factor can be a competitive advantage for costing a potential job if you can use more efficient diesel engine or fuels like a bio-fuel mix.
Next on the list of big costs is Maintenance. Typically representing around 7% – 10 % of total costs of operation, maintenance needs to be carefully considered and scheduled every year.
Profits / Salary for Drivers
If you own your rig, you’ll need to pay yourself with any leftover money after expenses. For business owner of logistic companies, driver have to be paid promptly for the work being done. Generally, salaries take up around 20 – 25%% of the expenses one is putting in. For businesses with a large payroll, you’ll need to understand there are multiple levels of experienced driver out there, and each one will have his or her salaries. Seasoned drivers will take more than new ones, but there are benefits in going with the experienced hand. The chances of short-term troubles (i.e. accidents) popping up with an experienced driver can make it worthwhile to foot the bill and pay more.