Not too many years ago, the political phrase of the day was, “It’s the economy, stupid!” Then the phrase changed to “Show me the money!” As we close the year 2006, trucking has had one rollercoaster of a year. Tonnage-wise it was (to the beginning of the fourth quarter) a banner year, but we’ve also had to deal with a wild ride in the price of fuel, the introduction of ULSD fuel, and threats the HOS will be changed yet again. However, the one area that seems to baffle trucking companies and their organizations most is the “driver shortage.”

What’s curious about this perceived CDL holder shortage are the conflicting stories that show up next to each other in both industry publications and general news outlets. On one hand, the ATA and several trucking companies report there are currently 20,000 drivers needed for available trucking positions across the country. They estimate that by 2014, this will increase to 110,000, and indicate there are approximately 3.4 million truck drivers in America with 1.7 million of these listed as over-the-road. Yet, on either the next page or a preceding page in the same publication, there will be a discussion from the DOT, the FMCSA, or Homeland Security about the fact there are over 11 million CDL holders in the USA today.

Now with a little simple math, if you subtract 3.4 million from 11 million you come up with an excess of 7.6 million truck drivers. Let’s assume half of the 7.6 million are retired, or have other interests that keep them from trucking. That still leaves 3.8 million qualified truckers who would consider returning to the ranks if the conditions were right. The conclusion is there is not a driver shortage, because there are 20,000 open trucking positions with 3.8 million qualified CDL holders to fill them. The question the ATA should be looking at is, Why are 3.8 million Americans, who are qualified to drive commercial vehicles, not willing to fill these positions? Numbers don’t lie: the problem must be in how truckers are treated and how they are paid.

To top this off, according to a Department of Labor report, truck driving is the most dangerous job in America. Yet when the work is truly the most dangerous, during inclement weather, navigating construction zones, or heavy traffic; this is when most truckers are paid the least, especially when they’re paid by the mile. With all these reports, information and statistics, what are trucking companies providing their drivers?

· plusher cabs,
· automatic transmissions,
· and sending birthday and anniversary cards to the driver’s family.

This is nice, but are the companies resolving the core issues? A study at the University of Arkansas concluded from a survey of trucking company HR departments, the number one concern truckers had for staying or not staying with a company was amount of pay. The second concern drivers had was consistency of pay. And the third was regular home time.

At present, the average annual salary quoted by the ATA for a truck driver today is $35,000. According to a July 2003, study by the Department of Labor Statistics,the average annual pay for a truck driver was $32,134 and for all workers, $37,784. Could this be one reason for the industry-wide turnover rate of well over 100%? Yet there are companies whose turnover rates are in the low teens, and the equipment these truckers drive is simple with no frills. Consider this: the average pay for a LTL union OTR driver is around $80,000 per year. Does this mean $35,000 per year equals 100% turnover and $80,000 per year equals 13% turnover? The answer is in the numbers.

If you look at the current trend, a number of large trucking companies recruit as many lease/purchase drivers as possible from the ranks of their company drivers; some with as little as six months behind the wheel, and the vast majority without a clue of what a Profit and Loss statement is or how to calculate their break-even point. These drivers are told they’ll take home a lot more money going lease/purchase than they do as company drivers. In fact, a tremendous number receive far less than minimum wage for their 110 hour per week efforts (actual time spent driving, unloading, loading, waiting for dispatching, sitting in traffic, etc.), and others are earning $8-$10,000 less than they did as company drivers. Yet these lease/purchase contractors boost the bottom-line profit of most of these companies. How? The companies don’t have to pay the employer’s portion of FICA taxes, Workers’ Comp, 401k contributions, unemployment taxes and other employee-related costs on these lease/purchase drivers. The lease/purchase driver gets stuck with these expenses. And some unscrupulous companies even benefit from inflating the value of the truck they’re leasing to the driver, charging the driver a weekly payment (which equals the same as 13 monthly payments in a year) instead of a monthly one, and requiring him to pay into a maintenance account. By the time the driver realizes he’s made a huge mistake, he’s so deep in debt to the trucking company his only choices are to either stay and suffer financially, or turn in the truck. The driver winds up in a no-win situation. If he stays, in order to meet his financial needs, he has to put enough miles on the truck each week that push him up to and beyond his available Hours of Service.

Proof of this can be easily found by checking a trucking company’s Department of Transportation’s SafeStat figures: high DRSEA (DriverSafety Evaluation Areas), or scores over 75, indicate a company possibly requiring more from their drivers than the HOS rules or time allows. Or in simple terms, a driver is having to push his available HOS hours, the speed limit or other safety factors to make the miles required to earn the revenue to cover his financial obligations. The other choice for the driver is to turn the truck back to the company, losing the money he’s paid into the lease/purchase, repairs and tires he’s paid for, and in a lot of cases, his entire maintenance account, not to mention the negative it could place on his credit rating. At this point, angry and frustrated, he leaves the industry and joins the ranks of the forgotten 3.8 million truckers.


The reason this keeps on happening is the people at the top look at their bottom lines with double-digit profits. “If it ain’t broke, don’t fix it,” is the attitude:

· just keep putting individuals through trucking school,
· hire retirees with pensions (they don’t need as much money to live on),
· hire minorities and women because they’ll take less pay,
· offer a free college education so they’ll be gone in four years and won’t demand a reasonable wage for their driving experience,
· continue changing other areas to give their trucking companies an even greater advantage in the future without regard to the needs and wants of their drivers.

What happened? Many trucking companies, if not most, were started by truckers. But now some of these large companies are being driven by executives who’ve never been in the cab of a truck for anything more than a photo-op. Their biggest concerns are: What’s our stock price going to look like? Will our executives be getting the six and seven figure bonuses at the end of the year? What trucking company can we buy out this week for a greater share of the market? These aren’t bad goals, unless they’re achieved at the expense of their drivers. However, most of these companies look at their drivers as a means to an end, not a person, not a person with a family and financial needs, not the core of their business. What these trucking executives and their organizations do concentrate on:

· Lobbying to have laws passed that limit the top speed at which trucks travel down the highway. Their insurance companies require their trucks to travel slower speeds because of the inexperience of their drivers.
· Attempting to get the labor classification changed for truck drivers to unskilled labor, then pushing to get a ‘guest worker’ law passed so they can bring in foreign workers to drive trucks.
· Continuing to tell the media there’s a driver shortage so when the guest worker law is passed they have the ‘stats’ showing there aren’t enough Americans willing to drive trucks.
· Ensuring the Fair Labor Act exclusion for trucking is never changed so they can continue to pay wages that are some of the lowest in this country for actual hours worked.
· Continuing to push for legislation and regulations that hold back the smaller trucking companies and independent owner/operators.

Fact: of the over 700,000 trucking companies registered with the DOT, 80% have 6 or fewer power units. Two more facts: According to Logistics Management’s 15^th Annual Masters of Logistics Survey of shippers: On-time delivery performance has been slipping the past few years. Shippers are moving towards smaller, leaner carriers to meet their needs and receive better service.

The trucking companies which are paying more attention to Wall Street than to their own operations, employees and drivers show how the interests of the management and drivers are diverging. The pay and benefits for the executive officers are ballooning while the take-home pay of the driver is holding steady, or worsening. The more these executives push for changes that don’t directly address the earnings issue for the individual trucker and his/her family, the more these issues will continue to have a negative effect on this industry and America.

Eventually what goes around, comes around. This “shortage” and exodus of drivers from the industry will continue, and just as the ATA has said, it will increase to unprecedented levels; 110,000 short in just a few years. We can solve this mass departure of drivers, while improving highway safety and the security of America in one fell swoop. The solution: provide an economic environment where an individual driving a truck, (whether a company driver, a lease/operator, or an Owner/Operator), or a small trucking company can earn the revenue commensurate with the skills required. This must take into account the dangers of the job, the necessary time, a return on investment for the equipment and allow a trucker to make a safety-related decision that doesn’t negatively impact his income.

It’s said if you build it they will come; in the trucking industry if you show them the money (3.8 million CDL holders), they will return.

Remember, it’s your company, your truck and your country.

Timothy D. Brady is a 20 + year trucking veteran and AMSA’s 2002 Super Van Operator of the Year HHG. He’s the “Trucker’s Business Advisor” on Sirius Road Dog Network’s “Open Road Café” Wednesday mornings. Brady has authored several trucking business books and is available for speaking engagements and to conduct workshops.
Contact him at tbrady@writeuptheroad.com or (800) 292-8072.