Stallion Transportation Group ran into a problem after adding 15 trucks to its Beebe-based fleet earlier this year.
Butch Rice, the company’s chief executive officer, said it took more than four months to recruit enough drivers to fill the seats of those big rigs.
“We never really had a driver issue up until the last couple years,” Rice said last week. “But it has really tightened up. … It’s a different animal out there right now.”
Stallion, which has about 70 trucks in its fleet, isn’t the only company facing similar challenges. The U.S. transportation industry is dealing with an estimated shortage of about 50,000 drivers, according to data from the American Trucking Associations, despite efforts to attract and retain workers.
The struggle isn’t new across the industry. Groups like the American Trucking Associations and its chief economist, Bob Costello, have been tracking and projecting the shortage for years. But trucking executives and experts agree the industry’s dilemma has been magnified over the past several months because of a number of factors, including the country’s low unemployment rate.
Consumers confident in the economy are buying more from retailers like Walmart Stores Inc. and Amazon.com. Shippers need more products hauled and trucks account for more than 70 percent of all tonnage moved in the U.S., according to the American Trucking Associations.
Companies are eager to dispatch trucks to take advantage of the business opportunities, but are having trouble finding enough qualified drivers to meet the increased freight demand.
“It’s a double-edged sword,” Costello said. “It’s a reflection of a good economy and a good industry, but it’s an operational hardship that the industry is dealing with.”
There are numerous reasons for the widening shortage, according to industry experts.
One of the biggest is an aging workforce that isn’t being replaced by younger drivers. A 2016 study by the American Transportation Research Institute showed nearly 57 percent of the driver workforce is 45 and older, while just 4.4 percent is between 20 and 24. Costello’s report “Truck Driver Shortage Analysis 2017” indicated the average driver age in the for-hire, over-the-road truckload industry is 49.
The country’s low unemployment rate — 3.8 percent in May — has reduced the pool of qualified candidates as well. While truck drivers earn solid pay, the demands of the job can be a turnoff because of long hours behind the wheel. Potential candidates for driving positions also are finding jobs in other industries like manufacturing and oil and gas.
“Drivers are finding other things to do now,” Rice said. “With unemployment as low as it is, and manufacturing up, drivers can take these manufacturing jobs that weren’t there before. So it’s put a little bit more of a burden on us.”
Industry experts also believe a federal mandate that recently went into effect requiring electronic logging devices in trucks has had an impact as well, limiting the number of hours drivers can work.
Shannon Newton, president of the Arkansas Trucking Association, pointed to another regulation that has made it harder to attract younger drivers to the industry. Federal law requires truck drivers to be 21 and older to cross state lines, meaning 18-, 19- and 20-year-olds are restricted to working within a state.
The Arkansas Trucking Association is supportive of legislation introduced at the federal level earlier this year that would lower the age limit from 21 to 18.
Newton believes the trucking industry has suffered from not having “any place to put young people” as they graduate from high school.
“It makes our job more difficult than an electrician or mechanic or construction and those types of industries that we’re competing with for that talent,” Newton said.
PAY RAISES, PERKS
The competition for drivers has led companies to raise pay and offer other perks like signing bonuses, many of which are paid out over time. A growing number of companies provide scholarships or other financial assistance to help shoulder the cost of commercial driver’s license courses, which can cost roughly $5,000. They also try to raise the attractiveness of the job by offering drivers the opportunity to operate newer equipment, guaranteed home time and local routes.
Nick Wakefield, USA Truck’s director of driver talent and acquisition, said it’s much harder to find qualified drivers now than it was 10 years ago. He said a trucking career isn’t “sexy,” but believes the job is much better than 10 years ago because of the improved pay and added benefits.
“It isn’t the Smokey and the Bandit, Rubber Duck days where you’re on the road for months at a time,” Wakefield said. “Most of our drivers, they run Monday through Friday and they’re home on the weekends. So they can be home for the kids’ events, they can be home for the family events.”
Maverick Transportation of North Little Rock recently raised pay for its student drivers to between 47 cents and 53 cents per mile. It’s the fourth pay increase for drivers in recent months. The company also offers a $5,000 sign-on bonus to drivers with at least six months of over-the-road experience.
Al Heringer IV, vice president of Star Transportation LLC of Jonesboro, said his company has raised pay three times in the past 15 months. But the tanker company — which runs day and night shifts — remains 40 shifts short. The average annual wage for Star Transportation drivers is roughly $50,000 and the average age of its driving force is 52.
“I sure wish it was easy,” Heringer said. “But you’ve got to do what you can do and keep at it.”
Malea McElyea, vice president of business development at CalArk International Inc., said her company has also raised pay, offers signing bonuses and other benefits. McElyea said CalArk was doing “quite well” because of the strong economy, but there is plenty of additional opportunity. So if the company could hire “20 drivers tomorrow that would be wonderful.”
“We’ve got a lot of demand out there,” McElyea said.
Meanwhile, Stallion’s pay has climbed four times in the past 18 months. Two years ago, the average driver pay at the company was $58,000. It is forecast to reach about $70,000 this year.
About 43 percent of trucking’s operational costs are tied to driver compensation, according to the American Transportation Research Institute.
Rice said costs associated with increases in driver pay, recruiting and retention efforts are being passed along to shippers in the form of higher freight rates.
“They’ve been forced to [pay higher rates],” Rice said. “More product is sitting because of the shortage. So customers are having to say, OK, just get me a truck. We’ll do it for that rate now.”
The increased expenses of having their products moved around the country has had an effect on margins for shippers as well. It means the price of their products are on the rise in many cases.
One example: Tyson Foods CEO Tom Hayes told investors in May that the Springdale company anticipates an additional $250 million in transportation costs during its current fiscal year.
While the meat company took steps to mitigate the effect on its margins, Hayes indicated some of the costs would be reflected in higher prices for Tyson’s customers.
“Product prices must reflect the true cost because we cannot subsidize the increased freight,” Hayes said.
The American Trucking Associations’ Costello said it’s up to retailers to determine whether consumers will ultimately feel the ripple effect, but added it’s “reasonable to think we are at least paying something” because of increased costs.
He also said the the truck driver shortage is expected to swell even more, reaching 174,000 by 2026. The development of driverless trucks could ease some of the burden, but may not be ready for the nation’s highways for several years.
Until then, Arkansas companies like USA Truck will continue to do what they can to recruit drivers.
“If we can find a bunch of drivers the company can go out and buy more equipment, we can find more independent contractors and we can add more capacity,” Wakefield said. “In this market, as good as the rates are and where the demand is, I don’t think there’s a director of recruiting who wouldn’t tell you that we could use more drivers.”