Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/165354
Defining a driver shortage where pay's up 63 percent in a decade There are always niches where demand is high – not just for drivers, but for owner-operators and fleets with special equipment. Specialized trucking employment has risen 21 percent since 2003, driven mostly by a 30 percent increase in local specialized trucking (excluding household goods moving). Much of that increase probably has to do with oil and gas production, says Avery Vise, head of trucking research and analysis for Overdrive publisher Randall-Reilly. Long-distance specialized trucking also is up (22 percent), and this, too, probably is related — at least partially — to growth in domestic energy production. Likewise, that oil and gas production appears to have fueled pay increases. Average weekly wages for production and nonsupervisory employees in local specialized trucking (excluding moving) jumped 63 percent between 2003 and mid-2013 — almost double the growth of wages for the entire for-hire trucking industry (32 percent). turns in the economy," says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association. Owner-operators have earned more in recent months, as evidenced by averages of thousands of owner-operator clients of financial services provider ATBS. During 2012, ATBS clients saw net income rise 8.6 percent to almost $52,000, said Matt Amen of ATBS during an Overdrive Partners in Business presentation at the Great West Truck Show in June. Those owner-operators drove 2,500 fewer miles on average than they did in 2011, but higher rates made up the difference. The segment with the biggest gain was independents, whose average A growing shortage net income rose $5,813 to $55,994. One reason for the lower miles is a major trend of recent years – a shortening in average length of haul – and it will continue, Amen said. "We're going Industry Growth 36% Retirements 37% Voluntary Non-Voluntary Non-Retirement Departures Departures 11% 16% FUELING DRIVER DEMAND. These key factors are creating a demand for nearly 100,000 new drivers each year over the coming decade as experienced drivers reach retirement age and trucking continues to grow, says the American Trucking Associations. 2.00 { 239,000 potential shortfall Driver Demand Millions the foreseeable future," he said. Perry also notes, "Drivers are getting a lot of miles, so their W-2s are going up even though their per-mile wage is not. So that's keeping them happy." Nevertheless, considering the demand for labor, Perry offers another possibility: "The fleets have been underpaying the drivers," he says. "If this hits the fan in the next year, the industry will have to radically change its behavior." Many owner-operators appear to have fared better than company drivers in recent years, thanks to the entrepreneurial nature of their business and the timing of the economic rebound. "Generally, owner-operators and smaller operators are among the first to experience either upturns or down- 1.75 Driver Supply 1.50 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 The American Trucking Associations, assuming a current shortage of more than 20,000 truck drivers compared to available jobs, projects the gap to grow annually over the next 10 years. $900 Jobs flat, wage growth modest 800 Long-haul truckload weekly wages 700 $800 600 $700 500 $600 Long-haul truckload jobs (000s) $500 2003 2004 2005 2006 2007 2008 2009 2010 2011 400 2012 2013 The number of jobs in long-haul trucking has been basically flat for the past decade, though the industry logged substantial losses during the recession. Since its December 2006 peak, truckload employment has dropped 8.6 percent. Wages rose by a third over the decade, slightly lagging private sector wage growth but well below historical wage growth during an economic recovery. Trucking generally has fared better than manufacturing and construction in job growth and wages. (Government data shows the average usual weekly wages for production and nonsupervisory employees, so support personnel are included with drivers.) 28 | Overdrive | September 2013 Driver_Shortage.indd 28 8/27/13 10:52 PM