Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/634029
February 2016 | Overdrive | 29 With the exception of 2014-15, pay evidence of a supply/demand im- balance in OTR truckload drivers' favor is not found during 2005-15, during which a driver shortage was documented for nearly every year by one analyst or another, excepting during the worst part of the recession. Even with strong increases in 2014-15, pay is only now returning to inflation-adjust- ed 2005 levels. A decade just to rebound 2005 – Amid a years-long wave of "labor shortage" studies from other industries, release of the ATA-commis- sioned driver shortage report spawned other trucking short- age estimates. 2009 – "The only time I don't remember the 'driver shortage' and 'underpaid drivers' being the biggest issue of con- versation was 2009 and 2010, the Great Reces- sion!" – ATBS President Todd Amen 2010 – With the impending advent of the CSA program, FTR Associates estimates a current short- age of about 10,000 drivers but warns of a 124,000-driver shortfall by late 2011. 2011 – FMCSA proposes all drivers be required to use e-logs, fueling worries of a driver exodus from the industry. 2012 – Prior e- log rule thrown out in court. ATA reports a shortage of 20,000-25,000 drivers in for- hire truckload "could balloon to as much as 239,000 in 10 years." 2014 – A new e-log mandate proposal arrives early in the year, reviving concerns over driver exodus. Severe winter weather exposes tight capacity, driving up spot market rates and leading to income gains for independents. 2015 – Walmart's private fleet advertises $80,000-plus starting pay. TCA chairman says company drivers should earn at least $65,000. ATA estimates a 48,000-driver shortage by the end of the year, 175,000 by 2024. Inflation-adjusted mean U.S. household income SOURCE: U.S. Census Bureau. These averages skew higher than trucking pay because of dual-income households and because of a small but relatively high set of outsize earners at the top. The median income (the midpoint between the group of top and bottom earners) ranges over this same time period between $58,000 and $53,000. Data is unavailable for 2015. Inflation-adjusted owner-operator income SOURCE: Averages of ATBS owner-operator clients, most of whom are leased. Over this period, their annual miles fell slightly more than 20 percent, reflecting long-term downward trends in length of haul and other operational factors. Inflation-adjusted company driver pay SOURCE: National Transportation Institute, averaged based on driver pay packages in NTI's long-running survey of medium-to-large truckload fleets, converted to an hourly rate and based on a 40-hour week $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 $45,000 $40,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 T rucking has trumpet- ed a driver shortage over most of the last 10 years and beyond. Major studies by the American Trucking Associations have generated much cover- age inside and outside the industry, mak- ing the idea an unquestioned assumption. Yet during the last decade, driver pay hasn't risen in a way that would reflect such a strong labor demand. And some forecasts have turned out much less dras- tic than predicted. Company driver pay over the same period hasn't even kept up with the rate of inflation, while owner-operator net income has just barely done so, if 2015 estimates hold. "If someone cannot find a driver to deliver a load at the rate they want it delivered at, they whine 'driver short- age,' " longtime owner-operator Jeff Clark said during a 2010 interview. "It's analogous to this: 'I want to buy a new Cadillac for $10,000. They would not sell it to me. Hmm, must be a Cadillac shortage!' " From a fleet perspective, the short- age is often seen as a given. Truckload turnover rates in more sizable fleets can exceed 100 percent, so recruiting is a tedious, expensive process that never stops. Trucking regulations make it hard- er or less appealing for drivers to get in or want to stay in the industry. Likewise, fleets can hurt themselves by hiring drivers who are marginally qualified, so many companies screen more rigorously.