For the first time in roughly four years, truckload carriers have the upper hand in relationships with customers, not the other way around. With double-digit hikes in contract rates and a booming economy, the demand for truckload carriers is approaching record highs. However, the current economic situation still leaves unanswered questions about the driver shortage.
High Production Creates Demand For Truckload Carriers
Businesses ranging from raw materials to cars, electronics, produce, and more are turning out shipments by the truckload. People are earning more and feel more comfortable spending their money. Whether it is business-to-business transactions or business-to-customers, there is a demand to be met and products to be sold. Getting those products into the right hands has created a new demand for truckload carriers. Fleet owners now have more control in negotiating contract terms and pay rates. This shift in dynamics may favor truckload carriers, but it also underscores the current shortage within the trucking industry.
With carriers holding the power in negotiations, the question about filling customer requests comes to the forefront. There are currently 2.4 million drivers in the trucking industry. Zooming out a bit, the trucking industry had 1.9 million drivers as of 2013. That is a marked increase, but there are still roughly 51,000 vacant driving positions. The current shortage is placing a strain on the ability for carriers to live up to the expectations of clients. Turnover withing fleets is high, and the number of truckers reaching retirement is growing. If the trend continues, the industry could see a shortage of 170,000 within the next eight years.
Maybe Drivers Aren’t The Problem
There are currently recruiting campaigns at vocational schools and technical colleges to get people interested in trucking. There are even programs to help returning veterans ease into jobs within the trucking industry. Turnover rates are still high, and the number of drivers being recruited will only take care of part of the shortage. Pay rates still have not increased much for truck drivers, and with the FMCSA mandate for electronic logging devices, many drivers are taking home less pay than when they weren’t limited to eight or ten hours of operation each day. Truckload carriers are currently mulling over an increase in pay for drivers to help reduce the shortage while still scoring better contracts with customers. This may be the only logical compromise to meet the demands of customers and easing the strain on fleets.