Around the world there is a chronic shortage of truck drivers and for good reasons. Becoming a Supplier of Choice may not solve all your transportation problems, but it’s a good start to rapidly improving work conditions and increasing efficiency and profitability.
If there was no COVID-19 pandemic and every freighter in the world could make and clear port, expeditiously discharging their shipping containers, and all the roads around the planet were perfect, connecting open borders without any need for inspection, the global supply chain would still face a paralysing challenge – a global shortage of truck drivers.
In the United States – as part of an ongoing nearly 40 year old campaign to convince law and rule makers to relax regulations – the American Trucking Association, which lobbies on behalf of the nation’s largest trucking employers, has been promoting the idea of a chronic truck driver shortage since the 1980s. Lobbyists aside, wherever you look, most agree there is a serious truck driver shortage.
In America, long haul truck driving is an unattractive, uncomfortable, and unhealthy profession. Drivers work long hours to maximise earnings while many employers seeking to maximise work hours and minimise costs.
In addition to generally unfriendly and unsanitary pickup and drop-off locations, truckers face psychological pressures. Long haul driving is a lonely experience. Truckers, especially long-haul drivers, are away from home for days or weeks at a time. Driving is stressful, a mixture of numbing routine and juggling constant variables, many – like weather, traffic, mechanical breakdowns, and slowdowns at the points of origin and/or departure, etc. – not only out of a driver’s control but having negative impacts on their incomes and ability to get to their next load.
There is stiff competition for drivers from the construction and warehousing industries and taxi companies and ride-sharing apps. The average American trucker is ~56 years old. Many are choosing to retire, a trend accelerated during COVID-19.
No wonder. Drug testing and results tracking have made it hard for drivers who have ever tested positive to return to work. The Electronic Logging Device (ELD) mandate, implemented in 2019, reduced capacity by electronically enforcing the Hours of Service laws that trucking had sometimes flouted, effectively reducing available driving hours.
Different continents, same problems
The situation isn’t any better in Europe where UK consumers routinely face empty shelves and the British Army is helping deliver fuel to gas stations. Countries like Poland and Germany are short over 120,000 and ~100,000 drivers respectively. In total, Europe is short about 400,000 drivers, a shortage that precedes Brexit and COVID-19 by more than a decade.
Globally, the demand for drivers continues to increase as the pool of truckers continues to decline. In Germany – where the average driver age is over 50 and only 5% of truckers are under 25 – about 40,000 drivers retire every year but only 16,000 new drivers are being trained.
As in the US, international trucking faces stiff competition for workers. Drivers’ pay is generally low, hours are generally long and working conditions are generally poor. Drivers are away from home for weeks, face unhealthy lifestyles, poor, unsafe and unsanitary rest stations, and insufficient facilities at loading-/unloading points.
Recent regulatory initiatives have started on both a sovereign nation and European Union (EU) basis impacting the ability to employ drivers and/or sub-contractors from abroad. The EU Mobility Package, effective February 2022, ensures better working conditions. At first look, these regulations appear to further limit driver availability, but Kearney thinks they’ll actually help retain existing drivers and attract more truckers over the mid to long terms.
What shippers can, and should, do
There is less of a driver shortage, and lower turnover, in private, dedicated truck fleets. So, our advice to shippers is to focus on what they can control and become a shipper of choice – encouraging their suppliers and customers to collaborate on designing improved driver working conditions and establishing training and apprenticeship programs.
Shippers of Choice use efficient planning, operational, and payment processes to help carriers maximise capacity utilisation, minimise operating costs, and improve factors leading to driver retention.
These carrier/shipper interactions fall into four areas: overall relationships; capacity planning and tender; shipment execution experience; and post-shipment payment and issue resolution. This includes activities ranging from installing, and maintaining, bathrooms, break rooms and showers to redoing processes and docks, etc. in order to improve flow and reduce detention.
Shippers should actively promote that they want to be recognised as shippers of choice and broadly communicate improvement initiatives. Shippers should also invest in private and dedicated fleets, pay private drivers better, and creating driver training programs, and working with suppliers and customers to improve carrier conditions at each end of a run.
Long-term, the driver shortage won’t go away until we see scaled adoption of autonomous trucking which could take anywhere between five and 15 years.