The economy of 2018 is booming, according to any indicator you would choose to pick. One of the indicators of a booming economy is the volume of items sold. Most household or business items sold need to get to the household or business of destination, whether transported by the buyer, the seller or a third party. Every time the economy picks up, people buy more things. While today’s economy has a lot of intangible products such as streaming or downloaded products, there are still a lot of material products being purchased. Material products, be they commodities or finished goods, have to be moved, and the vast majority of times, the material products are moved by a truck. The trucking companies have lots and lots of potential customers, all wanting the company to transport something for them. Every time this economic condition happens, the trucking companies cry out that they cannot get enough drivers.
There’s a national driver shortage, and has been one for a long time. As someone who has extensive experience in the trucking industry, I can safely tell you, there is no driver shortage. Sorry, the driver shortage is another urban legend, conspiracy theory, fake news, whatever description you wish to use to describe something that doesn’t really exist. Before you stop reading and call me an idiot who is ignoring economic reality, allow me to elucidate. Transport companies defy the laws of economics, in that as something becomes rare, or the demand rises, the price of the object or commodity tends to rise as well. That is not really the case with truck drivers. The economy picks up, but truck driver wages do not respond in kind, at least not to the degree of economic increase that creates more demand for them. The shortage is trucking companies willing to pay decent wages. While we like to philosophically say people do things like work because they like doing them, many people work in occupations which they really do not enjoy. The idea of working hard, being away from home, and then not making much money is the worst of the worst. From my experience in the trucking industry, if the trucking firms paid more money, there would not be any shortage of truck drivers. The following paragraphs will offer more explanations of a rather complex situation.
A recent article by Rachel Premack in Business Insider of August 6, 2018, offered up an explanation by a truck driver who had driven in England, Canada and the United States. The well-traveled trucker, Mick Flynn, explained the driver shortage in one word. Money. Maybe I should repeat that; Mr. Flynn described the driver shortage as one of money, as in compensation, pay, wages, what people get paid to do things for other people. Doctors, lawyers, dentists, nurses, managers, programmers, all have seen their wages rise in the past few decades, some rising dramatically. Dramatically rising wages does not describe truck driving jobs.
When there’s a shortage of something, the price tends to go up. While I keep seeing the complaints about driver shortages, what I do not see are headlines stating that driver wages are soaring. Like almost all of the blue-collar wages in the U.S., truck driver pay has stagnated, and now that the economy is picking up, with the prospects of low wages for hard work, few people wish to get behind the wheel, spend weeks away from home, and sometimes work sixty-hour weeks for a paycheck that they could have made flipping burgers at the local fast-food outlet, and they would have been able to spend time with their family. In the U.S., most drivers are paid by the miles that they drive. In England, drivers are paid by the hour, which Mr. Flynn describes quite adeptly. If you are a driver in the truck in England, you are being paid, whether it is waiting to get loaded, unloaded, stopped because of weather, traffic of anything else. In the U.S., truckers generally do not get paid for waiting all day for their truck to get loaded, or unloaded, stopped in traffic or by weather. U.S. drivers get paid the miles from origin to destination, and that is about the extent of their compensation. From my experience, U.S. drivers also get miles from origin to destination reduced by only getting paid the mileage only from the county of origin to the county of delivery, which can in some cases mean twenty miles or more, unpaid, taken off the load delivered. Take the twenty miles times five loads delivered in a week, and the driver has lost a significant amount of money. Nice trick if you can do it, and I have seen it.
The trucking companies want to bring in drivers from south of the border, and some of them can barely speak English, but the trucking companies don’t mind, they just want someone to get behind the wheel and get that cargo to the customer. If getting paid three-hundred dollars for working a sixty-hour week is acceptable, where they drove a total of six-hundred miles but spent the balance of their time waiting for the truck to get loaded or unloaded, then it suits the trucking companies quite well. The trucking companies can always hire bilingual dispatchers who can talk to both the customers and drivers and solve any problems. Bilingual dispatchers are becoming a hot commodity.
There are high-paying trucking jobs, don’t get me wrong. In my experience as a trucking manager, I have met drivers who made over sixty-thousand dollars a year, but that is the exception, not the rule. I have seen drivers spend weeks out on the road, away from their families and, as noted, made less than four-hundred dollars a week. The trucking companies are asking a lot of their drivers, and, for the most part, the drivers aren’t being paid what their sacrifices are worth. Hence, a shortage of drivers.
I will address one other major problem with trucking. The driver from England, Flynn, said that when the roads became icy, in England, they stopped until it was safer to drive. In many instances in the U.S. the freight is J.I.T., meaning Just In Time. This no-longer-new idea originated in Japan, where the parts are delivered just in time to be taken to the assembly line and the parts are rolling off the assembly line as part of a finished product in less than eight hours. The supply chains of the auto manufacturers are as tight as banjo strings, and the trucking companies agree to pay fines if the deliveries are late and shut down the assembly lines. What those fines mean is that weather, traffic, breakdown, driver illness or any other delay means the trucking company pays for the delay. One of the companies I worked for got a bill for $128k for shutting down their assembly line. The modern manufacturers do not have so much as one shift of spare parts to maintain their production. There was once a very small article in The Wall Street Journal about a Japanese auto manufacturer whose production lines were shut down because of an $.89 piston ring. The manufacturer lost three million dollars for lack of a part worth less than a dollar. Most of the supply-chain management designers have never been behind the wheel of a truck and know very little about transportation, but the trucking companies sign up and risk, as the company I worked for, well over one-hundred thousand dollars for one late delivery.
One of the best ways to compare things is to take the mentality and put it in another situation and see if it works. I will take my car to the repair shop, and I will try to get them to agree on a time when they will be finished working on my car. If they are not finished working on my car when they promised, they will have to pay me fifty dollars an hour until the car is repaired. No auto repair shop would do that because of all of the unknown factors that could delay finishing my car. The same idea could be applied to trucking, where things you never planned on can delay delivery, but the fines are the same, because the trucking companies are willing to pay for late deliveries. These JIT delivery agreements create unbelievable stress on everyone. I cannot count how many times I was threatened that they would call my boss and have me fired because of late deliveries, not to mention the huge fines that the company would be obligated to pay for the late delivery. As one seasoned manager used to say, in an offhand criticism of the managers who agreed to JIT contracts: “I didn’t sign that contract.” No one, (with a few possible exceptions) with dispatch or fleet management experience would sign a contract agreeing to pay exorbitant amounts of money just so a company can save warehouse space.
As a certified professional in Human Resources, I understand, to some extent, that in terms of Human Resources, we have a driver shortage. I also understand why Mick Flynn doesn’t care to be a truck driver in the U.S., because in the U.S. you get paid by the mile, and in England, you get paid if you are on the job, getting loaded, unloaded, or sitting waiting for the roads to clear. As Flynn says, it’s about the money. Drivers need another method of compensation. Changing compensation would do a lot to end the driver shortage, but I do not look for that to happen any time soon. One of my original quotes (my original quote, as far as I can tell) is: “Those who say money is a poor motivator understand neither money nor motivation.”