Business & Investment

Trucking Job Growth — What Causes Congratulations and Concerns?

The number of trucking jobs in March can be considered as half full or half empty glass. There are benefits to both perspectives.

by US Bureau of Labor Statistics (BLS)Total employment in March increased by 3,300 from the February tally to 1,482,700. This shows that things are heading in the right direction.

On the other hand, the numbers for March are total 33,500 Trucking jobs are less than in March last year, just as the industry was on the verge of a pandemic. This indicates that there is still a long way to go and it may be in the early stages of recovery.

“The economic recovery has accelerated in the last two months or so, and we expect very active economic growth,” he said. Reliance Partner Chief Financial Officer Tom Albrecht suggests that gross domestic product (GDP) growth could be comparable to 7.9% economic growth in 1983. “This year’s economic growth is likely to be 6% to 7%, so it’s improving. As the year goes on, it will become more visible in the number of jobs.”

Albrecht states that this recovery is different in most cases, given the sudden shock to the system last spring. He said job recovery is usually known to lag behind GDP growth, as companies’ cost-cutting strategies are in place by the time the economy turns upwards.

This time it seems that a lot of work was lost overnight. Many drivers got a job quickly, but others have not yet regained their position in the industry. However, Albrecht hopes that the lost work will be restored in a year.

Last year, companies fell due to cuts in capital investment budgets, but this year we are trying to reverse that trend. Albrecht expects companies to be more aggressive in considering expansion plans and create more jobs in flatbed freight, a sector that was sluggish last year.

“When you peel off the onions, you start to face other issues that need to be considered a bit more, such as whether you have structural or cyclical employment issues. Which job group is recovering or lagging back? What’s the job you’re not doing? There are many questions about that broad topic of the job market, “says Albrecht.

The truck industry is aiming to return to pre-pandemic performance levels, but the question remains whether its workforce can achieve long-term growth after recovery. After all BLS According to the data, employment of heavy truck and trailer truck drivers is projected to increase by only 2% from 2019 to 2029, slower than the average for all occupations.

The elephant in the room is that there is always a shortage of truck drivers. An important factor is the aging of the existing workforce. According to a survey by the American Trucking Associations, the average age of drivers in the for-hire over-the-road (OTR) trucking industry is 46..By comparison, BLS data show the median age of the US workforce 41.9 As of 2019.

Albrecht is not optimistic about the immediate influx of new drivers in trucking.

“Ultimately, the success of a driver in one carrier will probably come at the expense of another,” Albrecht said. “In most cases, truck drivers [the industry] Get a large injection of new people into the truck driver population. “

While freight demand continues to grow, he believes that hiring drivers will probably remain the biggest challenge for the truck industry in the last decade. “There will be demand, but the question remains whether the fleet will join a niche that is growing above GDP,” he added.

Also, the labor force participation rate in the United States is currently 61.5%Has been improving gradually since it bottomed out at 60.2% in April last year. However, the current labor market has a long way to go to reach about 63% of what it was before the pandemic.

“It doesn’t sound like the whole thing [of change]But not included in these statistics are estimates of 3 or 4 million people who have not yet returned to the workforce due to disappointment from work prospects, “Albrecht said. He added that the 61.5% percentage was not. Given that the rates in the 1990s were close to 66% -67%, it’s healthy.

As many predict, if the number of driver class graduates actually declines in the next few years, fleets will need to find ways to maintain their current workforce in-house.

“Every career I’ve talked to is pulling every lever they can think of,” Albrecht said.

More and more fleets are using salary increases not only to attract drivers, but also to maintain a veteran workforce. Albrecht describes compensation as the only factor that prevents drivers from leaving the negotiating table.

Earlier this month, Knight-Swift announced a driver salary increase. This is the latest in a series of salary increases and incentives enacted within the last six months. Details of April announcement Increased wages per mile 2 cents for that OTR driver. Similarly, an increase of 3-5 cents was announced for OTR’s independent contractors.

that is report Its experienced drivers can start earning more than 50 cents per mile, and even some people in certain parts of the country earn more than 60 cents per mile. In addition, post-training salaries for new employees have been reported to have increased by at least 40%.

Also announced Crete Carrier and Shaffer Trucking Plan to raise driver wages For OTR fleets in the region and across the country. Starting in May, new OTR drivers will be paid 59-65 cents per mile, depending on their level of experience. FreightWaves reported that the carrier expects the salary increase to bring top-class OTR drivers to an average annual salary of $ 89,300. This is an unprecedented number for most trucking companies.

Old Dominion Freight Line also announced promotion of adoption 800 Class ACDL truck driver for the next 3 months. According to the company, all new employees will receive an annual salary in the range of $ 73,000 for pickup and delivery drivers and $ 99,000 for line hall drivers.

BLS data Shows that the median annual salary for heavy and trailer truck drivers in May 2020 was $ 47,130. In addition, the minimum 10% income is less than $ 30,660 and the maximum 10% income is over $ 69,480.

“I believe [wages] Stickiness remains. They will continue to rise, but just as fares will level off next year, driver wages will probably level off, “Albrecht said. “However, [freight] As rates go up, you have no choice but to go out and raise your driver’s wages, unless there is a reason other than that most of the competitors competing for the driver are already doing it. “

The last decade is becoming a major transition for the truck industry. As technology advances and new rules and regulations continue to change the dynamics of work, trucking companies also need to address the ever-changing demographics of the workforce.

Putting a new face behind the steering wheel is very likely to be the key to the revival of the industry. Albrecht believes that the active adoption of non-traditional demographics could improve the labor rate in the industry.

Efforts have already been made to involve more Hispanic and African Americans, but Albrecht suggests that the fleet also consider targeting female demographics. He also claims to be an Indian driver and a driver from an Eastern European background, a sub-sector of the trucking industry that he believes has not received enough attention.

Albrecht says Reliance Partners has a total of 25 language-speaking staff to better serve diverse trucking environments. This includes languages ​​that are not often spoken in the United States, such as Russian, Croatian, Ukrainian, and Punjabi. “We have dozens of multilingual employees. Reliance partners are actively hiring future employees who speak multiple languages.”

He continued. “Compared to 20-25 years ago, when a typical driver profile was a white man from the southern half of the United States, driver explosions from other cultures are often one of the secrets of trucking.”

“It must be one of the levers the fleet is willing to consider,” Albrecht said. “Driver schools aren’t fully operational yet, drug-and-alcohol clearinghouses are affecting driver availability, and the overall aging of demographics has led many fleets to engage in difficult battles. I am. “

Click here for more Freight Waves content by Jack Glenn.

You may also like:

Insurance Basics: Intermodal Transport

Female owner / operator perspective

Reliance Partners offers usage-based insurance for the freight industry



Trucking Job Growth — What Causes Congratulations and Concerns?

https://s29755.pcdn.co/news/truck-transportation-job-growth-cause-for-celebration-or-concern Trucking Job Growth — What Causes Congratulations and Concerns?

Back to top button