The U.S. Is Running Out of Truckers
The supply isn't rising, so freight prices will soar and cut down demand. That's bad for the whole economy.
By
Conor Sen
February 9, 2018, 5:00 AM EST
Not all labor shortages are created equal.
Photographer: Paul J. Richards/AFP/Getty Images
Economists debate how close the U.S. is to full employment, but less often discussed is where the most crucial constraints are in the labor market.
If we have a shortage of line cooks, the economy can adapt without even adding any new line cooks: The wages for existing line cooks would rise, and dining out would become more expensive, inducing some consumers to eat at home instead. This reduces the business at restaurants and eases the shortage of line cooks.
If we have a shortage of bank tellers, financial institutions can raise pay and train new tellers, or can encourage consumers to switch to online banking.
But truck drivers are a different matter, because of how crucial freight is to the U.S. economy. And for a variety of reasons, it's truck drivers that represent the most worrisome constraint on U.S. economic growth at the moment.
The trucking industry is unique because it's the lifeblood of moving goods around the country, representing 70 percent of the nation's freight volume by weight. Without enough trucks and drivers on the road, some combination of things is going to happen: Shipments will be delayed, and producers will have to pay higher prices to get goods to market.
Industry leaders have been complaining about a truck driver shortage for a while, but unlike other industries that have been complaining about worker shortages, we have real evidence both in employment numbers and in business activity that the shortage is starting to have an impact on the economy. The construction industry has been complaining about a worker shortage for years, and yet in the trailing 12 months construction employment has grown by over 200,000 workers. Workers may be tough to find, but the industry is figuring it out.
Not so in trucking. The level of employment in the truck transportation industry, the category broken out in the Bureau of Labor Statistics' employment report, is essentially unchanged since the middle of 2015. This level happens to coincide with the peak attained in the last economic cycle in 2006.
Companies have been highlighting freight constraints in their fourth-quarter earnings calls as being responsible for higher operating costs and lower profit margins. Hershey noted that their adjusted gross margin fell by 180 basis points in part because of higher freight costs. Clorox said gross margins are going to fall because of higher transportation costs. Food service company Sysco noted the same. All three are over $10 billion companies whose shares fell sharply on the news.
There's no reason to think the labor situation in the trucking industry should get better any time soon. Everyone in business and the technology sectors is talking about a future of self-driving trucks -- hardly giving prospective workers the incentive to commit to multi-week classes to attain a commercial driver's license for an industry that might be going away. In the short term, truckers must switch from logging their hours on paper to doing it electronically by April 1 or face penalties, which may reduce driver capacity by no longer allowing drivers to fudge their hours on paper to stay on the road longer.
Some labor market economists are concerned that even though the stated unemployment rate is low, the employment-to-population ratio for prime-age workers between the ages of 25 and 54 is still moderately below the peaks of the last two economic cycles, suggesting the labor market is still not at its full potential. But if we can't find additional truck drivers, this places a constraint on what types of economic growth are still possible. If someone wants to open a new factory and finds the workers to build products, but the cost of freight is too high because of a truck driver shortage, then that business becomes uneconomical and the U.S. economy has forgone output.
The U.S. Is Running Out of Truckers
The U.S. Is Running Out of Truckers
Discussion in 'Experienced Truckers' Advice' started by rickybobby, Feb 10, 2018.
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aussiejosh, jraulpilot1998 and Vic Firth Thank this.
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Another driver shortage article
Toomanybikes, Swedish Chef, Vic Firth and 4 others Thank this. -
Time for companies like Swift, Schneider, and others to pay their drivers more. I mean honestly I think Schneider pays their drivers about 32¢ a mile. Who wants to be a trucker at that wage when you can make almost the same working construction with less headache and sleeping in you're bed every night. The greed of the megas will destroy trucking.
RubyEagle, Toomanybikes, Texas_hwy_287 and 3 others Thank this. -
Good article. Where's my increased pay?
Short Fuse EOD, Zaros, Tall Mike and 1 other person Thank this. -
I’d love to see those automated trucks they talk about drag a load of logs off of a 16% grade with swithbacks so tight a car would struggle.
Flatbed Cowgirl, Rollr4872, Woodys and 13 others Thank this. -
Until that happens, Elon Musk can suck it. -
Robots are gonna want pay raises too.
Texas_hwy_287, Steel Dragon and tech10171968 Thank this. -
And just think of all the BS a driver has to put up with for that measly 32¢ a mile: surprise DOT inspections (which mean you pretty much waive at least some of your 4th Amendment rights); a dysfunctional family life (and pretty much no social life); 4-wheelers playing daredevil around your truck - and blaming you when their antics finally catch up to them; companies, LE, local/state/federal lawmakers putting you in a position where you have to break one law to follow another; being seen (and treated) as something less than a human being by pretty much everyone around you (sometimes this even includes other drivers); I could go on but you get the picture.
I could probably hang up my keys right now and get a job with 30% less pay - and about 80% fewer headaches. Sometimes I wonder why we still have as many truckers on the road as we do now, LOL!Lime Hauler, 386lover, lilillill and 4 others Thank this. -
tech10171968 and Steel Dragon Thank this.
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The imports love driving our roads. But hate speaking English. And think the money is great. Than they send most of their earning cross the border. This is our economy.
Toomanybikes, Eldiablo, IluvCATS and 1 other person Thank this.
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