America’s trucker shortage could undermine economy
America’s trucker shortage could undermine economy
By Heather Long Posted Jun 28, 2018 at 12:23 PM
LAKE MILTON, Ohio - Bob Blocksom, an 87-year-old former insurance salesman, needs a job. He hasn’t saved enough money for his retirement. And trucking companies, desperate for workers, are willing to give him one.
Age didn’t matter, they said. If Blocksom could get his “CDL” - commercial driver’s license - they would hire him for a $50,000 job. One even offered to pay his tuition for driver training school, but there was a catch: Blocksom had to commit to driving an 18-wheel truck all over America for a year.
So far, that has been too big of an ask for Blocksom, who doesn’t want to spend long stretches of time away from his wife of 60 years. “The more I think about it, it would be tough to be on the road Monday through Friday,” he said.
As the nation grapples with a historically low level of unemployment, trucking companies are doing what economists have said firms need to do to attract and retain workers: They’re hiking pay significantly, offering bonuses and even recruiting people they previously wouldn’t have considered.
But it’s not working. The industry reports a growing labor shortage - 63,000 open positions this year, a number expected to more than double in coming years - that could have wide-ranging impacts on the American economy.
Nearly every item sold in America touches a truck at some point, which explains why the challenges facing the industry, including trucking companies rapidly raising prices as they raise wages, have special power to affect the entire economy. Already, delivery delays are common, and businesses such as Amazon, General Mills and Tyson Foods are raising prices as they pass higher transportation costs along to consumers. A Walmart executive called rising transportation costs the company’s primary “head wind” on a recent call with investors.
Technology leaders such as Elon Musk hold out driverless trucks as a solution, but industry insiders say that is many years away. For now the industry simply can’t find a way to move goods as fast and as cheaply as they have in the past. This logjam will be especially perilous, economists say, if competition for truckers pushes up prices so quickly that the country faces uncontrolled inflation, which can easily lead to a recession.
“This is slowing down the economy already,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “If it takes me a week instead of two days to ship products from point A to B, I’m losing potential business.”
At TDDS Technical Institute, an independent trucker school in central Ohio where Blocksom has considered enrolling, veteran teachers say they have never seen it this bad. They think there are closer to 100,000 truck driver openings.
“As long as you can get in and out of a truck and pass a physical, a trucking company will take a look at you now,” said Trish Sammons, the job placement coordinator at TDDS, whose desk is full of toy trucks and fliers from the companies who call her daily begging for drivers. “I recently placed someone who served time for manslaughter.”
There’s only one option right now for most trucking companies: Give substantial raises. Recruiters that show up daily at TDDS are offering jobs that pay $60,000 to $70,000, with full benefits and a $4,000 signing bonus.
In interviews with more than 60 trainees, recruiters and people who explored trucking but decided not to take the job, most feel higher pay will help, but the industry’s problems are much deeper than that.
Trucking remains one of the most dangerous professions in America. There were over 1,000 fatalities among motor vehicle operators in 2016, according to the U.S. Labor Department, meaning being a commercial driver is nearly eight times as deadly as being a law enforcement officer.
“It takes a special breed to be a trucker. It’s a tough job,” said Rick Rathburn Jr., the owner of TDDS, a school his late father started in the early 1970s. A trucking company recently tried to buy the entire school.
The community around TDDS is full of shuttered factories and bars named “Lucky Inn” and “Horseshoe.” The steel mills closed in the 1980s, and a GM factory just announced more than a thousand layoffs. One of the only industries growing in the area is trucking, yet locals are hesitant to become truckers.
One man, a janitor, hanging out at Larry’s Automotive repair shop in nearby Warren, said his uncles were truckers and told him they would “kill him” if he ever got into the harsh business. The owner of the shop said he had thought about becoming a trucker but decided it wasn’t feasible after he had children.
Trucking jobs require people to leave their families for weeks at a time and live in a small “cabin” with a hard bed. Divorces are common, veteran drivers say, and their children forget them. A life on the road is often costly and unhealthy. Drivers sit for hours a day in diesel trucks and pull into truck stops that typically serve greasy hot dogs and chili.
Weight gain and heart disease are common, says Gordon Zellers, an Ohio physician who spends half his time examining truckers and administering drug tests, which increasing numbers of CDL applicants fail. He advised the TDDS students to see a nutritionist, but he knows most won’t.
Alex Thomas and Rob Neal are two of the youngest students at TDDS - Thomas is 26 and Neal is 28. As they sat in a truck in the TDDS parking lot practicing, they joked with each other about which one would be the first to develop a “trucker’s belly.”
Thomas and Neal had construction jobs before they enrolled in the 16-week course at TDDS.
Trucking often competes with construction and manufacturing for workers. Both of those industries have been on a hiring spree lately as well, and unlike trucking, construction and factory jobs typically don’t require additional schooling. To get a commercial driver’s license, an applicant needs to attend several weeks of school, which can cost about $7,000 before financial aid.
The two young men who switched into trucking say they’re doing it for the money and, they hope, more freedom. But many of their friends were surprised by the move.
“I used to work in a sand and gravel pit. Workers in the pit called the truckers scum,” said Thomas.
As it has trouble recruiting new workers, the industry is also struggling to hold on to drivers. Turnover in the trucking industry has skyrocketed to 94 percent, according to the American Trucking Associations, meaning most drivers at the major trucking companies don’t spend more than a year in their jobs.
That reflects a combination of poaching and quitting. (A new government requirement went into effect in December that requires all drivers to electronically log their hours, meaning they can no longer cheat regulations by driving more than 11 hours a day.)
People with CDLs suddenly seem as coveted as computer programmers. Trucking company recruiters descend daily on America’s roughly truck driver training schools - roughly 500, according to the Commercial Vehicle Training Association - to fight for new graduates.
“These guys are like diamonds right now,” said Jason Olesh, a vice president at Aim Transportation Solutions who left his family vacation to rush to TDDS to talk to students. “We’re down 90 drivers across our fleet of 650.”
Olesh gave his best pitch to the students: He offered them jobs that pay $70,000 a year with full benefits and regional routes hauling water to oil drilling sites that would have them home most nights.
“I’m offering you a regular job with a 10- to 12-hour shift so you can see your kids,” Olesh said.
He never used to recruit drivers right out of school because his jobs are the coveted ones in the industry that don’t require drivers to go “over the road,” trucker speak for being away from home for at least a month. But he started coming to TDDS this year because the company needs drivers so badly that it is lowering the bar for new hires.
At the end of his session, a few students gave Olesh their contact information, not enough to even make a dent in the job openings he has.
Lately the industry has tried to broaden its appeal, but women still make up just 6 percent of drivers, and African Americans only 10 percent. Still, trucking can be a pathway to a middle-class life. TDDS alumni often stop by, including many Somali refugees who’ve been trained there.
But while the TDDS faculty love trucking and serve as cheerleaders for the industry, most of their own children have gone to college and now work desk jobs.
“Trucking is seen as a last resort if people can’t find another job,” said Otto Smith, an admissions representative at TDDS. “We’re a hidden diamond for people looking for work.”