Trucking industry scrambles to hire drivers
Brendan Comito’s busy season is fast approaching at Capital City Fruit Inc., and even though he’s using every recruiting method he can think of, it’s taking him about twice as long as before to find qualified drivers for his delivery trucks.
Comito, the company’s chief operations officer, shares a similar predicament with others battling a nationwide shortage of truck drivers caused in part by a large number of retiring drivers. Trucking companies are trying to attract new drivers into the field by increasing pay and scaling back the long stretches of time spent away from home. But even then, these measures are barely making a dent in an estimated deficit of 195,000 drivers.
“I think that with the way that it’s going right now, you have to try every avenue available to find truck drivers who are the right fit for your company,” Comito said. “We’ve been doing signs, advertising, using temp agencies and search firms. You have to spend about 30 to 40 percent more with the advertising, and it still takes twice as long as it did before last year to find drivers.”
Comito’s goal is to have about a dozen drivers to make deliveries to Capital City Fruit’s clients across Iowa and neighboring Midwestern states, and the trucker shortage is greatly magnified for cartage companies with fleets of hundreds or thousands of trucks.
Last month, Green Bay, Wis.-based Schneider National Inc., which operates a national fleet of 15,500 rigs, held a job fair in the Quad Cities to recruit 100 additional drivers. Although turnout was good, Mike Norder, a Schneider National spokesman, said it appears that the company still fall short of its hiring goal. He said it can be more difficult to recruit drivers in Iowa than in other parts of the country because of the state’s “stable sources of employment make it difficult to find new people to enter trucking.”
Bob Sturgeon, the owner and chairman of Barr-Nunn Transportation Inc. in Grimes, estimates that he has enough work to keep another 100 drivers busy, but steep competition for drivers has limited his company’s growth potential.
“The biggest impediment to our ability to grow our company is the shortage of drivers,” Sturgeon said. “Sometimes we just can’t get enough power to everyone on a given day, which limits our ability to serve our good customers. We hate to turn down customers when they have a load to be delivered.”
Barr-Nunn operates about 650 trucks, a number which Sturgeon said has stayed fairly level over the past few years. Ideally, the company would have hired more drivers and added more rigs to keep up with an increased amount of cargo produced by recent economic growth. Some loads are now taking longer to move because there aren’t enough drivers to keep up with the demand, Sturgeon said.
Scott Weiser, the president of the Iowa Motor Truck Association, said some of the organization’s 700 member companies are reporting similar bottlenecks.
“The industry had some tough years in 2001 and 2003, which caused a lot of shake-up and people leaving the industry,” Weiser said. “When the market started to turn around last year, there weren’t enough drivers or equipment left to handle the loads.”
Weiser said the trucking industry has been plagued by “one challenge after another” in recent years. Jimmy DeMatteis, president of Des Moines Truck Brokers Inc., said more stringent government regulations have changed the trucking industry significantly compared to what it was like when he started working in the business more than 20 years ago.
“When I drove trucks during the summers while I was in college, trucking was a neat way for me to see the country, but things have changed,” DeMatteis said. “Now I think it’s an awfully hard life for young people.”
The industry’s regulatory climate began to worsen following the Sept. 11, 2001, terrorist attacks, DeMatteis said.
“Changes originating from the U.S. Department of Transportation since 9/11 have affected the industry by causing insurance rates to skyrocket,” DeMatteis said.
Then within the last two years, the federal government imposed major restrictions on truck drivers’ hours of operation. The new rules limit the number of hours of driving time a truck driver can log in an eight-day cycle and restrict daily shifts to 14 hours from start to finish or 11 consecutive hours of driving.
“Many drivers are paid by the number of miles they drive, and when the government changed the hours-of-service rules, it made trucking not as attractive to some veteran drivers because it put limitations on the amount of money they were able to make,” DeMatteis said.
Truck drivers are required to follow the hours-of-service laws, but some of their customers have not changed their expectations accordingly, DeMatteis said.
“Loads still have to get from California to Des Moines, and shippers will tell you upfront on a Friday afternoon that it needs to be there by Sunday morning,” DeMatteis said. “When the shipping community doesn’t buy in to the new regulations, it puts trucking companies in a tough position.”
Shippers and receivers can also make truck drivers’ lives difficult by failing to give them adequate respect, DeMatteis said, which contributes to driver turnover.
“It’s a hard job, and quite often, shippers and receivers have seemed to take the drivers for granted,” DeMatteis said. “Everyone works on time-sensitive schedules now because many use just-in-time inventory systems to reduce costs. It’s inevitable that a guy is going to be late sometimes due to traffic, and it tugs on their nerves when they’re attacked for being a little late after having driven straight through the night to get the load there.”
At the same time, a stretched-thin motor carrier system has helped the trucking industry regain some control over pricing, according to Dave Pfiffner, the director of the Des Moines Area Community College Transportation Institute, which trains novice truck drivers.
“The last two years have been a golden era for trucking companies in terms of making money,” Pfiffner said. “It’s a really good time right for trucking because most of the companies are raising pay for drivers to attract them to the industry, and their clients are absorbing some of that cost because there’s such a shortage of people to move the freight and they want to keep their shelves stocked.”
In addition to offering bigger paychecks, Pfiffner said, motor carrier companies are “bending over backwards” to improve the lifestyles of truck drivers who want to be home regularly with their families. Schneider National’s Norder said his company has tried both of these things and more.
“In February, we rolled out the largest pay increase in our company’s 70-year history,” Norder said. “And as our business continues to grow, we are identifying more regional and dedicated accounts that would allow our drivers to have more predictable schedules and be home more regularly. We are purchasing more than 3,200 state-of-the- art tractors this year to improve drivers’ comfort level while they’re on the road.”
Pfiffner said, on average, his students receive five or six job offers, each paying around $40,000, upon graduating from DMACC’s six-week day course or 12-week night course. He estimates that the college will train about 200 students during the 12 months ending in July, up slightly from 181 last year. He said he is sure that more students are interested in the training, but the cost holds them back.
“Most who come through this program have financial need, and since it is a continuing education program that is only six weeks long, this program doesn’t qualify for federal or state student aid, at least not the normal guaranteed student loans,” he said. “The program’s price tag of $3,500 is not cheap, and we could have more students if we could take care of our funding issues.”
DeMatteis said no single reform is going to reverse the driver shortage right now, but that better pay, more respect for drivers and better schedules are steps in the right direction.
“I kind of liken today’s truckers to the last of the American cowboys,” DeMatteis said. “Some are out on the road away from their families for weeks at a time, kind of like the cowboys that moved livestock across the country. It’s a hard job, but at least the ones who have weathered the storm are finally starting to make some money.”
Gas prices dent profit margins
Motor carrier companies are paying 65 percent more for diesel now than a year ago, according to the U.S. Department of Energy’s Web site, which reported the average pump across the nation at $2.30 as of April 4.
Fortunately, trucking companies’ clients are absorbing some of the additional cost of transporting loads by paying fuel surcharges, which are adjusted each week to reflect pump prices across the nation, according to Bob Sturgeon, the chairman and owner of Barr-Nunn Transportation Inc. based in Grimes.
“Our good customers are working with us real well with our fuel surcharges,” Sturgeon said. “It’s absolutely essential that the rates are adjustable through a fuel surcharge because we couldn’t absorb the costs otherwise.”
Jimmy DeMatteis, the president of Des Moines Truck Brokers Inc., said reduced carrier capacity as a result of an industry-wide shortage of drivers makes clients willing to pay surcharges, which were harder to implement three or four years ago. But a few clients still try to dictate how much they are willing to pay for fuel surcharges, instead of paying what trucking companies are asking.
“When you’re driving 1,800 miles from California to Des Moines and getting 5 miles to the gallon on double-digit fuel increases, that adds up to an incredible increase, especially to owner-operated carriers who have a lot at stake.”