As we begin the new year, trucking companies throughout North America are facing the same challenge - - - finding qualified truck drivers. There are several forces shaping the supply of drivers.

The coronavirus is making drivers sick and some have not come back; the virus is also causing older drivers to retire. A surge in business volumes is being experienced in various sectors of the freight economy. Strong market demand and capacity shortages are encouraging more requests from shippers for committed capacity. Having done their homework, some of the biggest shippers are prepared to pay a premium to secure the capacity they need.

As increasing numbers of people work from home, and with the closure of many restaurants and stores, there has been a remarkable upswing in Ecommerce activity. Thousands of drivers have been added to the workforce to perform local deliveries. During this period, an estimated 30,000 drivers have been disqualified in the new U.S. Drug and Alcohol Clearinghouse.

Trucking companies are creating a range of programs to recruit and retain drivers. Roehl Transport (https://www.roehl.jobs) announced a new program to add truck driving jobs to qualified people who stepped away from their commercial driving career for other non-driving employment. “The Roehl Relaunch Program is open to former truck drivers who may have left trucking for positions in construction, manufacturing, retail, and other industries as well as current drivers in local trucking jobs who may not be getting the income they need . . . Drivers who complete the Relaunch program will be given credit for their prior experience rather than starting over at entry level driver pay rates.”

Annual turnover of over the road truckload drivers is currently in the range of 95 percent. The cost of replacing a driver is approximately $8000. This high turnover ratio came during a year in which truck drivers in many fleets received multiple and significant bonuses and pay increases. This begs the question of how well many trucking companies truly understand the needs and requirements of truck drivers.

I recently had the privilege of hearing a presentation from Max Farrell and Andrew Kirpilani, Co-Founders of WorkHound (www.workhound.com). Workhound is a real-time feedback platform for frontline workers. Trucking companies that subscribe to the service request their drivers to submit feedback, praise, problems, and ideas through their smartphones. Workhound distills the data daily into actionable, ready-to-use insights that help manage and retain drivers. Drivers feel empowered, knowing that their feedback is acknowledged; the subscriber that listens to and acts on the feedback receives the bottom-line benefit of a happier, motivated team.

What makes Workhound’s approach different from other standard marketing research tools? The answer is that drivers that provide their feedback to Workhound are not limited to responding to a highly structured questionnaire that has built-in biases and specific agendas. Rather, drivers are prompted weekly to share their experiences, any experiences and observations, good or bad. They are free to write about any aspect of their jobs. The link to share their feedback is open 24/7 and the driver can use his or her smartphone to enter their insights. Eighty-seven percent of the drivers in the data base use a smartphone. Workhound continuously monitors the feedback and sorts them into twelve themes.

Companies that receive this feedback are encouraged to respond individually or collectively to the problems that are raised. Workhound’s trucking company customers have 60+ trucks in their fleets. They have a mix of tanker, reefer, dry van, flatbed, and expedited trailers. The data base consists of 77% Company Drivers and 23% Owner Operators.

On Monday, November 26, 2018, General Motors announced that it will be closing five plants in North America in 2019, four in the USA and one in Canada. In addition to the closures, 6000 hourly workers and 8000 salaried employees will lose their jobs. “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said GM Chairman and CEO Mary Barra. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

The press release goes on to say that “GM has recently invested in newer, highly efficient vehicle architectures, especially in trucks, crossovers and SUVs. GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.”

Thirty-five years ago, I began my career in the trucking industry by working for a company that derived fifty percent of its revenues from the automotive industry. My company worked directly with these plants. I have had the opportunity to visit the GM Oshawa facility on multiple occasions. While there are only 2300 hourly workers that are employed there now, this is an iconic facility in the province of Ontario and in Canada as a whole. This plant has been a symbol to Canadians, for a century, of the importance of the automobile manufacturing and assembly industry.

Over the past few years, one of the defining challenges in the freight transportation industry has been a shortage of qualified drivers. In April of this year, I posted a blog (https://www.dantranscon.com/index.php/blog/entry/what-are-trucking-companies-doing-to-solve-the-driver-shortage ) that examined the range of compensation tools and benefits that are being offered to recruit and retain drivers. In another blog (https://www.dantranscon.com/index.php/blog/entry/trying-to-solve-the-driver-shortage-try-paying-them-a-salary ), I suggested that some trucking companies should consider paying, at least some of their drivers, an hourly rate or salary. The following are some additional compensation schemes that carriers are employing and a few thoughts on the effectiveness of these programs.

Multiple Pay Increases in the same year

To stay competitive, some carriers are providing their drivers with multiple pay increases to ensure they stay on par with the competition.

Payment for Practical Miles

Last week’s TruckWorld event at the International Centre in Toronto was a great opportunity to connect with old friends and get updated on the state of the freight transportation industry. It was clear from the huge attendance at the show that is a very good year to be in trucking. The negotiating leverage has clearly swung over to the carrier side. Shippers are being told to accept rate increases or risk losing their truck capacity to other manufacturers and distributors.

One trucking company owner summed up the state of the industry this way. The industry is facing four problems: drivers, drivers, drivers, and drivers. This caused me to reflect on what various trucking companies are doing to address this issue.

Signing Bonuses

Companies are offering from $2000 to $10,000 bonuses to experienced (one year plus) drivers.