Driver Recruitment Strong Despite Uncertain Economy
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The trucking industry’s push to recruit drivers is as strong as ever despite signs freight demand may be softening.
“Supply chain talent has been in short supply for some time,” said Sylvie Thompson, vice president of consumer brands, retail and distribution practices at NTT DATA Services. “The drop out of a large portion of the labor force over the pandemic just amplified it. Overall, we need to grow the talent pool — we need to attract new people into supply chain fields and develop them. Just waiting for them to come will not work.”
The 2022 Third-Party Logistics Study found Sept. 19 that 78% of shippers and 56% of 3PLs reported that labor shortages have impacted their supply chain operations. Hourly workers such as pickers and packers and licensed hourly workers such as truck drivers and equipment operators continue to be the hardest roles for companies to hire and retain. NTT Data Services developed the study alongside Penske Logistics.
“[Third-party logistics companies] are taking the shortage more seriously which makes sense because their business does not exist without strong supply chain talent,” Thompson said. “They are being far more creative with alternative benefits, they see the need to develop talent through apprenticeship programs and certifications. Companies seem to still be on the path of ‘I will just pay more, give bigger bonuses and steal trained talent from others,’ which is what they are doing.”
American Trucking Associations estimates the shortage of professional truck drivers is about 80,000. Sourcing Industry Group President Dawn Tiura sees this shortfall as one of the reasons the industry has been fairly agnostic to market trends when it comes to driver recruiting.
“It’s a little bit of softening,” Tiura said. “You got pilot shortages, you have dockworker shortages and then we have the longhaul shortages. All of that combined is the perfect storm that isn’t going to be corrected any time soon. They changed the driver’s license requirements. They dropped the age to 18 from 21. They’re trying to get more people into the workforce that way. But it’s just not going smoothly.”
The Sourcing Industry Group recently had a meeting with various chief procurement officers and supply chain leaders. Tiura recalled how a human resource specialist there mentioned that because labor demand is so high anyone who truly has a desire to work is only going to be out of a job for 10 days on average.
“The people looking, the candidates, have the upper hand still,” Tiura said. “There’s a little bit of softening in demand for things like seasonal workers, but that’s only slight and that’s only based on a perception that with inflation and everything else, that buying will be down in the fourth quarter compared to the last two years when people were at home. But that’s still very slight.”
Tiura noted that longhaul truck drivers have seen a big increase in options recently. That includes shorthaul or last-mile driving positions becoming more desirable due to increased wages. She also pointed to warehouses as an alternative to longhaul driving that has become more desirable in recent years.
“We have a severe trucking shortage for longhaul,” Tiura said. “A lot of the reasons is because so much has gone into e-commerce and online purchasing that the last-mile delivery guy is now critical to the supply chain, getting the goods to you. I think that it is a shift of where people want to work.”
Uber Freight found in its Market Update & Outlook report for the third quarter that supply chain constraints were easing as the market continued to add truck drivers and equipment. Employment for long-distance truckers increased 9% from a year prior. But at the same time, consumer spending was stagnant and reversing back to its long-term trend.
“Employment remained like 5% or 6% below its pre-COVID level for about a year after 2020,” said Mazen Danaf, senior economist at Uber Freight. “Then it started rising gradually last year. But the real increases we have seen were this year.”
Danaf noted that the softening freight demand is primarily happening in the spot market. The contract market has actually seen an increase in demand this year. He also pointed out that many owner-operators are abandoning their independent authority to work for larger carriers because it has become more difficult to sustain themselves with the higher fuel prices and the lower spot rates.
“What this means is that capacity is not exiting the market due to failures or due to bankruptcies, but instead it’s just a relocation of capacity from owner-operators to fleet,” Danaf said. “A lot of these larger fleets are not operating in the spot market. They’re operating in the contract market and that’s why they are not seeing any reduction in demand really. They’re seeing the opposite, which is an increase in demand this year. That’s why they’re continuing to hire drivers.”
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