Recruitment Normalizes After Freight Surge Slows
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Recruitment trends in trucking began returning to more normalized levels after a frenzied start to the year that was very much influenced by the COVID-19 pandemic.
“Freight was plentiful, we were still seeing the remnants of the equipment shortage in the first couple of quarters,” said Scott Dismuke, vice president of operations at the Professional Driver Agency. “About mid-to-late summer, we started to see the slowdown in freight and how that was affecting drivers. But also, how it was really affecting our data and the feedback we get from drivers. We saw quite a jump in turnover starting probably mid-Q3, end of Q2 maybe.”
American Trucking Associations said Oct. 25 that its estimate for the industry’s shortage of professional drivers decreased slightly to 78,000 for this year. That compared to an all-time high of 80,000 the year prior. This came after an aggressive push from carriers to recruit drivers that included significant wage increases and a renewed focus on addressing their needs.
“I think companies are just being a lot better about trying to be attractive to younger people, females, different ethnicities, the military,” said Mark Schedler, senior editor of transport management at consulting firm J.J. Keller. “I think those are probably paying some dividends It was so incredibly hard to find good drivers. It’s kind of like if you have an abscess tooth and you start taking an antibiotic, you don’t feel like using a pair of pliers to rip your teeth out anymore. But it still hurts a lot.”
2022 Year in ReviewCongress and Infrastructure | Ports Regulatory | Equipment | Recruiting
The Professional Driver Agency and Conversion Interactive Agency found in a Nov. 10 survey that 22.1% of drivers have seen their miles decrease due to lower freight volumes over the past six to 12 months. Another 5.5% also saw their miles decrease, but for reasons other than lower freight volume. The survey also found 27.2% saw their miles fluctuate due to lower freight volumes.
“We started to see a jump in data as it related to compensation, particularly as it related to drivers complaining about miles or lack thereof,” Dismuke said. “And so, as I looked at the trend line on our compensation issues, they jumped about 10% from September to October — which is when we really saw more of a spike in turnover, at the end of summer and beginning of fall.” He added, “The trend lines for compensation issues have stayed at that level throughout the fall and even as we’ve started early into December, we see those numbers staying the same.”
Cowen and Co. analyst Jason Seidl noted driver recruitment was a big concern at the start of the year, but has gradually become less of one. Based on his conversations with public and private carriers, he believes recruitment concerns will remain subdued, resulting in a softening of wage increases.
“I think as we moved throughout the year you had more drivers come into the marketplace,” Seidl said. “As people felt more comfortable getting back into the workforce or had a need to get back into the workforce, you started to see more driver availability.”
Earlier in the year Seidl also saw more drivers become owner-operators to pursue high spot rates. But as rates fell and diesel prices became higher, many returned to driving for carriers. He noted this helped ease the pressure on driver recruitment.
“I think carriers are settled for the moment,” Seidl said. “I would say there has been difficulty in hiring, training and retaining qualified drivers my entire career — that’s nearly three decades in trucking, whether as an analyst or as an operator.” He added, “It’s just difficult to manage labor in this industry. Really difficult, far more than most industries.”
The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment increased by 263,000 in November. However, employment in transportation and warehousing declined by 15,000, and has decreased by 38,000 since July.
“We’ve seen a correction in the freight market from the COVID years — the three years of the increased demand from folks being at home and whatnot,” Dismuke said. “Are we experiencing a full-on freight recession? I’m not really sure. Right now we’re definitely in a correction mode, where it may be going back to the pre-COVID times. But I definitely think it feels like and looks like a slowdown, just because of what the last three years have looked like from that freight surge.”
FourKites data found home- and electronics-related shipments fell 3.9% year-over-year in September and 2.5% in October. The supply-chain-visibility technology company noted there usually is a steady rise in the months leading up to November because of holiday shopping. However, grocery retail related shipments have remained strong.
“This year, retail shipment volumes were a bit lumpier compared to the slow-and-steady increase we typically see for peak season,” Mark Delaney, vice president of industry strategy, retail and consumer packaged goods at FourKites, said. “Excess inventory [and] a fear of shipping delays creating safety stock orders and extended sales promotions collided to create atypical shipping patterns.”
Dismuke noted this is the first real slowdown in freight demand for drivers who entered the industry in the last few years, a factor he believes has contributed to feedback his firm has received showing high turnover and heightened driver concern with miles and compensation. He also noted it’s impacting veteran drivers who got used to the pandemic-era freight surge.
“We’re spending a lot of time talking to drivers about being patient, a lot of time talking to them about communicating with their driver managers, setting their [estimated time of arrival] and [projected time of availability] so their driver managers know when they’re ready for another load,” Dismuke said. “But mainly just about communication and the importance of communication during this time.”
Dismuke urges carriers to make recruiting and retention a priority even as freight demand softens, noting that keeping recruitment pipelines full and retaining drivers now will be critical when the market eventually accelerates.
“Carriers really have to think hard about continuing to spend a little bit of money to keep their recruiting pump primed,” J.J. Keller’s Schedler added. “You have to sort of bite the bullet and keep your name out there, so when things get busy your recruitment isn’t a new face in the market. You’ve got to keep people calling you somehow. And I think in this case, carriers won’t have to shut the spigot off quite as hard.”
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