This story appears in the June 21 print edition of Transport Topics.
Schneider National Inc., the nation’s largest privately held truckload carrier, said that it plans to hire 2,000 more drivers this year — one of the most aggressive hiring drives in its 75-year history and an expansion that by itself would place the company among the 100 largest for-hire trucking fleets.
The massive hiring program was spurred by Schneider’s nationwide expansion of its regional service this year, Marc Rogers, senior vice president of van truckload, told Transport Topics earlier this month.
“Projected hires for the year are primarily based upon an increase in demand, especially for regional services,” Rogers said.
Schneider now has about 13,000 drivers, down from a peak of 15,000.
Schneider ranks No. 9 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada, with $3.7 billion in revenue.
The additional 2,000 drivers alone could generate about $300 million in annual revenue, based on 110,000 miles driven at $1.35 a mile, enough to rank No. 74 on the TT 100 list.
Schneider launched its regional service early in 2008 in seven western states and expanded to 29 states last fall before completing its regional service offering this year.
Rogers said larger customers were first to recognize the value in the company’s regional service, while some smaller customers have moved past what he called a “wait-and-see mode.”
Newer customers wanted to gauge how the strategy of a gradual regional build out beginning on the West Coast and then into other parts of the country has worked out, Rogers said.
“It takes time to make sure you build [regional service] and sustain it,” Rogers explained. “We had to be sure that we did what we are known for: safety and service. We had to learn how to take care of small and medium customers.”
Schneider’s growth spurt came as American Trucking Associations’ latest activity report illustrated a broader industry move, reporting that large truckload fleets in the first quarter boosted their workforce for the first time in 14 quarters.
The total gain of 0.3% reverses the industry’s employment decline, a 15.5% drop in the large truckload workforce since the third quarter of 2006. ATA declined to disclose the total number of jobs added.
“I would expect small gains in employment in the next couple of quarters,” ATA Chief Economist Bob Costello told TT.
“We believe that it will take the rest of the year to get” the 2,000 new drivers hired, said Rogers, noting that Schneider now is about 25% of the way to its goal. “It has been challenging to find experienced and qualified drivers,” Rogers said, describing that situation as an industry trend.
“It will take some ramping up, but those are very attainable numbers,” said Steve Prelipp, an industry consultant who was Schneider’s recruiting director more than two decades ago. “It’s a good strategy to put out there what you are trying to get done.”
“The market is turning quickly,” Rogers said. “It’s hard to find drivers and hard for shippers to find carriers.”
“More drivers definitely want the home time that regional offers,” Rogers said. “That is part of the reason we went to this strategy.” Schneider has several regional work schedules, including five days working and two days off, or 10 days of work in a 14-day period.
“Schneider is out in the forefront of realizing that there will be a shortage of drivers,” said Eric Starks, president of FTR Associates, a Nashville, Ind., consulting firm. “They are trying to be ahead of the game.
“Many carriers are still holding back on restarting or expanding driver hiring and training programs for fear the recent small increases in freight demand could reverse,” Starks said.
Several factors were seen hampering industry expansion.
ATA’s Costello said he believes driver hiring will be relatively slow because truck sales remain relatively low and fleets haven’t yet added much new equipment.
Starks attributed it partly to a shortage of administrative personnel. “There is an adequate supply of drivers out there right now, but the ability to get everyone seated into the truck is more difficult because of cutbacks in human resources departments,” he said.
“In the latter part of the year, it will be more difficult” to hire drivers, Starks said. “The easy drivers — the ones that are trained and are well qualified — will be gone.”
FTR estimated that 107,000 drivers can be hired in the third quarter, 70,000 less than the number needed to keep pace with projected volume growth.
Starks said a ray of hope was persistent unemployment in the construction sector, trucking’s main competitor for workers, because that expands the pool of potential drivers.
More than 1 million construction workers lost their jobs last year, and only a fraction has been rehired.
The June 9 State of Logistics Report from the Council of Supply Chain Management Professionals also recognized hiring issues, noting that one in six drivers is more than 55 years old, and the trucking industry has difficulty attracting younger workers.
As its hiring grows, Schneider said, it won’t change its fundamentals. “We won’t be making any compromises in hiring standards,” Rogers said.