Is the Trucking Industry in Trouble?
The American Transportation Research Institute (ATRI) recently released its annual survey of the top 10 critical issues facing the trucking industry for 2019. For the third year in a row, the driver shortage and driver retention held firmly atop the list of industry concerns among respondents followed closely by the hours-of-service (HOS) rules as the second most critical industry issue. Below is a summary of the top issues from the ATRI’s report.
According to the latest estimates from the American Trucking Association, there are over 60,000 commercial drivers needed in the United States with a potential shortfall of over 100,000 drivers over the next five years.
The driver shortage is the main problem of the trucking industry in the United States for the third consecutive year in 2019. As we have stated and according to the American Trucking Association, over 60,000 drivers are needed with a possible decrease of over 100,000 drivers in the next five years. This shortage is specifically acute in the over-the-road (OTR) truckload sector wherein the drivers are usually away from their homes for a few weeks at each time. The demand for qualified drivers is still huge in spite of a lesser freight market in 2019 compared to 2018. The fleets are already deciding what to do to counteract the problems.
Here are some proposed strategies for driver shortage by the respondents:
- Requesting the Congress and federal agencies to develop an apprenticeship program to invite, train and retain safe 18-20-year-old interstate drivers to the industry – The industry’s workforce already has an aging demographics so there is a need to recruit younger qualified truck drivers. About 29.3% is over the age of 55. The industry is faced with a lot of driver retirements. There is already a passed law called the DRIVE-Safe Act that was first introduced in Congress in 2018 and was reintroduced in early 2019. This DRIVE-Safe Act would provide 18-20-year-olds to drive interstate and this is viewed by a lot of people in the industry as another clear pathway to allow younger drivers into a trucking career.
- Identifying distinct requirements and issues relating to expanding driver recruitment of women and minorities. According to the data released by the U.S. Department of Labor, the truck driver population has 6.6% females and 40.4% minorities. This is viewed as the no. 1 strategy to counterattack the driver shortage. Also, recruiting more women can be advantageous since female drivers performed well than their male counterparts in each statistically important driving behavior checked and male drivers were more exposed to accidents than female drivers.
- Collecting and comparing safety performance data on 18-20-year-olds who are operating on commercial vehicles intrastate versus 21-24-year-old CMV (commercial motor vehicle) drivers – The current law that we have only allows 18-20-year-olds to drive commercial vehicles within state borders in 48 states. This means that a commercial driver who is 18-20 years old can drive from Houston to El Paso, Texas which is 745 miles. However, the same driver is not legally allowed to continue to travel from El Paso to Las Cruces, New Mexico which is 45 miles. Doing this strategy can help better understand how the safety performance of 18-20-year-old intrastate commercial drivers compares to interstate drivers of those ages 21-24-year-olds. This could produce new information to any future action on expanding the minimum age of commercial driver license minimum age requirement.
Hours-Of-Service (HOS) rules
Motor carriers and drivers alike seek increased flexibility when it comes to HOS rules. A proposed rulemaking has been issued by the FMCSA to make changes to the 30-minute rest break, as well as adding flexibility in the sleeper berth provision that allows the drivers to split their off-duty time into an 8- and 2-hour, or 7- and 3-hour split, with neither period counting against the 14-hour driving window.
Here are some proposed strategies for Hours-Of-Service rules by the respondents:
- Continuing to push for increased flexibility in the current sleeper berth provision. Sleeper berth provision is a provision that states that once driving limits are reached, a driver is needed to be off-duty for at least 10 consecutive hours before they can continue driving. The “driving clock” can only be reset when the drivers take a rest for a minimum of 10 hours. The added hours in the current sleeper berth rule were chosen as a top strategy by a total of 48.6% of respondents. This added flexibility in the rule would allow the drivers to take a rest when they’re tired and would give them an opportunity to adjust their driving schedules to avoid the worst congestion.
- Researching and quantifying the impact of the 30-minute rest break requirement on truck parking shortages. There is apparently a lack of available safe parking for commercial drivers. It has been known that drivers are frequently forced to park in unauthorized or undesignated parking locations and productivity is lost looking for possible parking slots. 30% of the respondents think that the current 30-minute rest break requirement in the Hours-Of-Service rules makes the problem of parking shortages worse and they would like to recommend research to counteract those problems.
- Analyzing how Hours-Of-Service rules might be modified for highly automated trucks and identifying what kind of research and data would be needed to justify future rules changes. 9.2% of the respondents think that it will be important to what kind of changes could be made to the Hours-Of-Service rules once drivers are operating highly automated trucks.
While drivers are benefiting from increased pay, there is concern that driver compensation has not kept pace with inflation and that drivers are not compensated adequately for non-driving duties such as detention wait times. Furthermore, driver compensation has reached a top 10 issue, ranking third in 2019. This is probably due to fleets across the country responding to the driver shortage by increasing the salaries of drivers. It is also apparent that different driver compensation models are expanding such as salary plus, per-load and percentage-of-load. While drivers are experiencing increased salary, there is an issue that driver compensation has not kept pace with inflation and that drivers are also not compensated properly for non-driving duties such as detention wait times.
Here are some proposed strategies for driver compensation by the respondents:
- Analyzing truck driver compensation in relation to other competing employment sectors such as construction for example. While searching for qualified drivers, trucking fleets are always competing with other industries that may offer the same or a much better salary and also provide the workers to be at home every night. It is suggested that research is needed to better understand truck driver compensation in relation to a number of competing industries. This is proposed by 32.6% of respondents.
- Researching the relationship between driver compensation models and driver satisfaction and productivity. We know that driver salary is only part of the solution. However, it still plays a huge role in maintaining driver satisfaction. According to 30.9% of respondents, the best strategy for this certain issue is to quantify the relationship between pay models and driver satisfaction and productivity. Better standardization and equal pay could allow fleets to focus on non-pay factors to encourage new drivers such as home time and equipment.
- Researching and assessing the effectiveness of carrier retention programs that give financial incentives to drivers for their performance in the areas of safety, fuel economy, and trip productivity. When you say driver compensation, this is not limited to direct driver pay. Most fleets utilize performance bonuses as an additional way to compensate and reward drivers for their safe driving and other factors. Studying the ability to produce better results of these bonuses for rewarding and retaining drivers is one of the recommended strategies of 23.5% of respondents.
Delays at customers’ facilities can negatively affect a driver’s ability to comply with the Hours-Of-Service rules and their earnings. Delays can also erode a motor carrier’s profitability. Driver detention ranks fourth for the issues in the trucking industry in 2019. The effects of this problem are numerous and have a direct connection to many of the other issues among the top 10 including Hours-Of-Service, Driver Compensation, Truck Parking, and ELD Mandate. In the recent study of the American Transportation Research Institute, drivers reported a 27.4% increase in delays of 6 or more hours between 2014 and 2018. There are 26 delays of 6 or more hours that have continuous impacts on a driver’s ability to comply with the Hours-Of-Service rules. This negatively affects their earnings and can force them to park in unauthorized or undesignated parking slots if they run out of available on-duty hours before reaching a safe parking space.
Here are some proposed strategies for driver detention:
- Researching the safety and economic impacts of customer detention on truck drivers and trucking operations. December 2015 Fixing America’s Surface Transportation Act or the FAST Act has required the U.S. Department of Transportation Office of Inspector General to hold an audit of detention time impacts on the industry’s safety and productivity. The report found out that driver detention costs truck drivers and motor carriers over $1 billion yearly and may be related to increased crash risk. Furthermore, the study also found that the negative impact of detention on carrier revenue and driver compensation may be larger among smaller fleets (fleets that are less than 50 power units with 20% reporting that they do not charge for excessive detention in order to stay competitive with larger fleets. More than 35% of the respondents think that the first step in solving this issue is to expand more on these studies to fully understand how detention negatively impacts drivers and motor carriers.
- Quantifying impacts on detention times that may have happened since the ELD mandate. The no. 1 solution chosen by 29.9% of respondents for solving detention is to first understand how detention times have changed since the Electronic logging device (ELD) mandate went into effect in December 2017. This is set on the idea that the wait times recorded electronically using an ELD will provide concrete proof of detention and may force shippers and receivers to improve turn times for drivers. However, in the recent study of ATRI, only 17% of drivers reported that they were sharing ELD data with customers to document detention.
- Examining the potential for the creation of a “Shipper of Choice” database to reduce detention times for carriers and drivers. This third proposed solution choice among respondents involves the creation of a database comprising those customer locations where detention is minimized or non-existent. A designation called “Shipper of Choice” specifically when the capacity is tight can prompt other facilities to choose best practices for reducing driver wait times and improving driver treatment while at the facility. This is a favored strategy for 22.6% of respondents.
A lack of available truck parking creates a dilemma for drivers who are often forced to drive beyond allowable HOS rules or park in undesignated or unsafe locations. The Federal Highway Administration is currently updating the 2015 Jason’s Law Truck Parking Survey Results and Comparative Analysis. More than 25 states have completed or are currently undergoing truck parking studies. The issues are well documented and concerns with this certain problem have kept this at number five position once again in 2019.
Here are some proposed strategies for truck parking by the respondents:
- Identifying strategic locations on the National Freight Network for new or expanded truck parking due to increased traffic congestion, staging needs, and the industry or regulatory changes. About 40.3% of survey respondents have relayed that identifying strategic locations to expand truck parking capacity is their preferred strategy for addressing the continuing shortage of truck parking; most especially re-opening shuttered parking facilities and investing in new facilities are targeted and effective strategies. These should lessen the growing shortage of truck parking along with the National Freight Network. Various state truck parking studies have identified corridors where truck drivers say the shortages are most problematic. These kinds of results provide a starting point for developing a national database where truck parking should be enlarged.
- Creating a new dedicated federal funding program designed to increase truck parking capacity at freight-critical locations. About 34.2% think that a federal infrastructure bill provides the best opportunity for resourcing truck parking capacity and they’re also expecting Congress and the White House to provide leadership on infrastructure funding. However, they still compete with essential road construction activities. A truck parking funding program would target and simplify funding for truck parking projects.
- Researching the role and value of real-time truck parking information systems and truck parking reservation systems. Supporting technological advancements to develop real-time truck parking reservation systems was the preferred solution for a small but growing number of respondents. The growth of respondents has increased from 7.2% in 2017 to 12.6% in 2019. This reflects the considerable public sector interest and investment in this kind of system. This has been the top priority for 2019. This is to ensure that data formats and standards are developed using input from truck drivers as the final consumers of data.
In 2018, there will be high levels of driver turnover. However, in 2019, there was a softer freight market and has resulted in a mixed picture of the truck driver market. This resulted in driver retention dropping three places from the 2018 survey to the number six position this 2019. This is probably due to lower turnover rates to the driver pay increases many fleets have put in place to encourage and retain qualified drivers.
Here are some proposed strategies for driver retention by the respondents:
- Researching and prioritizing retention strategies based on driver feedback and driver tenure data. About 58.7% of respondents think that research to quantify the most successful retention strategies based on driver feedback and tenure as a professional driver is the best way to reduce turnover. According to recent research from Stay Metrics, they have identified other retention mechanisms including improving trust between drivers and carriers and scheduling more free time at home.
- Quantifying the relationship between safety technology deployment like cameras, speed limiters, active braking systems, driver satisfaction, and retention. About 16.9% of respondents believe that it’s important to understand the impact of technology deployment on driver satisfaction and retention. For instance, fleets deploying video-monitoring systems like driver-facing cameras may experience initial pushback from drivers who are concerned with being monitored while they are driving. However, these same drivers may ultimately be blamed in case of an incident taken on video footage and the rate deployment of those systems may increase.
- Creating an online collection of retention strategies and best practices customizable by carrier fleet size and sector. It will be significant to establish a centralized archive for this information once research has been completed. About 13.8% of respondents think that compiling the results of the research was their preferred solution to address this certain issue.
Electronic Logging Device (ELD) Mandate
Electronic Logging Device Mandate peaked at number one in 2016. However, it has continued to drop in ranking in 2019; placing at the seventh place. The attention of the industry is now focused on the approaching deadline for fleets to change from Automatic Onboard Recording Devices to Electronic Logging Devices as required by law on December 16, 2019.
Here are some proposed strategies for the electronic logging device mandate by the respondents:
- Researching and quantifying industry impacts on safety and productivity from the full deployment of ELDs. About 54.9% of respondents believe that research is needed to fully check ELD impacts on the industry. Additional research is still needed to help the industry even though the Federal Motor Carrier Safety Administration projected that the industry would save about $2.44 billion in administrative costs and save lives yearly from the ELD deployment. They already started by launching their ELD Data Clearinghouse to collect and analyze ELD data from carriers for these analyses.
- Assessing the extent and impact of the growing requests for ELD exemptions. The FMCSA has received countless petitions from groups seeking exemptions from the ELD mandate since December 17, 2017. These requests are intended for the commodity being transported like in the agricultural sector or the nature of the work being done by the drivers. About 21.5% of respondents chose to assess until when these exemption requests can be made as to their top solution in relation to the ELD Mandate.
- Evaluating the landscape of appropriate and inappropriate uses of newly available ELD data. Issues still remain regarding how the scope of information that ELDs are capable of generating and the scale of their adoption will be used beyond the discussed purpose of Hours-Of-Service compliance. About 12.4% of respondents wish to establish limitations on the use of ELD-generated data.
Compliance, Safety, Accountability (CSA)
Compliance, Safety, Accountability first appeared in this list of top industry concerns in 2010. It now has its lowest ranking to date in 2019. In early August 2019, FMCSA decided to make its Crash Preventability Determination Program permanent in which carriers use to remove non-preventable crashes from their CSA Crash BASIC score calculation. However, the trucking industry is still waiting to fully understand how CSA will perform and rate motor carrier performance under the Item Response Theory.
Here are some proposed strategies for compliance, safety, accountability by the respondents:
- Advocating for FMCSA to expand the list of crash types currently available for review and reclassification as non-preventable as part of the federal crash accountability program. There is also an expansion of the types of crashes that are qualified from 8 to 15. This was suggested by 34.5% of respondents.
- Advocate for CSA score reductions in existing BASICs rather than a new BASIC for carriers who choose to participate in FMCSA’s Beyond Compliance program. This program is based on participating motor carriers who are voluntarily implementing programs that exceed regulatory requirements to reduce both the number and severity of crashes. Furthermore, this program was modeled after ATRI’s 2011 “Alternative Compliance” research that states that a reduction in corresponding CSA BASIC scores for participating carriers. About 25.2% of respondents said that they would like to see the credit as a reduction in the existing BASICs rather than creating a new BASIC.
- Working with FMCSA to ensure that the recommendations of the Congressionally Mandated National Academies of Sciences review of CSA are successfully done. Their study with FMCSA would like to improve the evaluation of carrier safety performance and they issued their Corrective Action Plan to address the recommendations. About 24.5% of the respondents think that it will be important for the industry to remain involved to further ensure the successful implementation of the program.
Transportation Infrastructure / Congestion / Funding
Poorly conditioned roads and traffic congestion bit by bit destroy vehicles. Also, waste fuel and increased emissions create stress drivers and have a negative impact on the productivity of the industry. The trucking industry in the country brings about 71.4% of the nation’s freight tonnage and 80.3% of freight revenues for the nation’s roadway infrastructure. ATRI’s research estimates that traffic congestion delays increased the trucking industry’s fuel consumption by 6.87 billion gallons in 2016. Also, autonomous vehicle adoption will be hindered by poorly made infrastructure.
Here are some proposed strategies for transportation infrastructure, congestion, and funding by the respondents:
- Continuing to advocate for long-term highway funding through an increase in the fuel tax or other direct user fees and preventing additional diversion of revenue to non-highway projects. The decrease of highway funding in the country is because of an erosion of federal motor fuel tax revenue. The U.S. Congress has yet to pass legislation to increase infrastructure funding while numerous roadway users and industry groups have pushed for a fuel tax increase over other infrastructure funding approaches. About 50.3% chose an increase in the fuel tax as their number 1 solution to improve the country’s surface transportation infrastructure.
- Creating a new funding program to focus federal resources on truck bottlenecks along major freight corridors. We already have limited resources. The main solution in addressing transportation infrastructure issues is to have funding in transportation bottlenecks along major freight routes. This is a solution that was chosen by 20.5% of respondents.
- Increasing funding for federal-aid highway programs that focus on funding highways with essential freight volumes. About 20.5% of respondents also think that the most sensible approach for solving congestion on the country’s transportation infrastructure is to target resources on those corridors with essential freight volumes. The Freight Performance Measures program of ATRI monitors freight movement on the country’s highways and is a useful tool for understanding where and at what level of investment should be made.
The economy of the country appeared again in the top 10 industry concerns in 2018 and ranked 10th place in 2019. The trucking industry faced a softer freight market in 2019. This is a continuing trade war with China and this is also awaiting the ratification of the United States-Mexico-Canada Agreement to replace NAFTA. Also, the drone strikes on Saudi Arabian oil facilities have raised concerns over fuel prices which negatively impacted the trucking industry wherein fuel represents 22% of operating costs.
Here are some proposed strategies for the economy by the respondents:
- Advocating for reforming or repealing ineffective and burdensome regulations that add to industry costs without providing benefits. About 43.5% of respondents think that regulatory reform is the best solution for improving the economy and driving freight demand. This solution is also connected with the Trump Administration’s goal to lessen regulations as seen in the proposed NPRM and HOS rules and to stop California’s ability to establish stronger greenhouse gas emissions standards.
- Continuing to advocate for trade and economic policies that will further improve the economy. About 34.6% of respondents would like to have policies that boost consumer confidence and spending. However, the taxes imposed by President Trump and the impact on freight demand are concerns for many people in the industry.
- Researching the impact of volatility in trucking capacity such as oversupply or undersupply on fleets. Volatility in trucking capacity means it’s unstable and this impacts fleet decisions from buying equipment and hiring for drivers to technology deployment and changing freight traffic lanes. Quantifying these impacts is the top solution chosen by 14.2% of respondents.
Of course, like any kind of business, you should have an insurance plan too for your trucking business. You will need:
- Commercial auto liability – You will need this kind of coverage for your trucking business if your company includes employees or customers driving a vehicle. This will protect you and your business if one of your drivers is found responsible for injuring another person or damaging another person’s property. If your company is sued for a possible accident, this will help you cover the costs for court and defense.
- Physical damage insurance – Many reasons can cause damage to your vehicles such as fender benders, animals and inclement weather. You’ll need this kind of coverage to protect your vehicles to cover the repair, replacement cost or the actual value cost for the damaged vehicle.
- Non-trucking liability insurance – This plan covers you when you’re driving for non-business purposes. You’ll be covered with this kind of coverage plan when you’re not hauling any load.
- General liability insurance – This kind of plan is the foundation of any business’s liability protection. This helps you protect your business from losses caused by your services, operations or employees. This will also cover your medical expenses, legal expenses and damages included in your plan.
- Cyber liability insurance – This kind of coverage plan is needed since hackers broke into a company database and was able to steal confidential and personal information from customers, clients and employees. Certain studies show that these crimes increase day by day. The confidential and personal data that you store in your company computer is another business risk that needs protection.
Ask us Any Questions
We hope you learned something from this write-up about issues concerning the trucking industry in 2019. Please do not hesitate to ask any questions if you have something in mind. You may call or send us an email. Our contacts are also on this website. Have a great day!