KEEPING BUSINESSES MOVING AMIDST THE DRIVER SHORTAGE

Transcription

1 Special Report KEEPING BUSINESSES MOVING AMIDST THE DRIVER SHORTAGE A special compilation of published posts summarizing key issues around the truck driver shortage, and changes the transportation industry is making to address the ongoing problem. FLEET MANAGEMENT DEDICATED TRANSPORTATION SUPPLY CHAIN SOLUTIONS

2 KEEPING BUSINESSES MOVING AMIDST THE DRIVER SHORTAGE Every day, millions of truck drivers take to the road to make sure that they are delivering the goods consumers need. Professional truck drivers in the United States are delivering essential goods to communities all over the country. Drivers deliver supplies to hospitals and medical clinics, they deliver food to our grocery store shelves, building supplies to construction sites, raw materials to manufacturers and fuel to our gas stations to keep the nation moving. There were over 3.1 million professional drivers in the U.S. in But that is not enough. The question is no longer if or even when will the driver shortage affect companies, but what are companies doing about it. During the past year, the driver shortage has led to dramatic capacity constraints, a nearly 100% active truck utilization and an escalating driver turnover rate. With more than 80 percent of the United States 2 receiving its goods solely from the trucking industry, the driver shortage has forced all companies who transport goods to re-evaluate their plans to recruit, train and retain drivers. A RYDER BLOG Tightening capacity is an issue across the nation. Historically, when the industry has experienced capacity constraints we were able to purchase or obtain the extra capacity. Right now though, there is no extra capacity to purchase and that means shippers have to pay more than their competitors or find the perfect match between a carrier that has needs in the exact lane the freight is moving. - Paul Boothe, Ryder Director of Transportation Management, Inbound Logistics magazine, September 2014 The reality: The driver shortage is already here The American Trucking Associations (ATA) estimates the trucking industry is short 30,000 professional drivers, and the number is expected to escalate to 330,000 by Furthermore, 90 percent of transportation carriers report they cannot find enough drivers to meet their requirements. Experts predict the demand for commercial truck drivers to grow by 21 percent through According to a survey by National Retail Systems (NRS), the driver shortage is the biggest concern in the trucking industry. Companies are beginning to focus on key areas to help mitigate the driver shortage and make sure their businesses aren t put in park at the loading docks. Research shows an aging workforce and not enough new drivers entering the profession are fueling the driver shortage. Nearly 51 percent of drivers are over the age of 45 and 17 percent are over the age of 55. Also, fewer than 11,500 people are trained to be drivers every year 3. The bottom line is the trucking industry is losing drivers to retirement with not nearly enough young drivers entering the workforce to replace them. 1 Bureau of Labor Statistics, 2 U.S. Department of Transportation 1 Driver Shortage Special Report

3 Did you know? Employment in the trucking industry is equal to 6.9 million. That s one of every 16 people working in the United States. Professional truck drivers drove over billion miles in 2011, more than double 25 years ago. Most individual long-haul drivers average from 100,000 to 110,000 miles driving per year. There are 2.3 million class 8 trucks on the road in the U.S. and 11.7 million commercial trailers were registered in Nearly every good consumed in the U.S. is put on a truck at some point. Over 26 million trucks haul freight in the United States. Trucks have overall crash rates less than half that of other vehicles. More than 80% of U.S. communities depend solely on trucking for delivery of their goods and commodities. The average daily run for an over-the-road driver is nearly 500 miles. Source: American Trucking Associations Rapid Transformation: The modern role of a driver The life of a modern driver is much more than just sitting behind the wheel driving thousands of miles each year. A typical day for a professional driver can include an average of 10 stops, lifting hundreds of packages, rotating inventory, stocking shelves, handling freight, completing delivery paperwork, providing excellent customer service and, of course, driving a truck. Having a driver who can complete all these tasks on a daily basis is key to maintaining customer satisfaction and loyalty for companies across many sectors. Unfortunately, the driver turnover rate continues to increase, and driver retention has become one of the biggest challenges in the industry. It is estimated that two-thirds of the drivers who are leaving their positions are doing so voluntarily 4. An NRS survey shows one of the top reasons truck drivers switch jobs is to increase their time at home. Some companies promise predictable home time to their drivers as an employee benefit. Other enhanced driver benefit options which companies are exploring include changes to vacation policies and providing a career development path, including the ability to transition into other positions at the company. Drivers receive defined expectations and objectives, and are recognized for attaining said goals. Several companies also announced they are increasing pay for drivers in Safety is another priority for both drivers and companies. Trucking regulations continue to grow more stringent from Hours of Service (HOS) to safety guidelines meant to keep both drivers and communities safe. Additional efforts have been made to keep drivers even safer with enhanced cab designs for women drivers to more frequent inspections on all equipment. Finally, respect is a facet drivers are looking for from their employers. Modern drivers expect increased engagement levels with their employers, and want to feel like they are a part of the company they are working for and that they have a say in their work environment. Staying ahead of the driver shortage Realizing the long-term complexities and implications of the driver shortage, companies are getting more creative and thinking more strategically about how they manage deliveries, their fleets and their drivers. Learning from and applying best practices across industries can also help companies adapt. For example, the driver shortage is not as magnified in the automotive industry as it is in other sectors since much of that industry uses a dedicated transportation model for Just-In-Time deliveries to assembly line side. This shuttle model provides drivers with regular, predictable routes and as a result, regular daily hours of service. In the retail industry, the shortage is forcing supply chains to adapt the manner in which they operate to have available drivers and capacity for peak delivery times. One way retailers are re-assessing their network is by introducing more crossdocking, whereby products reach the customer faster because freight is moved from one vehicle to another with minimal or no warehousing. The advantages of cross docking aren t limited to just reducing material handling, they also extend to reducing standing inventory, operating costs, storage space requirements, distribution costs and transit times to move products from production to customers. Cross-docking also allows drivers to make deliveries more efficiently by minimizing driver wait times and streamlining the loading process. 3 Bureau of Labor Statistics, 4 American Trucking Associations Driver Shortage Special Report 2

4 How the shortage affects consumers As the trucking industry is working to keep its wheels turning, businesses are trying to make sure food products don t spoil, store shelves are stocked and necessary parts are making it to the assembly line. Without a reliable pool of drivers, companies risk not having their fastest selling items in stock. This can lead to unsatisfied customers, fewer sales and a drop in repeat shoppers. In 2013, the Bureau of Transportation Statistics reported trucks moved more than 92 percent of prepared foods, including dairy products and prepared fruit, vegetable and nut products. In an industry where on-time deliveries are crucial, the on-going truck driver shortage is causing even more challenges for food manufacturers, distributors, grocers and other companies playing a role in the food supply chain. This puts more pressure on companies to have reliable drivers, as a delay in food deliveries increases the risk of spoilage, and could ultimately result in financial losses. The healthcare industry relies on drivers for critical deliveries of medical devices such as pacemakers or dialysis machines, medical equipment, medications and other items critical to the health and treatment of patients across the country. 3 Driver Shortage Special Report

5 Recruiting, training and retaining drivers It is imperative that companies develop strong programs focused on recruiting, training and retaining drivers to ensure reliable on-time delivery of products and to provide customers with the great service they expect. An employer s focus needs to be on recruiting from a robust talent pool, an increased investment in driver training, and a commitment to retaining drivers. Implementing a robust recruitment program can have a twofold benefit allowing companies to fill current open positions while also building a talent pool for the future. When recruiting, employers need to know where to find high quality candidates, often in places and roles that were not traditionally viewed as a source of driver talent. When recruiting, partnerships with organizations can lead to a specialized talent pool. One of these groups is Hiring our Heroes, an organization that assists veterans and transitioning service members to find employment. Veterans possess many of the invaluable skills and qualities that are essential to be drivers. Through specialized training, recruits can become key employees in the trucking industry. A second organization, Women in Trucking, is promoting the truck driving profession to women. Through a partnership with this organization, trucking companies are focusing on positively changing the ergonomics of their trucks to recruit women into the driver s seat. Adding women to the driver pool is not just something to be done simply to fill a need; it is something that should be done because there is an opportunity to utilize under-represented potential. As drivers, women take fewer risks, according to Ron Kipling, author of Safety for the Long Haul. Trucking company executives often tell me that women are better at completing their paperwork and often treat their equipment better than their male counterparts. Regarding communication, women are often viewed as being better with customers as well. A crucial factor to lower the impact of the driver shortage is to invest in a comprehensive training program. One of the most effective ways to improve fleet safety, minimize crashes and improve customer satisfaction is to consistently and continuously train drivers on key job functions. With constant changes to federal guidelines and rising customer expectations, well-trained drivers are able to handle the daily challenges of delivering goods safely and on time. In the big picture, ongoing training is a small investment that delivers big benefits for companies it increases productivity and is a vital component to the retention of drivers, demonstrating the company s commitment to their professional development. Involving drivers in solving the challenges they face in their daily roles is another opportunity for engaging and retaining drivers. Having drivers participate in safety committees and assisting with route engineering are but a few examples. Another place to look is the warehouse. It s possible a strong employee who knows the company, customers and products may want to become a driver. Employers also need to be specific about the requirements involved with being a driver. Clearly communicating job descriptions and expectations to candidates will also increase your recruitment effectiveness. The risk and cost is high when a company hires the wrong driver, as there can be safety issues, unsatisfied customers and lower productivity. Driver Shortage Special Report 4

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7 Companies are becoming more aggressive in their efforts to recruit female drivers because of the benefits women bring, not just as drivers filling a need, but as well qualified employees who bring a different perspective to the job. As trucks become more driver-friendly and the freight handling is minimized, the opportunity to become a professional driver extends beyond those who are big, muscular, and mechanically minded. The length of haul is getting shorter and time at home is viewed as crucial in attracting and retaining drivers. Adding women to the driver pool is not just something we should do to fill a need; it s something we should be doing because we have an opportunity to utilize underrepresented potential. -Ellen Voie, founder, Women in Trucking organization Conclusion: Get in the driver s seat of your business With more than 6,000 drivers across North America, Ryder is leading the charge on developing best-in-class driver programs, as part of its overall dedicated transportation solution. William P. Townsend, Group Director of Labor Strategy, highlighted Ryder s unique view of managing drivers in an August 2014 Wall Street Journal article stating, Drivers are a precious resource companies are trying to attract and retain. Once recruited, the next step is to keep them happy and loyal. The driver shortage is not a trend; it is the new normal for the trucking industry. For companies to keep their businesses moving, products on shelves and customers coming through the doors, they need to implement a plan to stay ahead of the driver shortage, developing new programs and enhancing work conditions for their driver employees. A strategy focused on recruiting and retaining drivers through training, development and a commitment to them will keep your business on the road during the driver shortage. To read more about the driver shortage and other issues affecting the trucking industry today, visit the Ryder Exchange Blog at exchange.ryder.com. Driver Shortage Special Report 6

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