Rocky Mountain Trucking LLC

Recently, Sen. Mark Kelly, D-Ariz., posted a campaign video on Twitter that caught the attention of longtime truck driver Gord Magill, who is based in upstate New York. Magill and other truckers weren’t happy with Kelly’s message. In the video, Kelly discussed a bill he introduced this year with Sen. Cynthia Lummis, R-Wyo. The legislation would do away with certain requirements for obtaining a commercial driver’s license. As Kelly said in his campaign video, the law would ease America’s “truck driver shortage,” helping hardworking Americans and slashing costs for all. 

According to the American Trucking Associations, a trade association comprised mostly of large trucking fleets, the U.S. is short 78,000 truck drivers. In the past year, outlets like Fortune, CBS and CNN have cited the ATA in stories about a supposed worker shortage. The causes of this shortage, according to the ATA, include a high number of retirements, low representation of women and the challenging lifestyle that comes along with being a truck driver. 

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However, most truck drivers and economists — especially those outside of the ATA — believe there is no such truck driver shortage. Instead, they argue these large trucking companies have a retention problem. In lieu of raising wages and easing truckers’ working lives, they argue, such large fleets would rather increase the pool of potential truck drivers to counterbalance those who leave the industry. 

“Instead of trying to find more people all the time, why not figure out how to keep people and pay them more?” Magill, who also writes a Substack about his job called Autonomous Truck(er)s, told FreightWaves. “But that’s never part of the conversation.”

Even the current White House has organized policies around increasing the pool of potential trucking employees. One of its most significant initiatives in the trucking space is the launch of an apprenticeship program to recruit adults under the age 21 to interstate trucking jobs, which critics say could lead to more dangerous highways. 

A recent NBC News poll ahead of today’s midterm elections found high economic unhappiness among American voters. Only 19% reported they were satisfied with the direction of the economy. 

That might drive politicians like Kelly, who is locked in a pivotal Senate race in Arizona, to promise to drive down costs through policies that may unintentionally slash wages. Or it could lead lawmakers to promise better, higher paying jobs. Right now, lawmakers appear to favor the former strategy — an unusual conflict as more and more politicians attempt to position themselves as economically populist

Neither Kelly nor the White House responded to requests for comment from FreightWaves.

Why the truck driver shortage is so controversial

For those of you who have been so lucky as to never hear about the truck driver shortage or its decades-long meta-discussion, here is a primer for you. I will not be going into every detail of this conversation because this is a weekly newsletter and not a book. (However, several great articles are linked throughout for those of you who want to delve deeper.) 

Since the late 1980s, the ATA has claimed that there is a nationwide shortage of truck drivers. This shortage reached a high of 81,258 last year before falling to under 78,000 in 2022, according to the group’s most recent report. ATA chief economist Bob Costello told FreightWaves in an email interview that this number is estimated “by determining the difference between the number of drivers currently in the market and the optimal number of drivers based on freight demand.”

For years, reporters at outlets like Fox Business, Bloomberg, NPR and The Washington Post reported this claim without much scrutiny.

Something shifted during the pandemic, however. Workers in many industries suddenly found themselves with more power than their employers; they were able to bargain for higher wages or quit altogether. Executives then began to complain about labor shortages and the so-called “Great Resignation.” More Americans adopted the view that there wasn’t exactly a shortage of workers, but a lack of interest in jobs that don’t pay well. To lure employees, companies began to boost wages. According to the Economic Policy Institute, nonfarm employees earned 5% more in September 2022 compared to the previous year.

That changed the perspective in mainstream outlets about the “truck driver shortage.” NPR’s Planet Money, Quartz and Time were three outlets that, in 2021, reported stories that questioned the so-called truck driver shortage. 

Truck driver Fletcher Mack in on Friday, May 9, 2008. (AP Photo/John Froschauer)

Of course, truck drivers, economists and certain journalists who I shan’t name here had long voiced skepticisms around the ATA’s claim of a truck driver shortage. One part of this that sparked uncertainty among the ATA’s claim is that it’s an industry and lobbying group that generally represents large, public trucking companies. OOIDA, which represents independent truck drivers and small fleet owners, rejects the idea of a truck driver shortage.

One of those skeptical economists is Stephen Burks, a professor of economics and management at the University of Minnesota Morris. In March 2019, Burks co-published a study with Kristen Monaco, who was then an associate commissioner at the Bureau of Labor Statistics, titled “Is the U.S. labor market for truck drivers broken?”

The answer, in Burks’ and Monaco’s viewpoint, was a resounding no. Rather, large trucking employers — like the companies that comprise much of the ATA — aren’t able to retain truck drivers. Between 1995 and 2017, for example, large truckload carriers averaged a turnover rate of 94%, meaning that 94 out of every 100 trucking employees hired left the company within one year. Small truckload carriers averaged around 79.2% and less-than-truckload carriers averaged 11.7%.

Because the trucking industry is so competitive, the authors argued that large trucking employers must “accept high turnover as a cost-minimizing response.” 

Meanwhile, Costello wrote in his email to FreightWaves that high turnover rates represent “the free agency of trucking and the ultimate worker empowerment.”

He also pointed out that a slew of countries report a truck driver shortage, according to the International Road Transport Union. This includes nations with generally better labor benefits than the U.S., like France and Germany.

‘Destructive competition’ makes it challenging to pay drivers a decent wage

Trucking wasn’t always this competitive. Prior to the deregulation of trucking in 1980, there were about 17,000 trucking fleets, according to the 1987 book “Braking the Special Interests: Trucking Deregulation and the Politics of Policy Reform.” Deregulation led to the bankruptcy of large, unionized trucking firms and the entrance and growth of thousands of smaller fleets, which were almost always not unionized. 

Trucker wages fell. From 1980 to the 2010s, truck drivers saw their salaries decrease by as much as 50% — even though trucking freight volumes have boomed. The BLS study argued that “price signals” (in other words, higher wages) would increase the driver supply. 

Recall that the ATA began reporting the truck driver shortage as a chief concern among its members in the late 1980s. That tracks with the same time that trucking became a more poorly paid job. 

Trucking salaries have significantly decreased since deregulation. But it’s not the case that trucking companies are sucking up all the profits. Today, there are hundreds of thousands of trucking companies competing for freight. This leads to what University of Pennsylvania economic sociologist Steve Viscelli has called “destructive competition.”

Such competition makes it challenging for a single trucking company to raise wages too much, according to Burks, who co-authored the BLS study. Here’s a simplified example: A trucking company that raises wages would then have to raise freight rates, as it’s difficult to commensurately lower the costs of, say, fuel, equipment, insurance and so on. Its customer base of retailers and manufacturers would then go to one of the many other trucking fleets in the space, which offer lower, more competitive prices. Then, that company would likely have to slash wages again if it would like to stay in business. 

“The industry isn’t trying to cheat people,” Burks told me in 2020. “That’s not the story. They’re forced into some version of (the same) strategy because if they change, they lose.”

The post-deregulation, ultra-competitive market has generally made it harder to be a truck driver or to run a trucking fleet. But it’s great news for consumers, who can order cheap goods manufactured overseas to deliver at their doorsteps within hours of ordering them. 

As Wayne State University trucking economist Michael Belzer wrote in 2000, “Low wages and long hours may actually be the mortar that holds together the foundations of distribution and trade, and those conditions characterize both labor and management in trucking.”

Higher trucking wages may … make truck drivers work less?

Of course, trucking companies are paying their employees more — and it hasn’t done away with the truck driver shortage. In 2019, the median tractor-trailer truck driver earned $45,260, according to the BLS. Now they earn $48,310. That’s a 6.7% pay increase. (The ATA’s data reports the average driver salary, stating that truckload drivers earned an average of $69,000 annually in 2021, up 18% from 2019.)

Part of the issue of calculating driver wages is that drivers work up to 70 hours a week and are away from home for weeks at a time. Drivers do not qualify for overtime pay.

This quality of life issue of course limits who exactly would volunteer for a truck driving job — especially when jobs like construction or retail can deliver similar pay with far less time away from home. But as OOIDA President Todd Spencer told FreightWaves, “If a job pays enough, people will put up with crappy conditions.”

Paying drivers more can result in them working less, according to Costello of the ATA. “With regard to pay, counterintuitively, increased pay rates can lead some drivers to work less in order to be home more often,” Costello wrote in an email to FreightWaves. “In fact, almost forty percent of truckload carriers reported to ATA that increases in pay last year resulted in drivers choosing to drive less, make the same amount of money and be home more often.”

One critic calls policies to combat truck driver shortage ‘corporate welfare’ 

Trucking fleets say they struggle to recruit and retain drivers. Whether that’s because of pay, lifestyle conditions, the pandemic or the alignment of the stars and planets is up for debate. But state and federal governments have long funneled taxpayer funds to increase the pool of potential trucking employees. At least 44 states use taxpayer money to fund CDL schools, according to the National Association of Publicly Funded Truck Driving Schools

The current administration has also pledged to increase the number of people who could become truck drivers, including launching initiatives to attract veterans, women and those ages 18 to 20 to the industry. 

Spencer of OOIDA calls this “corporate welfare.” He said the issue isn’t that there aren’t people interested in becoming truck drivers. Rather, the industry can’t seem to hold on to those who get their CDLs.

He estimated that hundreds of thousands of new CDLs are issued each year. Many new drivers end up working for so-called “mega-fleets” that tend to have high turnover rates. Some fleets don’t struggle to keep employees, however. 

“Some companies actually see drivers as a resource, as an extension of the company,” Spencer said. “They stick around because they’re treated well. Some companies treat drivers as labor. Of course, the goal of many companies is to find low-cost labor. Those are the ones that churn drivers.”

Biden is picking trucking policies that would be good for truckers and their employers but few that would benefit truckers alone

Truck drivers and their employers sharply disagree on the truck driver shortage topic. More happily, they do agree on certain ways to boost the working conditions and productivity of the 2 million Americans currently employed as truck drivers. This includes increasing parking availability and reducing detention time, which refers to how long drivers spend waiting at warehouses to load or unload. 

Truck drivers are generally expected to wait two hours unpaid waiting to be unloaded, but a 2014 study found that waiting more than eight hours was not uncommon. One 2016 study estimates that drivers spend nearly an hour each day looking for parking. 

“It’s almost like being homeless,” grain truck driver Mike Nichols, who is based in Wisconsin, said of the parking problems. “If you can’t find a place to park and you’re running out of hours, what do you do now? If you can’t find a place to park in a truck stop and you’re parked on an on- or off-ramp, that’s not a good place to be, because there are no bathroom facilities. That’s a huge quality of life issue.”

The Biden administration is interested in increasing truck parking, following up on a bill proposed in July by Rep. Mike Bost, R-Ill. However, it has not yet pushed for a bill proposed this spring by Rep. Andy Levin, D-Mich., which would guarantee overtime pay for truck drivers — a benefit that most American workers have from the Fair Labor Standards Act of 1938.

Increasing parking would be a boon for both truck drivers, who can find a place to rest more easily, and their employers, who would get better utilization from their equipment and labor. However, it’s intriguing that Biden — who had campaigned on being pro-labor and pro-union — is ignoring certain improvements to the trucking industry that would certainly only benefit truck drivers, such as overtime pay. 

Skanda Amarnath is the executive director of Employ America, a group that promotes macroeconomic policies around full employment. Amarnath said the Biden administration has generally kept to its pro-worker pledge — most crucially around securing tight labor markets that drive wages and conditions up for workers. One proposed rule revealed last month would protect workers from employee misclassification, which could also benefit truck drivers

Still, this gap between industry and labor isn’t surprising to truck drivers like Magill and Nichols. Nichols said, “They’re saying one thing, but they’re doing what the people who make the campaign contributions want.”

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