The Greatest Shortage in the Supply Chain Industry and How We Can Fix It
If you’ve been around supply chain news for the last few years you have heard the grim story about the shortage of an incredibly vital portion of the supply chain, the truck driver. How is your cargo going to get to where it needs to go without someone behind the wheel?
Today, we’re going to dive into what's causing the shortage, what that shortage looks like, and what can be done to fix this hole in the supply chain.
With numerous factors and an ageing workforce contributing to a drivers’ shortage, businesses are looking for possible solutions to fill the gap.
Solutions being explored include a more flexible culture or work structure, a rethinking of pay, benefits, and training, and better onboarding procedures.
Automated solutions and digital tools can help alleviate drivers’ workload as well as time-consuming tasks like route planning.
So, what does the shortage look like? Here are some numbers:
In the US, half of truck drivers are older than 45. According to Full Bay, right now there are about 1.8 million driver jobs in the United States. It's anticipated that in the next 5 years that number will increase by 10% due to demand increase. So over half of the working drivers are on the cusp of retiring in the next two decades. In other words, the gap in the workforce is reaching a precipice that should be addressed sooner rather than later.
The Washington Post reported that in 2016, the reported shortage was 36,000 jobs, and it doubled in 2018. Full Bay projects that the shortage will triple in the next 5 years.
Unfortunately, according to The American Trucking Association truck driving has one of the highest turnover rates of any career, at over 90%.
Without trucks on the road, goods won't get to their intended destination, and won't be in the hands of the customer, causing major issues in the world economy. So, what is causing this and what can we all do to fix it?
In about the last ten years the trucking industry has struggled with a shortage of truck drivers. The shortage of truck drivers affects the industry and the entire economy as well, as according to the American Trucking Association, over 70% of all American freight is moved by trucks. A rise in demand causes rises in salary, which is having a significant impact on supplier costs and therefore consumer pricing. Georgia Tech industrial engineering professor, Anton Kleywegt, cites the truck driver shortage (along with backups at the ports, and panic ordering) as one of the three major phenomena affecting increases in shipping delays and storewide shortages.
An Aging Workforce
The largest issue affecting the driver shortage is the demographic of the current workforce, specifically age, and gender. According to Zippa, over 80% of truck drivers are male, and over the age of 40. Younger generations, as well as women, have typically joined the industry in smaller numbers.
So, with many of these drivers retiring in the next few decades, the shortage could snowball if left unattended, and the supply chain industry could face devastating consequences if the shortage were to spike suddenly and significantly. A major issue comes with the United States Federal requirement for getting your Commercial Drivers License or CDL. The age requirement to hold a CDL in the United States is 21, so after high school graduation, there’s a gap between entering the workforce, causing young adults to look elsewhere for employment.
Another major demographic issue is that the industry only aggressively targets half the population. Women only account for 6% of all commercial truck drivers.
Challenges of Life On the Road
Life behind the wheel of a big rig can be a difficult one. A lot of the culture and lifestyle of a truck driver is what so often deters people from choosing the career. Some trucking companies have newer drivers driving routes that are longer in both length and time, in an attempt to give them experience. This can keep new drivers on the road for extended periods of time, returning home only a few times a month. Sleeping in a parking lot and showering at a truck stop can be difficult thing to acclimate to, and opportunities to stop for fresh and nutritious food can be few and far between.
A lot of regulations are in place to ensure that truck drivers take mandated rests and breaks in driving, but if you ask truck drivers, some trucking companies only pay you when you’re driving, as according to Systrans.com, per mile pay is the most common form of payment in the truck driving industry. In some environments, this pay structure creates constant pressure for those drivers to squeeze every mile in and get the freight to its destination as soon as possible. This has bled into pop culture where many depictions of drivers appearing as twitchy and overly caffeinated have appeared on page and screen.
For the unfortunate few outlying cases, this sort of mentality and behaviour can lead to serious sleep deprivation. According to Robson Forensics, “Sleep deprivation affects a driver’s ability to safely operate a motor vehicle by decreasing reaction time, degrading attention and vigilance, increasing distractibility and confusion, decreasing motivation, and increasing the probability of driving performance errors. The first behavioural signs of sleep deprivation often include changes in mood and motivation, failure to complete routines and slower responses.” These side effects can be dangerous if not lethal to drivers and other patrons on the road.
Possible Solutions to the Truck Driver Shortage
Most popular solutions involve fixing the already pre-existing issues rather than creating unique solutions.
A More Flexible Culture
The most major cultural downside is the time drivers have to spend away from their homes. One way that this can be solved is to implement shorter routes. An example is having drivers complete one, eight-hour round trip each day, or having a driver take cargo to a drop-off point to be picked up by another driver. Shorter routes can ensure that drivers get home every day, thus eliminating a lot of the other cultural issues outlined in the above section.
Adjust the Pay
Some drivers are paid by the mile rather than the hour so issues like detours, bad road conditions, and increased traffic in metro areas eat away at drivers’ income. We are beginning to see more companies offer a more enticing payment structure, offering several different types of bonuses and paying drivers hourly rather than based on miles or drop-offs.
Attracting New Hires
We are beginning to see companies implement a new way to attract hires. These methods include paid training or education, and paid CDL testing, under the stipulation that the applicant would work for you after their training.
Another recruiting strategy would involve appealing to groups that are often not targeted by trucking employers, specifically women who make up less than ten percent of truck drivers. An article by NPR last year states that for some women, driving a truck has given them the financial freedom that they desired. One woman in the article, Tiffany Hathorn, said that she would often hit a financial ceiling in a lot of her other career paths but being a truck driver has allowed her to make enough money to provide for her family. Long-haul trucking companies should take advantage of stories like this in order to better appeal to an untapped demographic of women.
Step-Up Onboarding Procedures
A great way to retain employees is to build relationships with your employees and extend these relationships beyond just the hiring and onboarding process. Some companies have started to implement structured meetings between drivers and managers to check-in, in and often will have the management present each morning to meet and catch up with the driver. These gestures can mean a lot to the company identity of a driver. Having a strong relationship between management and drivers is a great way to gain and maintain caring staff.
Adjusting the Regulated Driving Age
The 18-20-year-old group has the highest rate of unemployment of any age bracket. Some have suggested altering the CDL requirement to allow younger drivers would allow companies to tap into that underutilized demographic. An option proposed by Laura McMillan, Vice President of Training Development, Instructional Technologies Inc., is to have focused training for the younger demographic, while also avoiding having young truck drivers drive long distances or have complex routes for the first few years of their career.
Every industry is always looking for ways to advance and improve their daily operations, and the shipping and trucking industry is no exception. One solution the industry is considering is implementing AI and autonomy into the cabin of the truck. With the cutting-edge tech the future of trucking brings, it’s sure to attract young, tech-savvy drivers to the industry. An example of this comes from the Challenger Motor Freight company.
“The company has developed an augmented reality tool that allows prospective drivers to hear from current employees including professional drivers right from the palm of their hands. Using this technology, a message can turn into a driver virtually standing in front of the prospect, telling him or her what it is like to work at Challenger.”
Using the Right Tools
An incredible and easy way to reduce the stress of your driver fleet is to ensure that they are equipped with the right hardware and software solutions. Automating some of the more tedious processes like route management and paper timesheets allows your drivers to focus on delivering your precious cargo to its intended destination in the most optimal manner, reducing time on the road.
Revolutionizing the Truck Driver’s Role
At Routeique®, we know that drivers are more than just the person who gets the items where they need to go, and truck driving jobs come in many different varieties, but the role of both long-haul and short-haul drivers are constantly changing, so let's take a look at the role of the 21st-century driver.
Drivers are the front line in your customer relationship and are arguably the most common touchpoint between you and your customers.
Equipping your drivers with Routeique gives them the best technology that can take heaps of stress off of them. For example, our Delivery Management System helps empower drivers to take control of their own day with route optimization and re-optimization that can be done from the palm of their hand.
Additionally, automated reporting technology also puts power into the hands of the employers, allowing them to judge the merit of a driver on more than just hours driven or drops made. With insightful reporting drivers can be rated based on metrics that are often overlooked!
Routeique is constantly thinking of ways to evolve the role of the driver in the supply chain:
“Consumer expectations are evolving quickly and businesses are under more pressure than ever to deliver a high-level of customer service. In many cases, drivers are the face of these businesses, one of the main touch points with customers. There’s a huge opportunity in thinking about their role differently - if technology can take the routing off their hands, drivers can shift their focus to building relationships, delivering excellent service, merchandising your products and winning the next order.”
-Kaitlin Mercier, VP Partnerships, Routeique
Autonomous or Augmented Vehicles
Although completely autonomous trucks aren’t quite a reality yet, some incredible news has come out recently about the first “Driver Out” autonomous trucking operation. Many shipping companies are looking to driverless semis as potentially the most promising solution to the emerging truck driver shortage. There are fewer responsibilities for the human co-pilots of autonomous trucks. The drivers still need a CDL, but the technology allows them to multitask and focus on other aspects of their role. In addition to automation, there are a number of solutions which can augment existing vehicles and fleets. For example, semi-autonomous kits can augment areas like steering, breaking, and acceleration to make drivers' roles safer while also saving on fuel costs and wear and tear.
Autonomy is another place where Routeique can come into play. Routeique is already optimizing routes for trucks with human drivers. The Routeique platform has the potential to integrate with automated trucking software in order to push optimized routes to autonomous trucking fleets.
Although fully automated trucking may be a long way off, in conjunction with other measures, it has the potential to be an effective solution for the future of trucking.
The trucker shortage may seem like a scary problem facing the supply chain industry, but the intention of this article is not to perpetuate that fear, but rather to highlight that this issue is not going unnoticed, many professionals in the industry are working on solutions and the future of trucking is constantly being innovated.
Want to find out more? Check out our other posts about setting your transportation team up for success, or optimizing your operation by following these KPIs.