Driver shortage vs driver retention: What Is the bigger issue?

For years in the trucking industry there has been ongoing discussions of driver shortages and how to entice new and younger people to enter the industry. But now, driver retention is the new issue that needs to be addressed. Driver retention is one cost along the supply-chain that is largely ignored as it is hard to recognize a hard cost.

 

Here’s the debate. Is it a driver shortage or lack of driver retention that’s costing the industry?  Which of them is actually to blame for the trucking industry woes?

 

In March, 2019 Kristen Monaco, an associate commissioner at the Department of Labor’s Bureau of Labor Statistics, and Stephen V. Burks, an economic professor at the University of Minnesota Morris, published a research paper about driver retention being the true culprit in the troubled trucking industry. Their surprising conclusion?  There is no driver shortage in the trucking industry from an economic standpoint.

 

“If you talk about a labour market and characterize that there’s a shortage for several decades, that means the market is somehow broken,” Monaco said while speaking at the FTR Transportation Conference in Indianapolis, IN recently. “The quantity of labour demanded is constantly greater than quantity of labour supplied.”

 

She mentioned that there is no evidence of the driver market being broken. Instead she points to a combination of wages, hours and undesirable working conditions that are causing the constant turnover and then demand for drivers.

 

After the report was originally released Bob Costello of the American Trucking Association (ATA) disagreed with the findings saying that the researchers “demonstrate some basic misunderstandings about the trucking industry.”  And in July, Costello doubled down with a report from the ATA saying that the driver shortage persists and will continue to worsen in the coming decade.

 

It is important to look at the underlying issue with either theory. Driver wages, hours and working conditions are not desirable.  Retention issues continue to be a problem across the board with 25 per cent or more of drivers being delayed six hours or more on the regular. Until these issues are addressed, providing consistent coverage and service will continue to be an issue for carriers and shippers.

 

Publish date: 
Tuesday, October 1, 2019

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