Written by Bill Thomas, vice president of Burnham Benefits, an employee benefits consulting and brokerage firm headquartered in Irvine, Calif. This is one in a series of periodic guest columns by industry thought leaders.
Bill Thomas
In our society of ultimate convenience, we don’t need to travel far to find a wide array of consumer products. Many of us get what we want by clicking a few buttons on our smartphones or computers. These speedy and efficient consumption practices, however, are highly dependent upon a process that requires a massive amount of resources and energy. There must be an ample supply of goods at warehouses and outlets across the country ready to ship to American consumers. That means we need trucks – lots of trucks – and those trucks need drivers. Which is why the truck driver shortage is such an important issue.
Just about every product that ends up on a shelf in a store or warehouse in America is delivered via truck. Trucks accounted for 70.1 percent of domestic freight tonnage last year, according to the American Trucking Associations. For now, there is no other realistic way of delivering these goods in the quantities needed and according to the timelines consumers expect.
The pressure on the trucking industry to help satisfy America’s growing consumption increases every year. Between now and 2027, the amount of freight moved by trucks is expected to jump by 27 percent. Meeting that demand won’t be an easy task for the nation’s trucking companies, especially since America’s supply of drivers continues to dwindle. The ATA estimates that the industry will need more than 96,000 new drivers annually for the next 10 years to keep pace with consumer spending. Very few industries – especially those at the heart of the economy – face such a daunting challenge.
The trucking company leaders who face this unparalleled staffing crisis are seeking to tackle it head on. Solving the looming truck driver shortage is the most important problem in the industry, according to a survey of leaders from 2,200 trucking companies. By more than 2 to 1, trucking company representatives said that attracting and retaining new driver talent is their most crucial strategic initiative – far outweighing concerns about other issues faced by trucking companies, such as regulatory compliance, risk management and revenue growth.
American consumers are likely to experience empty shelves at local stores and long delays in purchasing items they want and need – problems typically found in other regions of the world – if the trucking industry does not address this issue soon.
Transportation companies are attacking the driver shortage in innovative and cost-effective ways. More than a third of trucking companies are increasing investments in their employee recruiting processes in hopes of attracting new talent. They are using social media to attract potential staff members, partnering with truck driver schools to provide immediate access to new graduates, and reaching out to the U.S. military branches to recruit recently retired military personnel. At the same time, they are improving their human resources functions to speed up the hiring, training and retention of staff members. Employers are increasing salaries and benefits. They are paying new employee signing bonuses as well as paying current staff referral fees and staff retention bonuses after drivers have stayed with the company for a certain period of time.
For example, Richard Coyle, president of Devine Intermodal, a large California trucking firm based in West Sacramento, has made a conscious decision to pay well above industry standards in order to attract and retain drivers. Devine pays its drivers 61 cents per mile when the industry standard is 50 cents per mile. Devine also rewards workers when they recruit new drivers. And the firm provides its employees with richer-than-average health benefits.
Trucking firms also are learning that there are actions they can take upfront to better ensure driver retention. These include providing longer employee-orientation periods, appointing driver liaisons/mentors, performing initial and ongoing staff surveys, conducting pre-hire employee personality assessments and completing more comprehensive pre-employment screenings.
Not only are these methods improving employee retention rates, they are helping to cultivate a more professional and dedicated workforce. Many carriers are being rewarded with a cohort of employees who are more likely to comply with regulations, value safety and help ensure company security. These more thorough pre-employment screenings allow trucking companies to conduct expanded assessments of candidates’ motor vehicle records, previous employment, overall health, drug and alcohol use and criminal records. By using these screening methods, employers are hoping to see a dual benefit – hiring and retaining better employees.
Unfortunately, the “age factor” is another challenge for the trucking industry. Employees of trucking companies are older than their counterparts in other industries. The median age of an over-the-road truck driver in the U.S. is 49. The average age for all U.S. workers is 42. This demographic fact creates two negatives for trucking. Older employees retire sooner, which can stunt employee expansion efforts and increase the truck driver shortage. As a group, older employees suffer from more frequent and more complicated health concerns, which can lead to work absences, inefficient job performance and increased costs.
Addressing the health and well-being challenges uniquely faced by the trucking industry has forced firms to get creative. In addition to being older, truck drivers tend to suffer more from obesity and its complications than the average American. According to a recent Federal Motor Carrier Safety Association report, 86 percent of American truck drivers are considered to be either overweight or obese. Moreover, many drivers suffer from comorbid complications such as sleep apnea, hypertension, diabetes and decreased life expectancy. The life expectancy for a driver in the U.S. is 61 years – 17 years less than the national average.
Many forward-thinking companies have begun to see their employee benefits programs as an additional tool they can use to impact their bottom line. Firms such as Devine Intermodal have even implemented wellness programs that encourage employees to improve their health, through providing information on healthy eating and healthy lifestyle practices.
Other carriers have gone a step further by providing employees with incentives to engage in healthy activities. Hansen & Adkins Auto Transport, a Los Alamitos, Calif., auto hauler, has designed its employee benefits program to approach health in two ways. The company provides its employees and their family members – at very little cost to the employee – with superior health insurance coverage for those who become sick or injured. It also has committed significant funding to recognizing and rewarding employees who engage in activities that improve their health.
Many trucking companies have also found it helpful to use the services of benefits consultants including my firm, Burnham Benefits, and others such as Commercial Carriers Insurance Agency. These businesses specialize in improving the health and well-being of trucking industry employees. They help carriers develop a healthier and more productive staff, improve employee retention levels and decrease insurance costs.
America’s trucking industry hopes to properly address its staffing crisis. In the meantime, the truck driver shortage is a potential problem for all of us who wish to continually consume products immediately and with few limitations. Without a solution, our consumer society and general way of life could be drastically impacted.
Editor’s Note: Bill Thomas is vice president of Burnham Benefits. Prior to joining Burnham, Thomas was a partner at RSI Employers Source Insurance Services. He has a master of healthcare administration degree from Loma Linda University.
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