Truck driver shortage a key part of supply chain problem
It is never more evident than during the Christmas season that Americans want what they want when they want it, often without any notion of how it gets there.
Now, however, U.S. consumers are more conscious than ever of the complex system of organizations, activities, people and information called the “supply chain” that takes goods from raw materials to finished products delivered to the user.
It is estimated that Americans will spend more than $1.3 billion during the Christmas season, but they may not get what they want when they want it. Shannon Newton, president of the Arkansas Trucking Association, said, “This time, we should expect some empty shelves” as the result of kinks in the supply chain.
What Newton has called “the starts and stalls that began almost two years ago when Chinese factories closed briefly” as the COVID-19 pandemic spread across the globe will linger into this holiday shopping season. Measures designed to control the virus also had the effect of throttling the economy. Though demand is extremely strong, the intricate supply chain has not fully recovered.
One key element of the supply chain disruption is a shortage of truck drivers nationally and in Arkansas. The driver shortage, however, is not a new phenomenon.
“I have been in this industry for 18 years. With the exception of 2008 [during the Great Recession], it has always been about how to attract and retain a quality workforce,” Newton told Talk Business & Politics. But she added, conditions over the last 18 months have made it more acute.
“Any disruption to the supply chain that has been so efficient in this country is noticeable,” she said.
The development of Just in Time delivery, limited back stock rooms and the like have built the efficiency of the system, she said, so that any sort of pause has a ripple effect across the country.
She noted that policies in other places, the shutdown, driver retirements, the economic recovery and complex consumer behavior have refined the system, but ultimately, “everything’s still coming by truck.”
The New York Times recently called the driver shortage “the biggest kink in the supply chain.” The American Trucking Associations (ATA) said the driver shortage has increased to 80,000 nationally, a record high for the industry, as pandemic-related challenges continue and more shoppers order products online. ATA Chief Economist Bob Costello estimated that if companies don’t find ways to recruit younger people, women and minorities to the largely male dominated workforce, the shortage could surpass 160,000 by 2030.
The numbers in Arkansas, a state relatively small in population but home to a number of large trucking companies, help illustrate just how big a part of the supply chain trucking represents. In Arkansas, Newton said, the industry employs 97,500 people including 36,680 drivers. There are 5,200 trucking companies in Arkansas, ranging from single-truck owner-operators to large firms that employ large numbers of people.
Al M. Heringer IV of Jonesboro is a past chairman of the board of the Arkansas Trucking Association and past president of the Arkansas Oil Marketers Association. He is vice president of Star Transportation of Jonesboro, a petroleum common carrier that operates 105 trucks and more than 130 trailers with terminals in seven states delivering petroleum products to more than 15 states. He has also observed the “starts and stalls” that Newton described.
“COVID took the wind out of our sails,” Heringer said, with the shutdowns of entire segments of the economy occurring. Then the post-pandemic recovery occurred more rapidly than expected, causing demand for which the supply chain was not able to absorb in the efficient manner the nation has come to expect.
During the period when demand for goods and trucks to haul them was reduced, many truck drivers took retirement or switched to other professions, Heringer said. Many of those were experienced drivers. When demand not only returned but increased, there were not enough drivers to fill the available seats.
“I’ve been in the business 20 years, and it’s as crazy as it’s ever been,” he said.
Manufacturers and retailers say they can’t get components to make products or get the finished products they have ordered from overseas vendors. The products may be stuck on container ships waiting to unload at the nation’s two largest West Coast ports, Los Angeles and Long Beach, Calif., where more than 80 ships bearing thousands of containers were backlogged as of late November. President Joe Biden announced in October that major ports and private companies would move toward 24-hour operations to ease the gridlock. The directors of the ports of Los Angeles and Long Beach said that initially few additional truckers were showing up to take advantage of the extended hours.
Gene Seroka, executive director of the Port of Los Angeles, told the New York Times in July that about 30% of the port’s appointments for truckers went unused every day, largely because of shortages of drivers, the chassis they use to pull the loads and warehouse workers to unload items from trucks.
“Here in the port complex, with all this cargo, we need more drivers,” he said.
For Heringer, the situation is different.
He doesn’t have a problem getting product; he has a problem getting drivers to deliver petroleum. Drivers for Star can earn up to $100,000 annually and are home every night, he said, but offering increased salaries hasn’t solved the driver shortage for him.
“I wish I had an answer. Apparently, it’s not salary,” he said.
With thousands of drivers aging out of the job, there is a need for younger people to enter the workforce. A number of Arkansas’ two-year colleges are doing what they can to ease the situation by offering truck driving instruction programs that turn out graduates more rapidly than other courses of study and leave the graduates with little to no student debt.
For example, Arkansas State University-Newport’s commercial driver program offers prospective new drivers a four-week course with training that includes simulator time, classroom instruction and hands-on road training in university-owned tractor trailer rigs, said Darla Nation, director of the program. Nation, who with her husband drove an over-the-road truck for five years before she became an instructor and the program director, received her training at ASU-N, as did her husband.
Students come from across Arkansas and many other U.S. states, Nation said. Program graduates are referred to companies with whom the school contracts for drivers.
“I have various recruiters who take our students,” she said.
One trucking firm, Maverick Transportation of Little Rock, pays the university directly for training its new drivers, while others offer new hires reimbursement of their training expenses or a sign-on bonus which may be used to cover the $2,362 tuition.
Driving students come from a variety of backgrounds, Nation said. Some may have some familiarity with the equipment, while others may have never even pulled a trailer behind an automobile. The program has a fleet of tractor-trailer rigs and all but one has the 10-speed manual transmission which is standard equipment for many fleets. Students must take and pass the Commercial Drivers License in order to graduate.
At present, 22 students are enrolled, including several from the university’s high-voltage electrical lineman program. A new class begins every week. In addition to truck lines who hire ASU-N program graduates for long-distance driving there are many local companies who need drivers with CDLs and training, Nation said.
Perhaps the most common misconception among new driving students is the notion “that I’m going to make a lot of money real fast.” Experienced and skilled drivers can and do earn an excellent living, she said, but they may not do so at first.
“You have to run a lot of miles to make a lot of money,” she said.
Being a long-distance driver requires being away from home a great deal, she noted, and it is not for everyone.
In a recent Time magazine article, reporter Elena Semuels contends there is no driver shortage but rather a driver retention problem created by poor conditions emerging in the industry in the wake of the 1988 deregulation. There are so many drivers that brokers can pit drivers against each other for loads, Samuels wrote.
Newton said the industry “has a lot of challenges (but) has made a lot of advances by trying to provide more hauls and make the hauls more regional.
“Drivers need more reliability. We need to give them assurances of home time,” she said.
A provision in the federal infrastructure bill recently passed by Congress would establish a pilot program that would allow 18-20 year old drivers to drive across state lines. Those now under 21 may drive only within their state of residence. Additional safety measures would be required, but Newton said it is important to get high school students and parents interested in driving as a career at an early age. Critics say that will take months to get underway and there are people who simply don’t want to drive a truck for a living.
“We have a lot of challenges in getting the supply chain running again like a well-oiled machine,” Newton said.
But as the system evolves and consumers continue to demand more and faster deliveries of goods, the supply chain will always need drivers.
There is not a “magic bullet” for fixing the supply chain, she said. It has operated at a very fragile capacity, but trucking will remain “a large link” in the chain.