Shipments prices and drivers pay are increasing in response
by Sibila Patsy
"The truck is everything to me," said Lincoln Hawk aka Silvester Stallone in the iconic movie "Over the top" where he drives an eighteen wheeler, arm wrestles and tries to win back his estranged son Michael. Back then this job was considered cool and profitable. Nowadays, young people look at it as not prestigious and would pass on it. That's why we keep hearing of the continuing truck drivers shortage in America.
According to the latest report by the American Trucking Association (ATA), released in 2017, the average age of the commercial vehicle operator is 49 compared to 42 in other sectors. The US Bureau of Labor Statistics puts that age even higher - 54. Furthermore, turnover is very high, and there are not enough young drivers filling in for the retiring workforce.
Age restrictions play a role in the shortage as well. Truckers are allowed on the job after turning 21 years, and most insurance companies require carriers to hire drivers that are 23. Some fleet owners would prefer to have college grads behind the wheel but can't because of these rules.
On top of the high age of the truckers, freight companies are forced to let go their foreign drivers where cabotage rules are enforced locally. Thus that drivers from Mexico, for example, can't be hired at those places and sometimes they are the only ones readily available to the move.
The industry needs to hire 90,000 haulers each year to meet the demand, outlines the ATA report. Last year alone, analysts expected a shortage of 50,000 truckers and the prognosis is that this number is going to jump to over 174,000 in 2026 if there are no measures in place to overcome the situation.
The high demand for all types of transport - van, reefer, flatbed does not help with the shortage either. At the end of January, the industry saw its first decline in the load-to-truck since November. As calculated by DAT Solutions that ratio for the dry vans was 9.8 in the week of January 23 which is still pretty high.
Pay is another hot button that alienates the younger demographics from over the road trucking jobs at all. The average salary in the sector is 43,000 calculated by the job site Glassdoor. That is not impressive to the newbies in the business. Drivers say that experience still matters and that having 10 to 20 years behind the wheel can bump that annual income to 46,000. This is often not very appealing either because of the working conditions which include sedentary lifestyle, lack of sleep, continuous noise exposure which often lead to health issues like high blood pressure, back pain, sleep apnea, obesity.
One thing the freight companies can do and they have started doing to be more appealing is increasing tucker's pay and including sign-on bonuses anywhere from 500 to 5,000. DAT Solutions is showing that the priciest loads in the end of January were to be found in the Midwest states like Illinois, Kentucky, Ohio. The truckers were able to walk out with loads worth $2.92 per mile. The next best region to make more money hauling freight was the West Coast. In places like Los Angeles, San Diego and Seattle the mileage rate was $2.42. Shipments with the lowest booking of $1.98 per mile were dispatched in Dallas and Phoenix.
Houston was still the best location for the flatbed trucks at the end of last month no matter that rates wend a bit down. Dallas, on the other hand, has gone up and the area's freight prices increased by good 5%. Georgia, especially Savannah, has also seen higher shipping payments for a flatbed.
Reefers, at the end of January, were paid an average of $2.67, an increase of $0.18 over December. The highest marijuana rated were around Green Bay and Grand Rapids. Produce trucks were paid $4.18 in this region. The worst location for the reefers was Florida where shipping was calculated at $1.63.
If you are looking for a good route, in general, try the West Coast, specifically the runs Las Vegas to Phoenix, where prices were reaching $2.75 per mile in late January, or even better try anything with delivery in L.A. The average rate for such loads was $3.31.
Experts in the industry expect companies with long-term clients to be able to negotiate prices from 5% to 8% higher down the road this year. Capacity should decrease around April when food is transported more often, and the EDL enforcement will be in full motion.
Transportation companies like Merx Global in Illinois hire drivers over 24 years old with at least 12 months of experience. They pay as much as 0.50 c/mile as well as detention and layovers. Trucking companies often promise a lot to drivers but than change their policies. Merx Global is a company that maintains very low driver turnout because they keep their promises to drivers.