Bumpy road ahead for US trucking industry

Washington

IT has been 30 years since Burt Reynolds starred in Smokey and the Bandit and made driving a rig on the open highway seem like a cool way to make a living. That same year, only Star Wars sold more tickets.

These days, Star Wars still fills theatres but trucking no longer captures the imagination of movie goers or, it turns out, the young and unemployed. Veteran drivers are leaving the profession, and young people entering the workforce are put off by long hours away from home and the profession's low-brow image. The result is a US trucking industry with high turnover and a dwindling number of new recruits.

"The question is where we'll be in five or 10 years," said Steve Viscelli, a sociologist at the University of Pennsylvania and former driver. "If e-commerce goes up a lot and the introduction of autonomous vehicles is slow and the industry does not shift to millennials, we could see actual shortages 10 years out."

Most trucking companies have been able to make do so far, but as older truckers retire and an online buying boom leads to surging deliveries, the fear is that a driver shortage will spur delays and lost revenue. Offering generous signing bonuses, new technology and cosier cabs has not done enough to overcome the aversion to lengthy times spent alone on the road. The industry is running out of time, with the baby-boomer demographic nearing retirement and millennials continuing to skirt the sector.

The annualised driver turnover rate at large truckload fleets was 74 per cent in the first quarter, and the industry was short of about 48,000 drivers at the end of 2015. That shortage is expected to balloon to almost 175,000 by 2024, according to the American Trucking Associations.

"Every truckload carrier is always scrambling to fill their trucks," Stephen Burks, an economist at the University of Minnesota Morris who used to be a driver, said in an interview.

Brick Kepler, a recruiter from the Professional Drivers Academy in Milton, Pennsylvania, often gets the cold shoulder when visiting high schools in search of potential workers. He said that students have little interest in the trucking industry, with many pressured to pursue college rather than a blue collar job. Young workers also know that they might train for a career only to be replaced by driverless semis in a decade.

"I don't think people look at the trucking industry as the easy, glamorous, high-paying job they want," he said. "It doesn't appeal to the younger generation."

To boost recruitment and keep drivers invested in their jobs, Don Daseke, chief executive officer of specialised tucking operator Daseke Inc, is giving them free stock in the company that vests over five years. "It's our way of showing our drivers that we respect them, and they're really important to us," he said.

Some companies offer hefty signing bonuses. According to the American Trucking Associations' 2014 Driver Compensation Study, 48 per cent of newly signed drivers received a signing bonus averaging US$1,500. Some drivers have learned to cheat the system by signing up for a company just long enough to get the bonus, then jumping ship for another one - a practice that operators are trying to limit by withholding payouts until drivers hit certain milestones.

Timothy Judge, director of research at driver retention consultant Stay Metrics, called such payouts "an act of desperation" and a poor long-term strategy. "What are you communicating to the drivers? That it's all about the short term," he said.

Raising salaries is another option, but it would cut into profit margins. The University of Pennsylvania's Mr Viscelli said that companies would have to double driver pay - now about US$41,000 - to reduce turnover. About 30 per cent of new drivers quit in the first three months, according to Stay Metrics.

Even if they cannot get millennials, shipping companies would do well to reach a new audience. The average worker in the trucking industry is 45, and nearly 75 per cent of workers are white, according to the US Census Bureau. About 95 per cent are men, according to Ellen Voie, chief executive officer of Women in Trucking.

Truck drivers are "Donald Trump's base in demographic terms", Mr Burks said.

There has been a growing push to make the job more appealing to women, such as by designing cabs that accommodate shorter bodies and hiring for regional routes that allow drivers to go home at night, Ms Voie said. They are also adding features that women drivers request, such as porta-potties, smoke alarms and additional cabinet space. To boost retention, some companies such as Prime Inc offer new woman drivers a female mentor, she said.

Then there is the threat from autonomous trucks. In the long run, self-driving trucks that companies including Uber and Tesla are working to develop will save freight companies money. But it makes recruiting young people even tougher. WP