Who's in the driver's seat?

The trucking industry grapples with the ongoing labor shortage

Supply chain woes have dominated the headlines for many months, and with good reason: The challenges are seemingly endless. Consumer demand has remained strong just as logistical issues have ramped up.

Transportation bottlenecks appear at every point of the journey that goods take from the place they’re made to our front doors. Raw material shortages have impacted factories as they continue to struggle with COVID-19-related closures. A tight labor market has made it even harder for businesses already operating on skeleton crews to stay staffed. Shipping ports are clogged with backlogged goods waiting to be processed.

Once goods finally head off the ships and begin to make their way inland, another pressing challenge takes priority: the driver shortage. The American Trucking Association¹ estimates that in 2021, the truck driver shortage hit a record high of more than 80,000 drivers. That means there are that many fewer truck drivers than what would be ideal based on the current freight demand.

Behind the driver shortage

Global supply chain issues are fraught with complexity, but so is the driver shortage impacting the trucking industry and the millions of Americans who rely on it to keep life running smoothly.

According to a study² by Coyote, which is a UPS company, and market research firm Emsi, only 20% of truck drivers are under 45 years old. As aging or burnt-out drivers retire, there simply aren’t enough younger drivers taking their places. While younger workers are joining the logistics industry, most are choosing warehouse jobs that won’t take them away from home for weeks or months at a time.

When younger drivers are interested in making trucking their career, they face a number of obstacles, too. These include a federally mandated minimum age for driving commercially across state lines, experience requirements from trucking companies, and the high price and time investment of obtaining a commercial driver’s license and completing necessary training.

“The driver shortage is not pandemic driven,” explains Phillip Wigginton, Director of Risk Management Services at Nationwide. “It’s just intensified by it.”

Culture is key to retention

Keeping the drivers you already have is one way to address the shortfall. One tried-and-true method? Ensuring you have a strong company culture. In an ideal scenario, drivers feel like they are respected and listened to by leadership. They also are compensated well and provided a comprehensive benefits package.

“If you treat your drivers well, they’re more likely to stay, but you’ve got to pay them well, too,” says Wigginton.

Since surveys show how important work-life balance is to drivers, a good culture also has policies in place to help support drivers in this area, such as not forcing runs. Offering newer equipment is also a draw.

When they’re on the road, drivers have nothing but time, and they talk to each other. While having a positive culture is key to retaining drivers, it can also be a valuable tool in attracting new ones to your company.

“If one company treats its drivers poorly, they will all know about it,” Wigginton insists. “You need to show drivers how much they are valued.”

Flexibility boosts recruiting efforts

In a tight labor market, it can be difficult to attract new drivers when you’re competing against jobs with better work-life balance, fewer regulatory hurdles and more entry-level opportunities. In order to attract qualified drivers with competing job options, trucking companies have to get creative.

“Transportation companies have to be willing to have conversations about this,” notes Wigginton. “For example, if a driver has less than two years of experience, can you look at that person individually and see where you can possibly hire someone with one year of experience and train them up?”

It helps to look at drivers holistically and not just as numbers or checked boxes on a job application. For example, a driver may be young and lacking commercial trucking experience but grew up driving a tractor on a farm. Although this is not direct experience, it can translate into transferrable skills that make the driver a candidate worth considering. Investing in training programs can provide the skills and safety knowledge needed to turn this individual into a long-term employee for a trucking company.

Another way to successfully recruit truck drivers is to be more generous with compensation and benefits.

“We’re seeing companies pay above and beyond historic numbers,” Wigginton says. “Companies that can’t compete with that are left in the lurch.”

Putting our expertise to work

When Nationwide’s Commercial Auto insureds express concerns about driver shortages, we work with them to address the issues head on. Our experts help these transportation companies conduct thorough self-assessments, which includes taking a closer look at their retention rates, pay, benefits, culture and how successful they are at recruiting new drivers. Then, we make recommendations on how to address any areas of opportunity to help the organization be more successful.

“If there’s a pay gap, we tell them to focus on pay,” explains Wigginton. “If there’s a culture gap, we work on that.”

By focusing on the delicate balance of retention and recruiting and all the elements that can influence them, transportation companies are able to keep their drivers’ seats filled and the business of life in America running smoothly.

“The biggest thing we can do is support our insureds through these challenges,” Wigginton concludes.