Truck Driver Shortages and Retention Issues

There’s a growing concern from regulators about the increasing truck driver shortages and ongoing retention problems. In this post, you’ll learn about the FLSA (Fair Labor Standards Act), the FMCSA (Federal Motor Carrier Safety Administration), shifting regulations, and some possible solutions for a better, more attractive working environment for truck drivers. 

The Causes of Driver Shortages and Retention Issues

Truck driver shortages and retention continue to be an issue in the logistics and supply chain industry, which has impacted driver pay and employment in 2021. But what are the causes of these shortages, and why are carriers having such trouble retaining drivers?

1. The demand for drivers has increased due to more online ordering and an uptick in construction logistics.
2. Qualified CDL drivers have retired or simply stopped working during the pandemic due to shifting priorities, COVID concerns, or burnout. 
3. Driver school graduation rates have dropped, resulting in fewer drivers entering the workforce, partly because of schools ceasing or reducing operations during the pandemic. 
4. The new federal clearinghouse has barred over 100,000 drivers with a history of substance abuse from driving. 
5. Professional drivers must be over 21, forcing high school graduates to seek and settle into other jobs upon graduation and further reducing the pool of potential candidates. 

Simply put, drivers are leaving the industry faster than they are entering, and there doesn’t seem to be enough incentive to stay on board with carriers long-term. 

The cause of driver shortages and retention issues seem to have been primarily spurred by the pandemic; however, this isn’t the first time shortages have been a concern. Now, the working environment for truck drivers is being put under a microscope to see what could attract drivers back—and what drew them away in the first place.

Potential Solutions for Truck Driver Shortages and Retention Issues

Pay Shifts

Pay has been a point of contention for truck drivers. Hourly pay is not as standard in the trucking industry, and instead, many drivers get paid on a per-mile basis. Although per-mile wages can be easier to track, they’re easily affected by weather, traffic, speed limits, and other factors outside a trucker’s control which can be discouraging and make a driver’s pay inconsistent and unreliable. 

What’s more, under the federal Fair Labor Standards Act, some truck drivers are exempt from overtime pay and are treated like contractors instead of employees, causing them to miss out on valuable benefits. Lifting this exemption would be a solution that could provide drivers with better pay, attract better drivers, lower onboarding costs, and improve turnover rates. 

Salaried pay with bonuses and benefits is also a solution being seen in the market in response to the shortage. This long-term solution classifies drivers as employees and can provide consistent, reliable income to those who prioritize that over the freedom and flexibility of being an independent contractor. 

By classifying drivers as employees instead of independent contractors, they’ll be eligible for overtime pay and have other employment rights. Some truck owner-operators do, however, prefer to continue operating as independent contractors, as proven by the California Trucking Association’s pushback on AB 5. In a statement, CTA’s CEO Shawn Yadon said, “In California, more than 70,000 owner-operators choose to work independently because of the freedom, flexibility and business growth potential that business model provides. These small-business entrepreneurs face irreparable damage should AB 5 be allowed to exist as it relates to the trucking industry.”

Assessing Driver Detentions

Driver detentions—the delay at origin pick-up or drop-off—are being reviewed because they reduce driver earnings and raise safety concerns. It can be difficult for drivers to collect detention pay, despite these detentions being technically “on the clock” time. 

And this detention cost is high. For example, in a 2018 report by the OIG, it is estimated that driver detention can cut earnings for truckload drivers by $1.1 billion to $1.3 billion, with annual net income for carriers reduced by $250.6 million to $302.9 million.

There’s also a discrepancy between agencies. The Wage and Hour Division at the Department of Labor requires that employers across the entire labor market pay for all work time, but FMCSA allows employers to declare drivers off duty while still clearly on the job in detention. To fix the problem, the Department of Labor and the Department of Transportation must work together to create a stable solution. 

Whether through the market or a regulatory fix, solutions are being explored to avoid unpaid driver delays.

ELD Mandates

ELD (Electronic Logging Devices) mandates have been implemented by the Federal Motor Carrier Safety Administration (FMCSA), but they have pros and cons. On the one hand, they enable driver activities to be monitored more closely and accurately for better productivity,  scheduling, and management. They also track hours driven to help prevent fatigue and its associated dangers on the road. 

On the other hand, some drivers oppose the ELD mandate, arguing that they hurt productivity by forcing a decrease in hours. Because of the electronic timing device, drivers can also feel obligated to drive on its time, thus driving in traffic, inclement weather, adverse conditions, or while tired because of the pressure of the ticking clock. 

In short, there’s no simple answer.

Drivers have varying priorities that range from freedom and flexibility to consistency and security. The industry is evolving to meet these needs in a way that makes sense and is fair to drivers, carriers, and clients. One thing is for sure, though: there’s a shortage of drivers and high demand, putting drivers in the driver’s seat to select what they deem attractive and worthwhile.

To learn more about how we work with partner carriers at Stream Modular, reach out. 

Stream Modular is a transportation logistics company specializing exclusively in modular construction. We help modular manufacturers and builders transport mods, pods and panels so they arrive on time and safely to the build site.