When you think of folks whose words have endured throughout history, what names come to mind? William Shakespeare, Will Rogers, or Thomas Jefferson, perhaps? Or maybe Martin Luther King, Mark Twain, Vince Lombardi, or "Poor Richard" himself, Benjamin Franklin?
There's one name that appears on our own short list that we suspect might not appear on many such rosters. That would be Lana Batts. Now a partner in the transport advisory firm Transport Capital Partners, Batts is a long-time observer of the transportation and logistics industry. Among other posts, she served as vice president of government affairs for the American Trucking Associations (ATA) in the 1980s and early 1990s and as president of the ATA's Interstate Truckload Carriers Conference from 1994 to 2000.
It was during Batts' term as president of the Interstate Truckload Carriers Conference that we conducted an interview with her at ATA headquarters in Alexandria, Va. That day, we asked her to name the top 10 issues facing the truckload sector. Her answer: "Well, nine of them would be the driver shortage and if pressed for a 10th, I would have to say the driver shortage." Those words were burned into the cerebral hard drive, where they remain to this day.
We were reminded of that recently when reading DC Velocity Senior Editor Mark Solomon's feature story on the challenges of retaining truck drivers. In this latest installment of the ongoing driver shortage saga (which seems to have gone on almost as long as the entire "Star Wars" epic), Mark describes the sometimes extraordinary measures truckers are taking to retain drivers—assuming they're lucky enough to find them in the first place.
And finding them isn't easy. Despite a protracted economic downturn and lingering unemployment (just shy of 9.2 percent as this writing), literally thousands of big rigs are sitting idle for lack of a driver. As Mark reports, the consultancy FTR Associates estimates the U.S. trucking industry is short about 188,000 drivers right now.
If finding drivers is tough, retaining them is a challenge of almost epic proportions. Based on first-quarter numbers, the American Trucking Associations projects that driver turnover at large truckload fleets will reach 75 percent in 2011. In real terms, that means three out of four drivers in a given motor carrier's employ will leave the company within a year.
Things are only marginally better for the smaller truckload fleets. Historically, these operations experience lower rates of driver turnover, or "churn," than their large national counterparts because the hauls tend to be shorter. But even these fleets are struggling with the revolving door right now. At these operations, one out of every two drivers is leaving within a year.
Where are they going? They're following the money. Experienced drivers with the proper credentials have become a hot commodity in the logistics world. It should probably come as no surprise that many are making themselves available to the highest bidder.
So what does this mean for the logistics executives responsible for keeping their company's goods moving smoothly through the supply chain? It's not hard to connect the dots. Carriers are finding they must pay more to recruit and retain drivers. And if carriers have to pay more, you can be assured there will be repercussions for you, the shipper. As you've no doubt learned by now, as carrier costs go, so go your freight bills.
So if Lana Batts' words continue to resonate with us today, it's not just because she summed up the problem so memorably. It's also because the threat has only intensified over time. The driver shortage might not just be the top issue facing motor carriers; it may, ultimately, become one of the top issues facing you, their customer, as well.
Gartner, Inc.