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June 2012
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Empty Seats Behind the Wheel

Fallout from the recession and stiffer regulations have resulted in a shortage of qualified truck drivers, a problem without a quick solution.

Moving metal is growing increasingly difficult for North America’s service centers as the trucking industry’s driver shortage continues to worsen. Finding trucking capacity to transport steel, aluminum and other products will get even more challenging before it gets easier, say the experts.

The U.S. trucking community was devastated by the recession as carrier after carrier closed their doors or sidelined a portion of their fleets as business dried up along with the economy. Companies that survived have been in no rush to reinvest in capacity, made cautious by the economy’s slow recovery. The end result is an environment where trucks, and the men and women who drive them, are in short supply.

“There’s a huge shortage of trucks right now,” says Debby Cottingham of Debby’s Agency, an affiliate of Mode Transportation, Olive Branch, Miss., “and the rates are going out of this world.”

The shortage is particularly pronounced in flatbed trucking, which handles most metal shipments. “The van situation is different, but right now the truck-to-load ratio in Alabama is 300 loads for every flatbed truck,” she says. Routes out of Alabama, plus some in the Midwest, are particularly difficult to cover, she adds.

Bill Ritter, president of Chesterton, Ind.-based ADS Logistics, says the downturn was particularly hard on the independent contractor. Drivers that emerged upright have a lot of leverage today, however. “It’s a good time to be a trucker. Pricing is definitely going up, and capacity is what’s driving it,” he adds.

Moreover, the balance of power isn’t likely to shift anytime soon, for several reasons, say the experts. For one, the economic recovery has not yet fully taken off. When the construction market finally kicks in, demand for flatbed haulers will increase substantially. Furthermore, the age of the typical driver is rising, and carriers are having difficulty finding the next generation of drivers to replace them. So experienced drivers with good safety records will remain in high demand. Finally, and perhaps most significant, new federal Compliance Safety Accountability standards have forced some existing drivers out of the market, while preventing others from coming in, adding to the manpower shortage.

“That one is really serious,” Ritter says of the CSA safety scores. “If drivers have a bad safety score, they can’t get hired.”

Calls for improved highway safety have led to increased scrutiny of potential new hires. “Looking at the people who are coming up, the 25- to 30-year-olds, it’s hard to find someone who hasn’t gotten in a little bit of trouble. The background checks are extensive,” Cottingham says.

How can the trucking industry be having so much trouble filling positions at a time when there are so many Americans out of work? It’s much more time-consuming to qualify a person to get behind the wheel than it is to disqualify an unsafe driver, notes Eric Starks, an analyst with FTR Associates, Nashville, Ind. “Even if you had a million people waving their hands saying they wanted to be drivers, the industry can only process 150,000 people per quarter. There’s a chokepoint right there,” he says. “That’s why you always have a driver shortage situation coming out of a recession. And it’s exacerbated by the CSA, which took drivers out of the pool who were qualified [under the old rules], but nobody will hire them now.”

DeWitt Weldon sees this problem regularly. Weldon is the general manager of Butler, Pa.-based M/K Express, a subsidiary of Marmon/Keystone. “I’m not trying to disparage drivers, but the majority of applications we’re getting now are from people who have not worked out at other organizations. It’s largely related to their safety scores and violations they have had on the road,” he says. “If you hire one of these guys and, God forbid, something happens, the lawyers could have a field day.”

Trucking industry officials realize they will have to become creative to lure younger drivers into the profession. One program that’s enjoying some success is designed to attract veterans with experience driving military trucks into the commercial trucking world. “There is an emphasis within the DOD and DOT, and to a lesser degree the states, to make that happen,” says Dave Osiecki, a senior vice president of policy and regulatory affairs for the American Trucking Associations, Arlington, Va. “That’s not going to solve all our problems, but it will help around the edges.”

The driver shortage is just one of the issues the trucking community and its trade association are addressing. The industry also is involved in the congressional and statehouse debates over infrastructure spending, both how to fund it and how much to allocate. “It’s a competitiveness issue, it’s a mobility issue and it’s a safety issue,” Osiecki says. “Highway funding and the related congestion is a pretty big issue for trucking.”

Moreover, since any kind of tax increase is unpalatable to both taxpayers and politicians, some states are pushing to fund highway spending through increased use of tolls, either by raising fees on existing toll roads or converting free roads to pay-for-use. The trucking industry is overwhelmingly opposed to that method as a funding source.

According to the ATA, an estimated 15 percent of all monies collected through tolling go to administrative costs. That is in sharp contrast to gas taxes, where just one penny out of every dollar paid goes toward the cost of collection.

So far, three states have gotten authorization to convert free roads to toll roads, the maximum the law allows. Other states are trying to change that statute, but the trucking industry is fighting back.

As an alternative, the ATA has asked Congress to raise taxes on both gas and diesel fuel to fund infrastructure repairs and expansions, “but the politicians don’t have the will to do that,” Osiecki says. “We’d even accept just a diesel tax increase, but they won’t even do that. It’s mind-boggling,” he adds.

Another major fight for the ATA is over proposed changes to the CSA’s Hours of Service regulations. While the maximum driving time per day, 14 hours, and the minimum time off, 10 hours, remain the same in the new proposal, changes to some of the restart provisions would effectively reduce seat time. Under the current rules, a driver can restart his Hours of Service after taking 34 consecutive hours off. The new rules call for two consecutive nights of rest, which would push the restart up to 45-48 hours. Other changes include limiting restarts to once per week and a mandatory half-hour rest break during each shift, further reducing drive time.

“The position of the ATA is that we see no need for the changes. The industry has been safer than ever under the existing rules that have been around since 2005, and we really don’t believe there’s much scientific or research basis to change it,” Osiecki says.

The ATA has sued the Federal Motor Carrier Safety Administration to halt the changes. A decision on the matter is expected shortly before the proposed date of implementation in July 2013. The industry is eagerly awaiting the outcome.

“Everyone on the trucking side says that’s going to be a game changer,” says Weldon. “I’m a big supporter of CSA regulations and think they’re necessary, but the Hours of Service that have been proposed can have a drastic effect on the way products are shipped, both for shippers and transportation companies. It’s a huge issue on the table.”

One method of combating the reduced hours of service is through equipment upgrades. The use of new technology is enabling more of the on-duty time to be spent on the road. The most notable development has been the use of on-board recorders, GPS devices that provide a variety of information to both the trucker and the trucking company, including driving speed, miles per gallon, hard braking and other factors. Given this information, companies can determine optimal routes and times and driving modifications that can improve fuel economy and safety. The technology also serves as a tamper-proof method of logging information, a major switch from the pencil and paper approach used for decades.

Initially scoffed at by many drivers, usage of such devices has steadily increased. The ATA supports mandatory use of the devices in all vehicles. “This has helped our members understand these things do work, they help drivers comply, they help with safety and they help companies manage their fleets better,” Osiecki says.

More and more truckers are getting on board with on-board recorders. “Everybody seems to be embracing technology,” says Starks a FTR. “If the owner-operators are starting to embrace it, that’s a pretty good sign, because they’ve not always been quick to adapt.”

Another advancement that can reduce the time spent loading and unloading heavy material like steel and aluminum is a new flatbed design. Redieh’s Transit Lines Inc., Willowbrook, Ill., is using a coil trailer with an 18-inch drop, which lowers the center of gravity for the flatbed, allowing the material to be strapped in with a simple 75,000-pound nylon strap. Use of this type of trailer can cut 20 to 30 minutes off the load time. “We run several of those trailers, and it works extremely well with the short-haul stuff,” says Thomas W. Rediehs, company president.

Other advancements, in various stages of adoption, include a trend toward automatic transmissions, anti-idling technologies, and skirts on trailers to assist with fuel economy. A host of other features, such as roll stability, lane departure warning signals and forward collision mitigation systems, are improving safety performance.

One area that needs further development is the diesel engine technology. While automobile makers have figured out how to make engines that are both cleaner burning and more fuel-efficient, the same is not true for truck engine manufacturers. “The air is cleaner coming out of the pipe, there’s no question about that, but there’s a new component in the exhaust that makes the engine less reliable and not as efficient,” Ritter says.

These emissions enhancements are partly to blame the increased price tag on trucks, which is a factor in the tightening capacity. “There’s been some extreme inflation on the equipment side,” says Ritter, who notes that the price of tractors and trailers has doubled in the last 10 years. The cost of used vehicles has skyrocketed, as well.

All of this is why Starks projects that trucking capacity utilization will approach 100 percent by the middle of this year. He forecasts a 2 percent increase in trucking freight this year and another 3 percent increase next year.

For the metals shipping segment of the transportation market, the crunch is even more imminent, Cottingham says. “This coming summer, we’re going to see the worst load-to-driver ratio we will ever experience.”

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