The perpetual truck driver scarcity will not be actual

The seemingly perpetual marketwide truck driver scarcity will not be actual, neither is it marketwide. Whereas particular fleets can and do have driver shortages — i.e., unseated vehicles — the trucking market rapidly corrects. 

There are also durations of capability shortages, however these get addressed in a short time by the market. 

With no limitations to entry, almost anyone can create a trucking firm. That’s precisely what has occurred over the previous 4 years. 

Working authority for motor carriers of property issued by the Federal Motor Provider Security Administration grew by 45% from July 2019 to August 2023, in accordance with FreightWaves SONAR’s newest data, released in partnership with Carrier Details. Truckload demand as measured by the SONAR Outbound Tender Volume Index (OTVI) is barely up about 11% throughout the identical interval. 

The present troublesome situations in trucking are a results of an excessive amount of capability chasing too little freight. 

The place does the perpetual driver scarcity fable come from? 

Usually talking, the driving force scarcity fable stems from bigger trucking corporations that discover it troublesome to recruit drivers into their fleet operations. In any case, fleets must compete for truck drivers with different trucking corporations. As well as, some licensed truck drivers go to work in different sectors of the financial system, like development and warehousing. However the fleets additionally must compete in opposition to the expansion of unbiased operators. 

The American Trucking Associations propagates the narrative of the scarcity. ATA members encompass midsize and huge trucking fleets, which have more and more turn out to be a smaller proportion of the trucking business’s whole capability. 

The ATA’s membership dues are listed based mostly on firm measurement. For instance, a big fleet with $4 billion in income pays a a lot bigger charge than a service with $50 million in income. Furthermore, the ATA is a commerce affiliation and lobbying group, which seeks to affect Congress when it considers laws that impacts the trucking business. 

Because the ATA encourages Congress to cross legal guidelines and appropriations that fund worker driver coaching and recruitment packages — whereas minimizing laws that favor bigger trucking fleets that make use of drivers slightly than unbiased owner-operators — it helps to color an image of a perpetual driver scarcity. 

In any case, if Congress realized how briskly capability enters the market from unbiased operators when there’s a capability crunch, it will mitigate the necessity for worker driver recruitment and retention entitlement packages.  

The FMCSA information tells the story in regards to the development of the small unbiased fleet

SONAR, FreightWaves’ proprietary information platform, collects information from various sources, together with the FMCSA, the regulatory physique that oversees the trucking business. One of many FMCSA’s information units tracks fleet registrations by the variety of vehicles which might be assigned to a selected fleet. 

SONAR breaks down the fleet sizes into cohorts to supply a extra correct reflection of the expansion and fragmentation of trucking fleets. 

Within the SONAR chart beneath, the white line is the full variety of tractors amongst fleets of 1 to 6 vehicles; the purple line is the full variety of tractors amongst fleets of seven to 11 vehicles; the yellow line is the full variety of tractors amongst fleets of 12 to 19 vehicles; the blue line is the full variety of tractors amongst fleets of 20 to 100 vehicles; the orange line is the full variety of tractors amongst fleets of 101 to 999 vehicles; and the inexperienced line is the full variety of tractors amongst fleets of 1,000 vehicles and extra. 

Of the two.9 million vehicles available in the market, 1.2 million are in fleets with greater than 100 vehicles — or simply 41%. In 2010, fleets with greater than 100 vehicles comprised 54% of whole trucking capability. 

Midsize and huge fleets have issues recruiting new worker drivers, usually because of life-style points. Many drivers don’t wish to be away from house for days or even weeks at a time, particularly in a compelled dispatch operation, which is typical of truck driver fleet operations. 

For truck driving entrepreneurs who wish to have the autonomy of their very own operations, no such challenges exist. In any case, if you wish to dictate which masses make sense for you, based mostly on vacation spot, time in transit and even commodity, you are able to do in order an unbiased trucker with much more management than an worker fleet driver. Due to this fact, unbiased owner-operator entrepreneurs are consistently coming into the market. 

With the limitations to entry for brand new fleets changing into more and more much less burdensome, the variety of smaller fleets within the business will proceed to develop. I broke down this phenomenon final week in an article on the expansion of mom-and-pop trucking corporations. 

A draw back to this pattern? It’s possible that growth and bust cycles in trucking turn out to be extra pronounced and violent. 

However for now, a capability correction is underway and that is welcome information for everybody within the trucking business. 

All the charts offered on this article can be found for SONAR subscribers. Join a demo at this time.