The trucking industry’s hiring and retention crisis

While most of the US economy is slowly recovering from the pandemic induced crisis, the transportation industry is paddling, with its hiring and retention crisis still looming. The unemployment rate in the U.S. transportation sector was 6.4 percent in August 2021 according to Bureau of Transportation Statistics (BTS) and based on the analysis of data from the Bureau of Labor Statistics, meaning it is down more than 50% from August 2020’s 13% yet still remaining above the 4.8 percent rate of the pre-pandemic August 2019. Certainly during the COVID-19 pandemic the transportation unemployment rate peaked at 15.7% in both May and July 2020, however this reveals the industry’s problems are far from over and it is slower to recover.

According to the American Trucking Associations, the trucking industry is very much faced with a hiring and retention crisis. While the industry was already running 60,000 drivers short pre-pandemic in 2019, the situation has aggravated now. As freight operators nationwide are scrambling to meet the increased transportation demands, driven by the spike in consumer spending, trucking companies desperately try to lure more drivers into the workforce maintaining America’s supply chains humming. 

For comparison, the overall U.S. unemployment rate in August was 5.2%, down 38% from August 2020’s 8.4%. In pre-pandemic August 2019, the overall U.S. unemployment rate was 3.8% and it peaked during the pandemic at 14.4% in April 2020. These single percentage point differences might not reveal the full seriousness of the problem. Of its pre-pandemic labor force of circa 1.52 million, the transportation industry lost 6%, which is roughly 91,000 employees. Certainly during the summer, the industry regained 63,000 jobs lost back, but it still remains 33,000 jobs short of employment levels of February 2020. Hence freight operators are doing everything they can to attract new hires, with many offering higher wages and incentives. However these efforts seem still insufficient.

A few issues are being attributed to the cause of the problem. First is the current truck drivers’ median income, which sits at $47,130 per year. Many drivers feel such pay is not enough to remunerate the amount of the time they’re on the road and the stresses their jobs induce.  Equally, drivers deem their “detention time” pay (i.e. the amount of time they have to wait due to a shipper impeding them from loading or unloading) and other benefits of the industry ill compensated for their job requirements. Hence many of the older drivers opted for early retirement, and there isn’t a younger generation of truckers to take their place immediately.  

These supply chain issues have now become serios enough to grab the attention of the Biden administration, which has created a task force to render solutions for the stagnating economic recovery. A possible fix is lowering the minimum age of truckers from 21 to 18 for interstate drivers. However many in the industry criticize the proposed move, suggesting that teens may not be up to the task and could get into more accidents. Other areas of intervention might include the tedious tax burden truckers are faced with. Either way the hope is the presidential administration will identify the causes of the freight industry crisis and resolve them accordingly.