Trucking Industry Faces Retention Problems
There is a misconception of a truck driver shortage in the United States during the pandemic and its consequences. The trucking industry faces a retention problem rather than a shortage and highlights the challenges faced by drivers who entered the profession expecting steady work and income.
The trucking industry has experienced boom-and-bust cycles since deregulation in 1980. The recent boom in the industry, driven by factors like low diesel prices and government assistance during the pandemic, led to a surge in demand for truck drivers. Many new entrants and existing drivers became owner-operators to capitalize on high freight rates.
However, the boom was unsustainable, with companies sometimes exaggerating their demand for truckers. Rates began to decline in 2022, exacerbated by events like the Russia-Ukraine conflict and rising diesel prices. The oversaturation of the market, especially affecting drivers in the “spot market,” led to intense competition and lower rates.
The struggles of truckers who initially benefited from high rates but eventually faced financial difficulties as rates fell and expenses increased. Many other truckers experienced similar challenges, contributing to increased competition in the industry.
Furthermore, as inexperienced drivers often work for large companies and may lack the necessary skills to navigate challenging conditions, leading to an increase in accidents involving large trucks.
The narrative of a truck driver shortage, fueled by industry associations and government initiatives during the pandemic, contributed to the industry’s overcapacity. The problem lies with the job conditions rather than the workers themselves.
While the narrative of a driver shortage has disappeared for now due to intense competition, the prediction is the trucking industry operates in cycles and a driver shortage may re-emerge in the future. As independent operators exit the market, the cycle may bottom out, creating demand for truckers, higher rates, and a return of the shortage narrative.