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The Roemer Report March 2016
 

 

Choppy Waters Ahead When it Comes to Drivers and Wages

For most out there operating a fleet of trucks, the idea of more regulations, especially those governing driver working conditions and safety, is enough to give one serious pause. Navigating them is tough already, and now lawmakers are looking to pile on a bit more.¬† The industry’s analysts and media are agreeing the trucking industry is about to experience a major productivity hit from a number of on-the-horizon regulatory initiatives, some of which are expected to cull the truck driver labor pool significantly as new regulations begin to take hold.

Fleet Owner magazine recently reported that in a conference call hosted by Stifel Financial Corp., Gordon Klemp National Transportation Institute’s (NTI) president said that “while ‘regulatory drag’ is an issue that’s been around for a long time, it’s impact on the industry is about to be felt acutely.” Noting that ELDs (electronic logging devices) are already being used, he pointed to the coming adoption of speed limiters and driver drug compliance testing will put tremendous pressure on fleets to find and retain drivers.

“ELDs are here and speed limiters are on the horizon, with hair testing tending to grow in use,” said Klemp. Interviewing fleets that implemented ELDs Klemp said “they saw a 10% to 15% crunch on productivity almost instantly, though that is now down to 5%.” The risk to a front-end productivity hit, Fleet Owner explained is that drivers initially don’t know how to use the devices properly while motor carriers spend time sorting out how to manage the technology and data effectively. “When we see them roll through industry, I think we’ll settle out to a 5% net loss in productivity,” Klemp explained. The speed limiter rule will also impinge new costs on the industry, said Klemp, to the tune of another 3- 5% in productivity, though that will likely vary quite a bit among fleets.

Drug testing of drivers is also expected to push drivers out of the labor pool. Certainly drivers have a choice not to imbibe, but hair drug testing has the ability to detect the presence of drugs in the blood stream long after these substances are consumed. Recently, hair testing has come to be seen as a powerful tool for the detection of drug and alcohol abuse. Hair provides a long-term history of drug and alcohol abuse by trapping biomarkers in the fibers of the growing hair strand. When collected close to the scalp, hair can develop drug and alcohol biomarkers that appear in 1-7 days after the last use and provide up to a three-month history of alcohol and drug consumption. Hair offers a sample that is simple to collect, somewhat difficult to adulterate, and easy to ship. Klemp explained that hair-based drug testing has had a pretty big impact already: “They went from 5% to 8% rejection rates to an 11.6% rejection rate. But then it dropped back down to 5%.” Why the drop? Klemp explained that potential drivers may be opting themselves out all of which has the potential to lower the pool of available drivers by 5%.

According to Fleet Owner, add it all up and the industry is facing a 15% loss in productivity due to regulatory drag and that their estimate is likely low because they only looked at three.

There is no doubt he industry workforce is peaking age-wise, and that’s not great considering the physical demands of the profession. ¬†Right now, about a third are aged 45 to 54, another third or so 35 to 44 and about 14 percent 55. Recruiting is challenging and let’s face it, we’re not attracting our kids and grandkids to drive trucks. Experts say ELDs are exacerbating the problem to a certain degree because older drivers would rather quit or retire rather than “monkey” with new technology or let ‘Big Brother’ into the cab.

Klemp said data shows that when drivers use the technology for 30 days most end up liking it, but it’s getting drivers to stick with it that long that going to be tough. Ultimately though, by 2017 everyone must use them, so it’s not going to be optional.


Demand High, Supply Low

With all that is occurring to suppress the pool of available drivers and regulators doing their best to diminish operator productivity, nothing has been depressing the demand for drivers. Refer to the immutable law of supply in demand if you are having trouble understanding why, after years behind the wheel truckers are only now seeing their paychecks grow. Media reports say, in the past, year many freight haulers have pushed through their biggest raises in decades.

According to NTI average pay for long-haul truckers jumped 17% since 2013 to a record $57,000 this year, compared to average U.S. wages which rose less than 4% over the same period. The American Trucking Association said the long-haul trucking industry, which employs about 800,000 today needs an additional 48,000 drivers. Where are they going to come from? That is a central issue, but closer to home, this means fleet operators are going to have to work even harder to recruit and retain driving talent. Easy to say, but drivers will want to work and stay working for employers who pay extra close attention to excellence in all aspects of operations-especially those that support drivers and their careers on the road.

EPA throws $26 Million at diesel Engines to help clean them up

The U.S. Environmental Protection Agency (EPA) announced recently the availability of $26 million in grant funding to establish clean diesel projects aimed at reducing emissions from the nation's existing fleet of diesel engines. The agency is soliciting proposals nationwide with priority given to projects that engage and benefit local communities and applicants that demonstrate their ability to promote and continue efforts to reduce emissions after the project has ended.

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Traffic control of a different kind
The Ohio State Patrol is working with Truckers Against Trafficking to educate drivers on how to recognize the signs of human trafficking and ways drivers can help fight this awful activity.

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Truckers: You’re Smarter and Greener apparently
While many in the industry think drivers are becoming fossils, others think they are getting better at their jobs through the use of information technology and winning the game in new ways.

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Bitter battle for bathroom breaks
Alliteration aside, a bill funding the FAA may be in jeopardy because of a provision covering trucker’s bathroom breaks and how these breaks from truck operation are compensated. Here’s two takes, one from the hill and one from the industry.

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Keep your head on a swivel folks
DOT Foods took a local Fox affiliate on a ride-along to show them what their truckers see on the road. It’s an eye opener!

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The ROEMER Report  

I'm Wellington Roemer. Publisher of the Roemer Report. Since 1978, The Roemer Report has been giving trucking executives the information you need to run your business. We research the industry's metrics, politics, developments, technological and operational trends so you don't have to. Our Report saves you time by digesting key industry news into short, clear stories. - Avoiding information overload. Thank you for giving the Roemer Report your attention today, we work hard to be worth your time.

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