Driver Shortage: What Are The Consequences?

Driver Shortage: What Are The Consequences?

 

The driver shortage in the trucking industry of the United States is an unprecedented challenge in terms of employment and keeping up with demand. According to a recent ATA report, the driver shortage is likely to balloon to 175,000 drivers by 2024. It is widely reported to be the largest deficit of any industry in the country. So what does that mean for the public? How will this lack of drivers affect the masses?

The trucking industry’s effect on the US economy is seemingly simple to understand, but its importance is (unfortunately) regularly overlooked. Being regularly overlooked, it’s easy to ignore the catastrophic snowball of events that a driver shortage can lead to. Without freight making it to its intended destination, restaurants and grocery stores aren’t able to serve food, retail outlets aren’t able to sell their merchandise, prices for goods increase, and small businesses are no longer able to compete with larger competitors that have the ability to pay more for merchandise, which may in turn affect the workforce. In short — the entire economy quickly slips into a rut that has the potential to turn into something much larger. Trucking is quite literally the backbone of America.

Thomas Balzer, President and CEO of the Ohio Trucking Association, recently stated to Transport Topics in an interview that “It is at crisis level. Walking into the local retailer and having a shelf full of product is in jeopardy.”

 

Those aren’t minced words and shouldn’t be taken lightly. Let’s dive into the specifics of what it means to have a driver shortage and 175,000 trucks not delivering their freight.

 

As Balzer said, local retailers will initially begin experiencing missed shipments. Their shelves will not be fully stocked. If these products aren’t quickly restocked, many consumers would turn to the larger stores to find what they’re looking for. Thus, small businesses would be in an even larger bind, possibly resulting in layoffs of their employees.

 

Studies have shown that the majority of Americans’ diets are based on foods that aren’t grown locally; meaning that trucks likely delivered the food from a farm hundreds of miles away. If a farmer is unable to find a driver to transport their goods, they’re unable to profit and lose valuable goods. Highly perishable foods — fruits, vegetables, fresh meat, and eggs — would likely see a significant price bump because they’re costing more to get delivered. This may force farmers to look inward to feed their local market instead of a larger mass market. This has good and bad repercussions. On one end, we may see a decline in farmer’s revenues due to their inability to sell out-of-area. On the other hand, we would likely see an increase in local produce sales. According to a report by the USDA, a majority of Americans are happy to pay more for “fresh, local food”. This willingness to pay more may help offset deficits created by not supplying a larger market and would aid in creating a healthier populous in the US, which, as we all know, would be a great thing.

 

Inflation has been a growing problem (pun intended) in the United States for decades. Along with the over-extension of the money supply, the largest contributor to inflation is a decrease in supply and an increase in demand. If products don’t move as freely as necessary, supply drops and demand increases. This creates the perfect opportunity for prices to increase and inflation to continue. The trucking industry is responsible for upwards of 90% of all freight moving in the United States, so rising inflation can easily be connected to inflation.

 

There are obviously many effects on the public that a driver shortage is responsible for, so what is being done to combat this shortage? The United States government is very aware of this issue and has been working to address it. On the floor of the House is HR5358: The DRIVE-Safe Act. The goal of this bill is to remove the limitation on age for interstate drivers. The bill, if passed, will allow drivers under 21 years of age to drive interstate routes if they’ve earned their CDL and underwent additional training. While representatives have introduced that bill, the responsibility of solving the trucking shortage has largely landed on trucking companies themselves and we’re seeing a few great programs and ideas aimed at tackling the issue. Ideas range from switching to hourly pay, to recruiting more immigrants interested in the industry. Companies are also raising salaries and introducing sign-on bonuses up to $10,000, a figure that has never been seen before. Many companies are crafting plans to cut long routes down to shorter, smaller routes split up between multiple drivers in different areas. This, in theory, would allow drivers more home time and would make the job more enticing.

 

At the end of the day, the truck driver shortage is a concerning issue with many, many potential consequences ranging from missing product to unemployment and small businesses feeling more pressure. While frightening, the workforce of the United States has always found a way to solve issues akin to this and we here at Transportation Data Source believe the future looks bright for trucking companies and drivers alike.

 

 
 

Have questions or want a demo? Get in touch today!


Paste your AdWords Remarketing code here
Share This