CHICAGO, Oct. 2 (Reuters) - As the U.S. economy firms, with consumer demand and housing starts rising, trucking companies are finding themselves scrambling to find drivers to bring goods to market.
The industry is short about 35,000 truck drivers, according to industry lobby group the American Trucking Associations (ATA). The shortage has left major carriers struggling, pushed up freight rates, and could contribute to an increase in inflation, analysts said. The shortfall could grow to around 240,000 drivers by 2020 if it is not addressed, the ATA said.
To combat the problem, trucking companies are offering incentives to lure truckers to fill vacant jobs. Some are picking up the cost of licensing and many offer signing bonuses.
Derek Leathers, president of Werner Enterprises Inc with a fleet of around 7,000 trucks, said the company needs several thousand new drivers in the next year. “We have freight today we can’t haul because we don’t have the capacity,” Leathers said.
According to DAT Solutions, which provides data to the transport sector, the driver shortage helped push the rate per mile for freight shipped on long-term contracts up 8 percent on the year in August, to around $1.80 a mile. Rates in the spot market, where customers move freight at short notice, rose 14 percent to $1.92.
“The gap between those rates is going to grow,” Werner’s Leathers said.
Industry analysts predict that publicly-traded manufacturers will complain of problems moving goods when reporting third quarter earnings as the peak holiday season nears. Eventually, the increase will hit consumers, said Jason Seidl, a transportation analyst at Cowen & Co.
“This is the mother of all truck driver shortages,” said Seidl.
Trucking companies often experience driver shortages as the economy heats up because drivers find construction and factory work that don’t require living on the road.
But company officials said this is more than a cyclical shift, linking the current shortfall to also regulatory and demographic changes that are creating a structural change.
Federal regulations as of 2013 have limited the hours truckers can drive, and a government system tracking driver records since December 2010 has deterred drivers with checkered safety records.
Demographic changes are compounding the problem. The average truck driver is 55, and more drivers are retiring. Not enough younger workers are signing up, forcing companies like Werner, Celadon Group Inc and J B Hunt Transport Services Inc to offer signing bonuses to new drivers.
Leathers said bonuses range from $500 to $12,000, depending on geography. Bonuses are higher in energy states like Texas or Pennsylvania, where competition for drivers is intense.
Some trucking companies are also covering the up to $7,000 cost of obtaining a license for drivers who commit to driving for a fixed period.
Veteran driver Patrick Witek, 63, had his pick of employers.
Witek has logged more than 5 million miles in 38 years on the job. With two years left before he hopes to retire, Witek has chosen a small firm in central Wisconsin.
“At the company I drive for now, when I go in it’s ‘Hello, Rick, how’re you doin’?” he said. “When I drove for one of the big boys it was ‘hello, 81976.'”
Experts said higher wages will fix the problem. Kenny Vieth, president of ACT Research, which monitors the sector to predict truck sales, notes driver pay has stagnated.
In 1980, Vieth said, the average trucker earned four times the wage of a food service worker. But the $40,940 the average truck driver makes today is just 1.8 times that of food service workers.
“You’re paying someone not very much to live in a box in a parking lot,” Vieth said. “This isn’t a truck driver shortage, it’s a truck driver pay shortage.”
U.S. Xpress Enterprises Inc, the third-largest U.S. private carrier, in August hiked driver pay by 13 percent.
Bob Costello, the American Trucking Associations’ chief economist, said recent pay increases across the industry have averaged 10 percent to 15 percent. But he expects pay to keep rising. (Reporting By Nick Carey; editing by David Greising, Bernard Orr)