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Estimated 25,000 truck driving positions to go unfilled in 2013, who can fill them?

Take a look. Almost anywhere you look in the transportation industry, you will see some sort of report concerning the projected truck driver shortage. With the trucking industry well on the road to recovery from the recession, 2012 showed some favorable gains. According to the American Trucking Association, truckload activity was up 1 percent, truckload intermodal loads were up 20.1 percent and less-than-truckload tonnage increased 4.3 percent from 2011.

Predictions for 2013 show continued increases, but at a slower rate than 2012.

Overall, though, the shortage of truck drivers still looms. The industry will need more than 96,000 new drivers every year for the next 10 years, according to ATA, to offset lost drivers and older drivers getting out of the business. Fewer and fewer young people are moving into the industry as a way of life. An estimated 20,000 to 25,000 driving positions could go unfilled this year, according to projections.

So, where can the industry turn to fill the void?

Women.Rosie Riviter

According to statistics from 2008, 8.8 million people participated in one way or another in the trucking industry. Of those, only about 15 percent were female, of 1.3 million. That, however, involves the entire trucking industry, from offices to drivers.

There were about 3.4 million truck drivers in the United States in 2008, of which only about 166,000 were women. That comes down to about 4.9 percent of the total driver population.

The trucking industry has always been thought of as a predominantly male-dominated industry. The female presence in the industry, though, has been increasing over the past decade with more women drivers, owner and managers.

Several studies indicate that women are well-suited for leadership roles within companies. Those studies show that women are better at communication, engaging employees and overall planning than men. The same, I believe, would be true for the trucking industry and truck drivers. While the stigma of the industry stereotypically places a male behind the wheel of a big rig, women are well suited and perfectly capable of doing the same job.

The image of men being behind the wheel of big rigs, though, is perhaps the first and most difficult hurdle to clear when talking about women filling the gap. Another issue that could have an impact on women driving is the time away from home. This has also become an issue with male drivers, who want to spend more time with their families. The same would be true with female drivers and may develop the industry to consider shorter routes and delivery schedules to reduce the time spent on the road.

One area that will help in getting women more involved in the trucking industry, though, comes from the Women in Trucking Association. In 2012, WTA formed a separate, charitable organization known as the Women in Trucking Association Foundation, a nonprofit organization designed to provide funds for members seeking training in areas vital to the trucking industry.

After spending a year obtaining funds, the organization is now ready to award its first scholarships. The $500 scholarships will be awarded in four categories: leadership, safety professional, technical skill and professional driver. Applicants for the scholarship are able to submit a request for funding online at www.WomenInTruckingFoundation.org. To be awarded a scholarship, you must be a member in good standing with the organization.

Scholarship applications will be accepted through the end of July and scholarship recipients will be notified in August. Funds will be dispersed to the educational facility of the woman’s choice on behalf of the grant recipient.

It is a good start. Women and the trucking industry are a great fit. It is an employment pool the industry can draw from to overcome some of the shortages that are predicted and would benefit both the industry and women in the long run.

 

About the Author
Larry Hurrle is the editor of IT Magazine. Hurrle, 51, has been a professional journalist for more than 30 years at both daily and weekly newspapers in the Northwest. He attended Boise State University and has served as editor of the Kellogg Evening News in Kellogg, ID; the Argus Observer in Ontario, OR; and the Independent-Enterprise in Payette, ID.

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Avoid the Ill-Planned Innovative Rollout – Plan, Communicate, Execute

It happens repeatedly. A company adopts a new technology platform that ostensibly will ease the workload, streamline operational processes and result in overall gains in efficiency and budget spending. The intention is spot-on, but the execution is decidedly less so. A post-mortem will usually reveal errors in the execution but will miss the real culprit: planning errors. While “Garbage In-Garbage Out” (GIGO) is true for any process, it is especially apparent in any change initiative. If the initiative is not planned properly, the end result will almost always reflect that lack of planning.

I frequently observe companies that attempt technology-based change initiatives with the latest and greatest new technologies (i.e. EOBM, TMS-rollouts, etc.). Many companies believe that the provider of this technology will also ensure that their technology will successfully effectuate the intended changes. They effectively defer the planning, execution and, most importantly, control to this third party. More times than not, this recipe fails and along with it goes the change initiative. The result: Blame the technology and try to find a “better technology.” In other words, they blame the equipment and not themselves.
When my clients engage my consulting services to help effectuate change, I advise them that successful change involves a three-step process: Plan, Communicate and Execute. These are not mutually exclusive as each step comprises elements of the other two steps.
Step 1 – Plan
Since planning is the most critical step, most of my attention will be here. Successful planning means an objective discovery of the real problem driving the change. Frequently the stated and/or obvious problem is not the real problem, but rather a symptom of a bigger, underlying issue. We can better discover the real issue by channeling our inner four year old and repeatedly ask why. In Total Quality Management (TQM), the 5-Why Process is a useful tool to achieving real issue discovery. For example, if we are having trouble staying compliant with the Unsafe Driving portion of CSA:
Q1: Why are we having this trouble?
A1: We’re ticketed too often for speeding, illegal lane changes, etc.
Q2: Why are we getting ticketed so often?
A2: Because our drivers are rushing to make their deliveries
Q3: Why do they need to rush to make their deliveries?
A3: Because their schedules require them to make “x” number of daily deliveries
Q4: Why do we need to schedule so many deliveries per driver?
A4: Because otherwise we can’t meet our service commitments
Q5: Why are our service commitments so tight?
A5: Because the competitive landscape requires them.

The 5-Why Process doesn’t have to repeat 5 times and it could actually be more than 5 questions. When we hit a why, that we don’t have a clear answer for, we likely are at the real issue.
Once we have discovered the real issue, we need to properly define the scope of both the problem and its intended solution. A frequent planning occurrence is when the problem is clearly defined, but the solution slowly expands to include more than just the problem. In project management terms this is called “scope creep.” While it is admirable that a solution goes well beyond its intent, if the “well-beyond” is not planned, it could compromise the entire initiative. The signs of scope creep will usually include budget and time overruns.

Once the scope has been established, proper risk management must be employed. What are the risks involved with rolling out this new technology? If it is an EBOM rollout, will our veteran drivers have trouble with it? If they do have trouble, can we provide them the proper support? With the difficulty in finding new drivers, what is the risk with rolling out this initiative and possibly losing some veteran drivers? What is the plan if we do lose these drivers? While we cannot possibly plan for every contingency, we can plan for every category of risk. This will give us a significant head-start in successfully addressing the problem and continuing unabated.

Step 2 – Communication
There is no such thing as “over-communication.” The key is to provide honest, constant and relevant communication between the change team members, upward to senior executives and outward to those that will be affected by the change. This communication must take place in every step of the change process for the initiative to be successful. Since most of us resist change primarily because of the fear of the unknown, we must make special and concerted efforts to combat this through every form of organizational communication (i.e. face-to-face, email, video conferencing, etc.). Most importantly, if we don’t have an immediate answer, we must honestly and in a timely fashion, communicate this as well.

Step 3 – Execute
Assuming that we have planned and communicated properly, we still must execute according to plan. If we have planned properly, then the likely “hiccups” inherent in any change initiative will have been planned for and can be addressed according to plan.
The end result will not be an ill-planned innovative rollout, but a rollout that encompasses the best of change management and most importantly, accomplishes its intended goal(s).

About the author

MoeGlennerMoe Glenner is a twenty year plus veteran of the logistics and supply chain industry, a highly volatile and frequently changing industry. Throughout this time, he has served in a variety of management and senior management roles as well as an outside consultant. As a one-time entrepreneur, Mr. Glenner founded 2 separate privately-held transportation companies.

Mr. Glenner holds a Bachelor of Arts (BA) in History from Northeastern Illinois University, a Masters of Business Administration (MBA) from Lake Forest Graduate School of Management (Lake Forest, IL), Lean Six Sigma Black Belt Certification from Villanova University (Philadelphia, PA) and is an professional general aviation pilot.

As Director – Global Logistics for Steel Warehouse Company (a $2 billion major enterprise in the steel industry), Mr. Glenner transformed both the culture and finances of the previously ailing transportation department from a cost center to a profit center, earning him the respect and accolades of colleagues and senior management.

Currently he is President of PURElogistics, LLC, a leading change management, logistics and supply chain consulting firm entirely dedicated to providing best practices in change management, logistics and supply chain strategies. He is an in-demand and frequent speaker at industry trades shows and conferences, speaking particularly on leading organizational change.

Mr. Glenner, a longtime Chicago native (and die-hard Bears/White Sox fan), currently resides in South Bend, Indiana.

***This is an article written for IT Magazine, you can view the full  March/April 2013 magazine at itmagazine.truckstop.com

by admin

(Non-commercial Drivers are) On the Road Again

Cyclists often display bumper stickers or yard signs reminding motorists to “share the road.” The U.S. Department of Transportation even has a website providing information about safe road sharing.
Although these reminders are typically lighthearted, the message is serious: as road congestion increases, vehicles of all types are more likely to be involved in collisions. This unsurprising relationship between road congestion and vehicle collisions has been documented repeatedly for quite some time, and applies as aptly to large commercial trucks as to smaller vehicles.
For this reason, drivers of all vehicle classes should take note of the recent travel monitoring reports from the U.S. DOT, which show that monthly miles traveled increased year-over-year during nearly every month in 2012. During the recent recession, motorists broke a long-running trend of annual increases in vehicle miles traveled, and the trend then remained flat to decreasing for much of the past five years (Figure 1).
JeremyWest
As the economy slowly improves – and provided gasoline prices remain fairly stable – annual vehicle miles traveled are likely to continue increasing, perhaps returning to the long-term trend. Over the next few years, the phrase “share the road” may ring truer than ever.

by admin

The Ebb and Flow of Truck Drivers

The U.S. Bureau of Labor Statistics reported last week that 155,000 jobs were added nationally during December, with the national unemployment rate remaining unchanged at 7.8%. For trucking, a key portion of this report was that manufacturers and construction firms respectively added 25,000 and 30,000 workers to their payrolls. This underscores that a sizeable reduction in potential truck drivers may be an important factor for the trucking industry during 2013.

Anyone who has spent a long time in trucking can tell you that construction and manufacturing are some of the closest employment substitutes for possible truck drivers. Like trucking, these occupations are physically demanding, require long hours, and necessitate safe handling of heavy equipment.

As an economist, I am interested in exactly how close manufacturing and construction are as substitutes for trucking employment. To address this question, I use the “Merged Outgoing Rotation Groups” version of the Current Population Survey (CPS), which is originally collected by the U.S. Census Bureau in partnership with the Bureau of Labor Statistics.

One feature of the CPS is that many individuals are surveyed about their employment twice, one year apart. This allows for researchers to link (anonymous) individuals across two sequential years to examine changes in their employment. Below, I use the CPS from 2000-2011 in this way to study transitions into and out of full-time employment as a truck driver.

Over the past decade, the U.S. averaged roughly 4.15 million truck drivers each year, representing around 2.6 percent of all full-time employees. Note that this number includes all surveyed individuals who described their employment as truck driving, not just TL and LTL truck drivers. The data do not allow for further dissection of this occupational category.

Using the sequential links in the data, the CPS shows that about 75% of respondents who were employed full-time as truckdrivers remain employed full-time as truck drivers during the following year. In Figure 2, I examine the roughly 25% of drivers who changedeither to or from driving a truck for employment from one year to the next.

Figure 2 displays the ten largest employment categories for individuals who transitioned into or out of full-time truck driving between their surveys. Interestingly, transitions to and from other types of employment appear to be very balanced, with drivers as likely to switch to any other particular occupation as they are to switch from it.

Of truck drivers who changed their full-time occupation, the largest employment category is Other Transportation or Warehousing (e.g. driving a bus). Construction and Manufacturing are respectively the second and fourth most likely alternate industries for truck drivers, representing a combined 17% of occupational transitions. So, during the past decade about 4.25% (17% of 25%) of truck drivers shifted to employment in either construction or manufacturing from year to year.And, about 4.25% of “new” truck drivers transitioned from either construction or manufacturing in each year.

For these reasons, it is well worth keeping a close eye on anygrowth in construction and manufacturing employment as we enter 2013.

 

About the author
Jeremy West is the Internet Truckstop research economist for the weekly Trans4Cast. Jeremy examines the broader economic picture and reports how the current economic headlines relate to the trucking industry. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. His research focuses on empirical analysis of topics in industrial organization, particularly those affecting the transportation sector. In addition to his academic training, Jeremy held several previous positions in corporate financial planning and economic forecasting. Jeremy enjoys the opportunity to offer highlights and analysis of the trucking industry to subscribers each week. Take advantage and subscribe today!

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CARB Webinars receive an overwhelming response

 

Today marked the first day for ITS and CARB’s month long webinar series, “Will You be Able to Drive in California?”

With over 150 participants that came to the webinar full of questions regarding the new laws for driving in California. There will be another chance next week for more questions to be answered when another webinar is offered. The topic for January 16th is  Diesel Particulate Filters (DPFs), Truck and Bus Regulation, TRUCRS Reporting System. Don’t miss your chance to register! Click here for more information and registration.

 

by admin

Some (Cautiously) Optimistic News for the Economy

Last week, two key economic reports showed an improving environment for trucking. In one, the U.S. Census Bureau reported that total monthly retail sales increased by a seasonally-adjusted 0.3% during November, or 3.7% year over year. In the other, the Federal Reserve documented a full percentile increase in the monthly industrial production index for November, including a 1.1 percentile improvement in the manufacturing component.

Contrasted with the weakness seen in these measures during recent months, the November reports are especially promising for trucking. The improvement in industrial production, for instance, was the largest monthly increase in this index since December 2010. Retail sales, meanwhile, are now up nearly 25% from their recessionary bottom.

The scene is not all rosy, however. As the Fed’s report noted, “The gain in November is estimated to have largely resulted from a recovery in production for industries that had been negatively affected by Hurricane Sandy, which hit the Northeast region in late October.”

Moreover, inventories continue to grow throughout the supply chain. As shown in the figure, the growth rate of inventory accumulation has outpaced that for retail sales and production since late 2010, and the volume of business inventories steadily increases. So long as the supply chain struggles to move existing stock, we will continue to see a disconnect between new production and demand for more trucking.

Whether the November improvements in manufacturing and sales will continue is an open question. Some early answers to this question will be provided this week in the December regional production reports from the Fed Banks in New York, Philadelphia, and Kansas City.

 

Jeremy West
ITS Economist

by admin

NEW EOBR from uDrove!

The U.S. Congress has passed the MAP 21 Transportation bill that requires drivers to track their hours of service using electronic logging devices. All truck drivers in the U.S. and Canada who drive more than 100 air miles from their home base must maintain driver logs. These logs are monitored by federal authorities to ensure that drivers are not exceeding their time on duty or driving hours. An Electronic On Board Recorder (EOBR) fleet solution automates Hours of Service reporting.  If you are required to file a record of duty status (RODS), this mandate affects you.

When the FMCSA first made its cost assumptions for requiring the use of EOBR, it used a popular device in the marketplace that a number of large fleets had adopted as a fleet management and electronic logging solution. The price for the hardware of this device was estimated at $1,675, according to the Preliminary Regulatory Impact Analysis. Smaller companies and owner operators that wanted a Fleet Management System to help reduce operating expenses, simplify business management, and improve driver habits could never justify the expense of purchasing the equipment, or committing to a long term contract. uDrove has built a solution for companies that is affordable and easy to use, minus the contracts.

While implementing an EOBR system in your fleet does require an initial investment, the long term benefits outweigh the costs incurred up front. Hours Of  Service violations are virtually eliminated and Fuel/Mileage tracking is done electronically, simplifying IFTA reporting and reducing driver error.  Not only does uDrove eliminate driver error but we have integrated with PC Miler to give our customers access to real-time date for a single truck, a group of trucks, or an entire fleet’s in-state and interstate mileage, with automated reports for fast and efficient compliance with state and federal tax regulations.

Using smart phone technology, drivers can also maintain their fuel and business expenses electronically. By taking a picture of fuel and expense receipts, anything a driver spends money on can be captured and kept on their web account at uDrove.com.

uDrove provides companies a simple, cost-effective solution that truckers can purchase pre-mandate, and still have it make sense financially. They came into the market well before the MAP 21 Transportation bill was proposed and passed. With the data received from the EOBR and the capabilities of the smart phone, companies realize their R.O.I. (return on investment) almost instantly.

For more information on uDrove’s EOBR please contact 888-983-7683 or visit eobr.udrove.com

by admin

Upward 2012 Q3 GDP Revision Reflects Mainly Growth in Inventories

Last Thursday, the U.S. Bureau of Economic Analysis reported that gross domestic product (GDP) grew at a 2.7% annual rate during the third quarter of 2012, which was an upward revision from the preliminarily reported annual growth rate of 2.0%. At a first glance, this appears to be good news, but as economist James Hamilton points out, a more thorough reading of the report shows that the U.S. economy is “growing a slower rate than any of us would like.”

In particular, 0.8 percentage points of the growth in GDP translated into increased inventory accumulation, and 0.7 came from higher levels of defense spending. Excluding these factors, Q3 GDP grew at a measly 1.2% annual rate. Hamilton reasonably anticipates that GDP will continue to grow at below-average rates during 2012Q4 and in the near future.

For the trucking industry, I find the increased accumulation of inventories to be the most concerning aspect of this report. As shown in the below figure, U.S. total trade inventories increased by $135b, or 9.1%, from March 2011 through September 2012 (the most recent month currently reported by the Census Bureau). Over the same time period, total retail sales actually declined by $17b, or 1.4%. Basically, retail sales have been largely flat for nearly two years, while inventories have steadily accumulated.

I have discussed the problems of increased inventory accumulation previously on this blog, and it remains troubling for trucking to have increasing production volumes be simply stashed in warehouses.

New orders for durable goods (products with a useable life of at least three years) remained flat during October (.pdf), as did new home sales (.pdf). Moreover, consumer confidence improved by only 0.6% during November.

Recently, the American Trucking Association reported that truck tonnage declined by 3.8% in October, the first year-over-year drop since November 2009. Clearly, the trucking sector is in need of a positive shock to demand. A possible source for such a shock is much less clear.

 

Jeremy West
Internet Truckstop Economist

by admin

Surprise, Surprise… the Manufacturing Sector Remains Choppy

By Jeremy West, Internet Truckstop Economist

Over the past few months, it has seemed like U.S. manufacturers are treading water. Factory output isn’t dramatically sinking, as occurs whenever the economy is entering a recession. But, on the other hand, we’re not seeing any production gains worth cheering about either.

Manufacturing Orders and Production

Two basic metrics are tracked for manufacturing output: the quantity of current production and the volume of orders for future production. Last Thursday, the Census Bureau reported that new orders in August for factory production fell 5.2% month-over-month and 2.5% year-over-year. This was the first year-over-year decline in new orders since November 2009.

Much of this decline resulted from a 101.8% drop in orders for commercial aircraft. As shown in the figure, orders excluding transportation equipment increased by 0.28% YOY. Regardless, the message is clear: manufacturing production is stalling.

Separately, the Institute for Supply Management reported that the Purchasing Managers’ Index (PMI) increased to 51.5 during September. This was positive news: any value above 50 indicates manufacturing growth, and the index has been below 50 since May. The next few months will show whether this represents a temporary spike in manufacturing activity or a reversal of the contraction seen in the manufacturing sector during 2012Q2.

So, the production picture isn’t entirely gloomy, and some regions of the country are performing better than others. During September, manufacturing output improved in Texas and in the Central Atlantic regions, worsened in New York and in much of the Midwest, and remained largely flat in the Philadelphia region.

Taken together, these reports offer a mixed outlook for total manufacturing—and, subsequently, trucking—with aggregate production activity trending to the downside. The next Federal Reserve Industrial Production and Manufacturing report is scheduled for October 16th. Don’t be surprised to find that factories continued to slowly churn.

by admin

Market Demand Index (MDI) Decreases 2%

FOR IMMEDIATE RELEASE

NEW PLYMOUTH, ID (September 25, 2012) - Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) decreased 2% to 11.64 from 11.83 the previous week as reported in the weekly Trans4Cast.

The overall average equipment rate decreased 2% to $2.04 from $2.09 the previous week. Flatbed rates decreased 3% to $1.90 from $1.96 the previous week. Reefer rates decreased 3% to $2.08 from $2.16 the previous week. Specialized truck rates increased 2% to $2.45 from $2.41 the previous week. Van rates decreased 5% to $1.72 from $1.82 the previous week.

“With an upcoming national election, a looming “fiscal cliff,” and continuing instability in the Eurozone, the economic climate is quite unclear. And, the outlook will remain murky until businesses and consumers can better determine the political environment in which they must operate.” Jeremy West, Internet Truckstop Economist

About Trans4Cast powered by Internet Truckstop
Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data.  Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update  on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.