Maybe you have noticed that there are fewer moving trucks on the road, but more importantly you have observed that there are no trucks to service your employees’ needs in the heat of the summer! What happened???
Let’s go back in time.
In 1980 our industry was deregulated, which allowed moving companies to discount their services higher and higher. At first it was good for competition, but then pricing continued to deteriorate causing drivers to see their profit begin to spiral downward. Then relocation management companies (RMC) began to resell the services of movers, which escalated the discounts even more. As more and more movers joined in to provide their services to the RMC’s, they all agreed to the larger discounts to keep their drivers busy and continue growing their revenues. Then other companies such as move management companies and auditing companies started to get in the game, which eroded the payment to both moving companies and drivers. During this time drivers were taking most of the hit for the higher discounts. Also during the past few years the construction industry has been growing and other trucking opportunities have arisen, so that household good drivers found they could run shorter routes that allowed them to be home much more often. All these factors took a toll on the driver situation and our household goods industry.
Is there a driver shortage?
Well, the government tells us there is a driver shortage, and currently there are more than 50,000 truck positions that cannot be filled. It’s a job that cannot be shipped overseas. And, the truck driver pool is aging as shown in a 2013 study, where 29% of truck drivers were in the 45 to 54 year age group, compared with 23% in all other industries. In the household goods industry the average age is 57 years old. The baby boomers were a great generation, but as they retire there are fewer people that want to fill those jobs. United Van Lines has 1,500 fewer drivers now than they had five years ago, and other household goods carriers are experiencing the same thing. The problem we are all faced with now is finding people to replace the drivers leaving the industry.
Millennials have no desire to be truck drivers, much less household goods drivers, since they are required to not only drive but also load and unload as well. It is no wonder, as they understand that days on the job are long, it’s hard to have a family, and drivers are required to be in a seat and watch the road for hours at a time.
More importantly, like all jobs everything always comes down to compensation, which unfortunately has gone up very little in recent years for the household goods drivers. As the tariff that their compensation is based upon has increased by only 1 or 2 percent each year, the discounts that were given shippers reduced most of those increases. As a result of this the compensation paid to drivers has increased very little over the past seven years, but at the same time costs have continued to increase. The costs for new vehicles, tires, repairs, labor and insurance have continued to outpace the increases that drivers have received and thus reduced the ability of drivers to continue running their business profitably. As if the increased costs and reduced revenues were not enough to push the drivers to other industries over the past two years, they have faced two other obstacles.
Last year California changed its laws and now requires that all trucks be Carb-compliant, which requires a $20,000 retrofit on their engines or purchase of a newer vehicle. If they chose not to do this, these drivers were not allowed to drive into California without being fined. This also has an impact on corporate accounts during our peak season, as there are not enough trucks to service shipments into and out of California.
We all know that safety is very important to everyone on the highway, but over the past couple of years government regulations have reduced the amount of time household good drivers can drive and work. This has been particularly impacting to those drivers who want to work harder during the summer peak months. This has reduced their ability to earn more dollars when the business is available and continue to grow their compensation. Unfortunately this too is making life difficult for our drivers.
Where do we go from here?
There are many options on how we replace the driver/owner operator that we have grown to know as the backbone of our industry. As I reflect on these options of containerization, lease trucks, or railroad shipments, I feel that none of them will replace the current driver model that has provided outstanding service over the years to those high profile executive relocations. Many of these drivers have assisted numerous executives as they have worked their way up the ladder of their organizations.
What we know is that we must get revenues back into our industry not only to convince quality drivers to stay in our industry but also to attract more drivers, so we can again grow the ranks of our household goods drivers. We are beginning to see some companies pay incentives to the drivers for quality scores, or put a variable discount to reward drivers for outstanding service.
Although we do not have a crystal ball, we feel that in conjunction with our national accounts, our agency can continue to develop programs that will attract and retain drivers in our industry. And we will continue to pursue our never-ending goal of providing outstanding service to our customers, even as we search for solutions to the concerning driver shortage that affects our entire industry.