The Miracle Mile in Carlisle, Pennsylvania, is a vital capillary in the US freight transport system. Linking interstate highway 81 to the Pennsylvania Turnpike, the road is just an overnight drive away from half the country’s population. Thousands of trucks shuttle along it daily carrying everything from lumber to fizzy drinks.
Their drivers are well served. Three truck stops offer showers, burgers, video games and diesel fuel. Stores sell tail lights and hub caps. The lonely can visit the Carlisle Truck Stop Ministry, its biblical tracts stacked in a white metal trailer, or a pornography emporium called Mature Fantasy in a red building behind a stockade fence.
These days the mile also acts as a recruitment ground for desperate employers seeking new talent. The magazine rack inside the Petro truck stop is piled with brochures listing scores of openings for people with commercial driver’s licences. Roadside signs plead for applicants outside the offices of Knight Transportation, Keen Transport and ABF Freight. At the Flying J truck stop, driver Alvin Perry, taking a break before continuing his journey to North Carolina, says he has been poached four times in two years. “People change jobs all the time,” he says with a grin. “I just changed this week.”
If the US economy — growing at about 2 per cent a year — is approaching maximum velocity, the trucking industry is a force governing its speed. Trucks move 70 per cent of goods in the country by tonnage, but fleets are nearing full capacity. The constraint is not equipment; it is a lack of drivers.
Autonomous vehicles may one day rule the roads, but in 2018 every truck still requires at least one human in the cab. With the US unemployment rate at 4 per cent many workers have the option of a different livelihood and carriers report a shortfall of 51,000 drivers.
The effects are rippling through the supply chain. Consumer and food companies ranging from Kraft Heinz and 3M to Coca-Cola and Procter & Gamble have identified rising freight costs as a drain on business, and some are raising consumer prices to compensate. General Mills last month partly blamed rising transport costs for 625 redundancies it will make this year. Energy companies in Texas complain that difficulties in finding truckers are creating an obstacle to drilling for and marketing crude oil.
“Transportation clearly is a big inhibitor to the expansion of the US economy,” says Tim Fiore of the Institute for Supply Management, a research group. “There is no short-term end in sight because driver labour is hard to find.”
The tightness in the trucking market is attracting scrutiny as the economy shows flickers of inflationary pressures. The national average rate for hiring a “dry van” box trailer increased 30 per cent in the year to June to $2.32 per mile, the highest on record, according to DAT Solutions, an online trucking service. The Federal Reserve’s latest snapshot of regional economies lists truck driving as first among the jobs facing worker shortages. One North Carolina trucking company quadrupled rates in an attempt to curtail demand, “but found that some customers were willing to pay the new rates”, the Fed reported.
It represents a remarkable turnround from 2015 when carriers bemoaned a “freight recession”. In the first five months of 2018, truck tonnage has raced 8 per cent higher year on year, according to the American Trucking Associations. Shares in listed trucking companies have risen twice as fast as the wider US stock market in the past year.
Wages are also pushing upward after years of lagging behind inflation. Between December and June, median per-mile pay increased 8.2 per cent to 39.8 cents, according to the National Transportation Institute, a data group.
Jumping ship can be lucrative. In February US Xpress, a carrier based in Chattanooga, Tennessee, announced that $50,000 bonuses and four weeks of holiday awaited two-driver teams. The median salary for drivers hauling fully loaded trucks on irregular routes across the US was $53,000, an ATA survey showed, relatively good pay for a job that does not require a university degree.
The offers have led to plenty of job-hopping — employee turnover was 94 per cent among large truckload carriers in the first quarter, ATA says — but little recruitment from outside the industry. The 1.29m truck drivers identified by the Bureau of Labor Statistics in May was up 15,000 from April but still fewer than the number in the summer of 2015. The retail trade, a sector perceived as dying, has added more than 300,000 positions in the same period.
“I don’t really see any solution to the driver problem, unless the economy slows and the unemployment rate rises,” John Steele, chief financial officer of Werner Enterprises, a Denver-based carrier, told a conference in June.
Trucking has actually fallen as a share of total US employment, says Rob Martin, economist at UBS. He says that while the tight market has raised freight costs for shippers, competition between online and traditional retailers has so far kept a lid on consumer prices.
Driving a truck across America has never been an easy job. Spending weeks on the road can be solitary, dull and, federal statistics show, more likely fatal than service as a police officer. Sleep often comes in the bunk of a cab bathed in the fumes of other idling vehicles.
It is not the first time drivers have been scarce. In 1999, at the height of the dotcom bubble, the Financial Times reported an “acute” shortage during the festive season rush. The squeeze reappeared during the housing bubble of the early 2000s.
But this is different, industry veterans warn. “It’s probably the tightest driver environment that I’ve seen,” says Eric Fuller, US Xpress chief executive.
Not just anyone can walk in to a job. Big-rig drivers need to first earn a Class A commercial driver’s licence after a training course that can take six weeks and cost several thousand dollars. To cross state lines a driver must be at least 21 years old, putting long-haul routes off limits to recent school graduates and dropouts as they start their careers.
New drivers must also pass drug tests, a significant hurdle as companies dip deeper into the labour pool. Carriers are increasingly testing hair follicles as well as urine, enabling detection of substances used months earlier. This makes it harder for those who are only recently drug-free. JB Hunt, a large national carrier, recorded 1,213 job applicants who tested positive for drugs using the hair test in 2017, according to Trucking Alliance, an industry group. Nine out of 10 of them had passed urinalysis.
John Snyder admits the career is not for everyone. In his 42 years on the road he has driven millions of miles through 46 US states. He was often out of town during his family’s Thanksgiving and Christmas holidays. “I missed both my kids’ graduations,” he says over a late lunch of ketchup-covered eggs and coffee at a Denny’s restaurant.
His children are now in their 30s. Neither drives a truck. Mr Snyder is on his third marriage. “It’s a good living, but it’s a rough life. It takes a great deal of personal sacrifice and commitment to do the job. That’s why there’s a shortage,” he says.
Observers say the trucking shortage reflects a loss of union representation across much of the industry, irregular pay often based on miles driven and the results of inflated promises to recruits. The male-dominated and peripatetic nature of the industry has made it difficult to attract women. Only 4 per cent of drivers are aged under 25, according to ATA, suggesting the industry is struggling to lure younger workers who have plenty of options in construction, energy and other blue-collar sectors.
The country music star George Strait recorded a tribute to long-haul truckers. “Freedom’s your best friend,” he sang to them, calling drivers “brothers of the highway, children of the wind”.
If freedom was ever a selling point, it is gone now. Truckers describe a life of increasing surveillance. The most recent constraint came in April when a grace period ended for enforcing the use of electronic logging devices, or ELDs. The gadgets track whether drivers are following a daily limit of 14 hours on duty, including a maximum of 11 behind the wheel, removing the opportunity to cheat — and make more money — with the use of paper logs.
ELDs may make highways safer. But they have also effectively removed truck capacity just as the strong economy demanded more cargo loads. In the first quarter, enforcement of the rule created demand for another 80,000 drivers, above and beyond that from the strong freight market, says Noel Perry, a consultant with Transport Futures.
Veteran drivers such as Ted Hendrickson believe the devices impinge on his liberty. “ELDs seem to think they know when I’m tired,” says the 66-year-old driver from Texas, smoking a cigarette during his 10-hour break.
Dante Staciokas, a driver relations manager for a Pennsylvania-based carrier, says the job began to change in the 1980s, when the industry was deregulated. As carriers competed on price and sharpened their focus on costs a “meat in the seat” mentality took hold, he says.
“Driving a truck went from being a profession in which to aspire to one of the most stressful occupations in the country. Truckers found their jobs had become very much like that of the products they hauled: a disposable commodity,” says Mr Staciokas.
Truck customers, known as shippers, no longer have the whip hand. The ratio of loads requiring transport to available truck vans has surged 80 per cent in the past year to 10 to one, according to DAT Solutions. Shippers must now pay higher rates for prompt service.
Even then, there is no guarantee a truck will arrive. “There is freight for which we can’t take a big enough rate increase to deal with the inefficiencies that our drivers experience. So we just say that’s business we’re not doing,” Chris Lofgren, chief executive of Schneider National, a leading carrier, told a New York conference.
Warehouses are putting on a beauty pageant in the hope of building a reputation as a “shipper of choice”, says Josh Brogan of AT Kearney, a consultancy. This means quicker loading times, cutting penalties for tardy truckers and treating drivers with respect.
24 hours in the life of a driver
Among the thousands of small-time owner-operators driving their own vehicles. Monte Wiederhold pulls a flatbed trailer with a Western Star tractor built in 2000. This is a snapshot of his schedule . . .
Thursday, June 29: 8:45am
Load skidded steel coils in Franklin, Ohio. Had planned to make the pick-up the night before but the air conditioning in the cab died. Had to install a new compressor which took time.
12:30pm
Deliver coils to customer in Brownstown, Indiana. Drive empty to Jeffersonville, Indiana.
2-2:30pm
Take mandatory rest in Jeffersonville and pick up a 41,000lb steel coil.
2:30pm
Drive through severe thunderstorms with tornado warnings 270 miles west to Granite City, Illinois.
6:45pm
Deliver coil to a paint shop in Granite City. Reverse course and go 25 miles east to Eddie’s Travel Center truck stop in Mascoutah, Illinois. Order strip steak and baked potato as reward for a hard day’s work and sleep in the 48-inch-wide bunk of his cab.
Friday, June 30: 6am
Wake and drive to Princeton, Indiana to pick up three defective steel coils rejected by a Toyota factory. Return coils to customer in Franklin and go home.
Miles driven
894
Earnings
$2,700
Costs
Average out at about $1 per mile so around $900, of which fuel would account for almost $500
A bad warehouse reputation travels fast. “This is the closest to hell that you’ll ever be,” a driver warned in an online review of an Atlanta supermarket distribution centre. “The employees are rude, there’s no parking, it takes hours to unload, full of hookers, scam artists, crooked cops, and the only thing missing is Dolores Umbridge [from Harry Potter] with her pink bow. Avoid coming here at all costs.”
America’s loading docks may become further strained as retailers stock up for the winter holiday shopping season. Mike Regan, whose consultancy TranzAct Technologies advises shippers on logistics, warns it will last well into 2019. “Call it the freight-pocalypse,” Mr Regan says. “It’s not going to change any time soon.”
Automation: Driverless vehicles to end shortages but cost jobs
Autonomous vehicles could eliminate as many as three in five heavy and tractor-trailer truck driver jobs starting in 2030, according to research from Securing America’s Future Energy, a Washington-based advocacy group that backs the technology. If that proves to be the case it will turn a shortage into a glut and leave Silicon Valley and Washington grappling with the social costs and benefits.
Stefan Seltz-Axmacher, chief executive of Starsky Robotics, is developing trucks that drive themselves along intercity highways and operate by remote control. He calls the process of filling cabs a chronic problem for the sector. “You can’t solve that problem if you still need a person in a truck,” he says. “We’re making trucks that operate without people.”
McKinsey, the consultancy, estimates that self-driving vehicles could eventually reduce trucking labour costs by as much as 90 per cent. Carriers may use the threat of an automated future as a “hammer” to suppress driver wages, warns Sam Loesche, legislative representative at the Teamsters union.
In June companies including Daimler, FedEx and Uber launched a lobbying group, the Partnership for Transportation Innovation and Opportunity, to address AVs and jobs. And Eddie Bernice Johnson, a Texas congresswoman, introduced a bill to fund the retraining of workers displaced by self-driving vehicles in a sign of the growing concern.
“The issue is not if new jobs will arise eventually in the wake of AV displacements (they most certainly will),” says the Safe survey. “But whether AV adoption will impose very high costs on displaced workers, their families and communities.”
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