On top of the current shortage of truck drivers, trucking companies have something else to worry about. – Recently released reports reveal that in the month of March 2015, trucking employment declined for the first time since May 2013. The U.S Bureau of Labor Statistics reported that 6,800 jobs were shed by trucking companies in March. While this was happening, the U.S job market saw an addition of 126,000 jobs. This figure calls into question the underlying strength of the economic recovery.
The BLS has been tracking more than 100,000 motor carriers since June 2013 and since then 64,600 jobs have been created. This figure is an indication that trucking is inching closer to its pre-recession peak employment levels. However, there are certain factors interrupting the upward trajectory. These factors include a strong U.S dollar and post congestion.
The irony of this decline is that it comes in the wake of increased hiring efforts by trucking companies. In fact, companies that ship freight reported that they were paying more to hire trucks and drivers. Despite the rising wages, there still remains a shortage of 35,000 to 40,000 drivers. “We are seeing a rise in demand for freight shipping and not enough drivers,” explains founder and President of FreightRun, which provides freight quotes from top freight shipping companies across the United States.
A dip in employment is bad news for shippers who had to face this news while in the middle of a struggle to move freight inland from congested West Coast ports, and to move consumer goods to retail stores as well. Despite this, some good news is that trucking payrolls are still close to the 2007 peak levels. With the US economy expected to grow in the coming month, it is anticipated that this upward trend will be replicated in trucking employment.
Some economists project that the second quarter of the year will be more favorable, what with the post congestion clearing, the construction season approaching and warmer weather returning. However, others are not so optimistic and say that the second quarter will be characterized by slower growth.
It remains to be seen how the trucking companies will address this issue of falling employment rates. “We are seeing an uptick in shipping companies seeking a business cash advance and other working capital solutions to address their immediate hiring needs,” says Oleg Rud, President of Imperial Advance, a lending services company in New York. There is every need to ensure the truck driver shortage is mitigated, as failure to do so will impact the service delivery of the companies and lead to higher transportation rates. All these are bad for the consumer who will have to deal with higher charges when they need to transport their freight.
On top of hiring more truck drivers, trucking operators will also have to devise means of retaining their drivers, as a high turnover rate is not desirable. This will involve offering incentives and prospects that are attractive enough to ensure the drivers are not lured elsewhere, necessitating the need for constant and expensive replacement.