The Guardian regales us today with yet another article about the shortage of truck drivers:
Truckers say the problem isn’t a shortage of qualified drivers; there’s plenty of people who have been through the training programs and hold a commercial driver’s license. The rot, they say, is far more systemic: low pay, long hours and an industry that treats drivers like “cannon fodder”, churning out new recruits who inevitably quit because the job is so grueling.
“There is no driver shortage; there’s a retention problem,” said Mike Doncaster, a 30-year veteran and driver trainer who parked his big rig at Joe’s Travel Plaza for the night, before heading up to Canada with another load of vegetables.
I don't doubt that long-distance trucking is a pretty crappy job these days. But are truckers really quitting at higher rates than usual? Unfortunately, that's hard to say with the data we have at hand. Here's the quit rate:
Nothing looks out of whack in the most recent months, but the data for quits uses pretty broad categories. In this case, it's all transportation, plus warehousing and utility jobs.
We also have this:
The absolute number of long-distance truckers is within a percent or two of where it was before the pandemic, and employment is rising at a rate of more than 3%.
So we have one series that shows quits, but only broadly, and another that zeroes in on long-distance drivers but only shows employment levels. If you put them together I think the obvious interpretation is that nothing new is happening right now. Quits are probably no higher than historic levels, and the number of drivers is increasing solidly. What's more, long-distance driving continues to pay about 25% better than other blue-collar jobs.
To put things simply, we don't have a trucker shortage, we have a goods surplus. In an economic sense I suppose you can say they're the same thing, but given that the goods surplus is almost certainly temporary it hardly seems likely that trucking firms want to hire a lot more permanent drivers who they won't need six months from now. They're hiring as many truckers as they think they need and they don't seem to be having a lot of trouble attracting them.
Sure, as consumer durables slow next year and ports traffic begin to relax, you will see steam come off the U.S. economy. It's why worrying about this short term stuff is silly.
I appreciate these charts. It seems to me that quit rate has been rising for some time now, and if things were rosy in that category, that shouldn't be happening. The employment level clearly dropped drastically during the pandemic and has only been recovering in the latest six months.
Still missing the extremely obvious point/cause:
Do we really think that long distance freight only increased by ~2% per year at the height of, say, Amazon? And actually declined in some years? And yet, the employment in long-distance freight trucking declined?
Sure seems like there's a shortage to me. And an intentional one, as outlined in an article that somebody linked here on the last inaccurate post about there not being a trucking shortage. There has almost certainly been an actual trucking shortage for years and years, and then with the sudden demand spike for more deliveries during COVID (some portion of which will almost certainly be permanent)... it's not intellectually honest to be looking at charts over time and saying "nothing has changed, roughly." OK, well you need to first prove that we didn't have a shortage before to be able to say "nothing has changed and therefore we don't have a shortage." If we had a shortage and nothing has changed, we still have a shortage. This is not a rocket surgery concept.
And sure, a shortage of truckers (supply) is an excess of goods (demand). Just like an excess of demand is a shortage of supply. Or an excess of supply is a shortage of demand. These are meaningless tautologies. However, by stating that there's an excess of goods, that's admitting that there's a surplus of truckers (or freight in general).
Stuff has to get distributed from the factory to you, whether it's going to Amazon warehouses or local brick-and-mortar stores, and this is done partly by truck. What has changed is inventory control. The stuff is not sitting around in store inventories, forming a buffer for demand. If demand increases, which it has done, then the extra stuff has to come through the supply chain. More truckers may be needed for the increased flow.
Saying there is an excess of goods is misleading - there are actual shortages of many things. Shortage of computer chips is at least partly responsible for the problems with cars. But of course there is an excess of goods in the container ships sitting off the ports, while there is a shortage near the consumer end. At least partly because of the just-in-time inventory control trucking must increase. Although again when trucks are sitting in long lines at the ports waiting for containers shortage of truckers is not the problem.
^^^^^^^^^^^^^^^^THIS^^^^^^^^^^^^
To make matters worse COVID took those truckers - and many of them are operating solo, out of the work force. The problem is when they stop (as required by law) many of their favorite truck stops were closed for awhile due to COVID.
The 2nd things is the sole owner or private trucker. They operated under the assumption that they could haul, make higher profits and take care of their own equipment. When supplies STOPPED arriving here the banks clamored for their truck loan payment even though THEY Weren't hauling. This put a few of THEM under.
Now we have private truckers idling for hours waiting for loads from ports that have too many containers to unload.
The KEY here is the private haulers. We need to take THEM out of the picture to see if indeed there is a trucker shortage.
They're the vast majority and whom the shippers want to use.
More goods are being delivered than ever. True shortages are pretty much limited to high end cpus and equivalents..
"There has almost certainly been an actual trucking shortage for years and years".
What is the evidence for this? If there was a shortage, why haven't wages gone up? What is certain is that the media like to publish anecdotal stories of employers complaining about how hard it is to get good help. The media are not labor-friendly.
Because trucking companies have been able to keep suppressing wages? I find it far more likely (as compared to there not being a shortage of truckers) that the scenario where trucking companies have had control over the trucking employment market for so long that wages are just what they are, and that there was actually more demand for trucking company services years and years ago. In/since the aughts, probably, for a few reasons: explosion of ecommerce in the 2010s, further calcification of the just-in-time inventory system and its spread to retail enabled by better technology, and just that we're buying more and more stuff. It's kind of silly to me that pointing out that a ~2% annual growth rate in freight employment means there's no shortage. That's barely keeping up with the economy, let alone expanding to fill the increased demand.
As others have pointed out, though - we don't _just_ have a shortage of truck drivers. We have a shortage of everything in the logistics chain, and the entities making larger profits due to this increased demand do not have any incentive to fix it - and it's an industry with a high barrier to entry in terms of capital.
Your own eyes if you open them. Next time you’re on the Interstate look at the back of every trailer you pass. If it is a company trailer it will have a “Drive for us! We pay xx cents per mile” on it. Every company owned trailer is a rolling help wanted sign. Every trucking company is hiring drivers ALWAYS.
As a driver with 5 years experience and no points on my license I could absolutely literally get over a hundred job offers in a week if I tried.
They are basically all shit jobs though. I’m looking for the exception. I hope it exists.
I like the way you call out the sloppy use of words ... good on ya, mate. One should always strive for precision, though admittedly the editing capabilities here are, um, rudimentary, and I suspect that's where most people catch their misspellings, elisions, malapropisms, etc.
"And yet, the employment in long-distance freight trucking declined?" where did you get that false fact?
Anyway, to paraphrase that article which also referenced a 20-year trucking veteran's perspective on the problem in the sector:
There is zero incentive for trucking companies to actually alleviate any shortages, because as long as they can keep wages down (which are sticky!), they can keep charging more and more because there's ever more excess demand for their service.
"My prediction is that nothing is going to change and the shipping crisis is only going to get worse. Nobody in the supply chain wants to pay to solve the problem. They literally just won’t pay to solve the problem. At the point we are at now, things are so backed up that the backups THEMSELVES are causing container companies, ports, warehouses, and trucking companies to charge massive rate increases for doing literally NOTHING. Container companies have already decreased the maximum allowable times before containers have to be back to the port, and if the congestion is so bad that you can’t get the container back into the port when it is due, the container company can charge massive late fees. The ports themselves will start charging massive storage fees for not getting containers out on time — storage charges alone can run into thousands of dollars a day. Warehouses can charge massive premiums for their services, and so can trucking companies. Chronic understaffing has led to this problem, but it is allowing these same companies to charge ten times more for regular services. Since they’re not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created. In fact, the more things are backed up, the more every point of the supply chain cashes in. There is literally NO incentive to change, even if it means consumers have to do holiday shopping in July and pay triple for shipping."
You mean the magic hand of competition is not solving this problem for us???
😉
Same for the price of gas at the pump, natural gas prices, meat prices....those markets seem to be operating as cartels right now.
Where in this case the word 'competition' is a stand-in for 'deregulation'. Red is yellow and black is white.
This guy gets it. He's telling us from the inside what the Powers that Be in Transport wants and implemented with a vengeance.
I have no idea if there is a shortage of drivers. What I do know is that we have turned lots of jobs into terrible experiences. And we’ve told the people doing these jobs that they ought not complain about working conditions or anything at all because we can always find cheaper immigrant labor to replace them or we can close the factory and get the work done cheaper somewhere else.
So suck it up. Quit complaining. Go invest in Bitcoin.
And when this whole system of crappy jobs, low pay, and just in time lean manufacturing got upended by the pandemic, there are now pretty obvious shortcomings which are affecting supply, demand, and the global supply chain.
That’s the whole story.
After inflationary spikes businesses do not lower prices on their own because consumers will keep paying more for products for a long time before demand drops. It’s a boon for business profits.
Trucking companies have no incentive to hire more since alleviating the supply issue because it will increase payrolls + lower shipping rates = lower profits.
If we want to mitigate inflation consumers should quit buying things for a while.
We appear to be really determined to insist there is no shortage in spite of all evidence showing that there is. Drum goes so far as to say that we have tens of thousands (?) fewer drivers than 2019 and more goods to be delivered...so there is clearly a shortage of drivers. However, he guesses that this goods increase is temporary and therefore we should pretend the shortage doesn't exist.
Yikes.
" Drum goes so far as to say that we have tens of thousands (?) fewer drivers" He said no such thing. In fact he said the opposite. You might want to work on your reading skills
Several commenters seem to think they are stating a fact when they say that there has been a long-time shortage of truck drivers. In doing so they are buying the media take, which is what Kevin is disputing. But if there is a long-term shortage why haven't wages gone up? Kevin does not mention this in this post, but the fact that wages have not gone up has been pointed out by Dean Baker and Paul Krugman, who are probably more authoritative than reporters who see a story in the complaints of employers. People who run port facilities, for example, would like to transfer responsibility for the hold-ups to others, and trucker shortage is one thing they can call on, although it is the truckers who are waiting in long lines to get their containers.
You have to be skeptical about economic interpretations from anyone, but reporters in the big media are among the least trustworthy.
I will only speak to the NC Ports here Skept
The crane operators are state employees. They guys handling the load below the crane are longshoreman (mostly unionized)
They "park" the containers in the yard until a truck arrives to pick up that particular container. A long shoreman puts that container on that truck using a smaller crane or lift truck.
THAT trucker is probably a private trucker.
It is very rare for a container to go from ship to trucker right out to the gate. It is usually stored on site for a day or two. OF COURSE no one wants to accept blame - the states especially. The union workers are right behind the state.
I would like to see the Less than full load truckers - the McLean Transport, Roadway express, Estes Trucking groups counted separately from the private guys. THATs where the shortages are IMHO
I'm going to believe the truck drivers who also say there's a shortage over Kevin. It's more likely that wages haven't gone up because of the exploitative nature of the trucking business vis-a-vis their employees (especially the solo contractors) to begin with.
The same dynamic appears to be at play at the ports, which have a profit incentive to not increase capacity because they can charge premiums due to the sky-high demand.
Capacity has increased at ports. it's just demand has increased more.
But that is not staying
And when a system is operating at or near capacity, being short by even a percent means it all goes out of whack…
My friends at Enron all insist that is not the case.
Sometimes finding the data set(s) Kevin is using is an easy (BLS) search. Sometimes it is not. It would be nice... if Kevin were more complete/specific in reporting his data sourcing.
But what do the disappearance & murder rates for prostitutes & runaways show?
I'm not sure why Kevin has been stuck on the no trucker shortage side of things. I'll agree that things aren't much different than before the pandemic (except higher demand), but Paul Krugman tweeted out a FRED chart on November 9th showing that truckers (and warehouse workers) only make 2/3 of what they made in the 70s. Wages have been mostly flat for 30 years.
https://twitter.com/paulkrugman/status/1458105554371493888
I've been reading for many years about how Trucking is not nearly as good a job compared to decades ago. Basically, shipping companies kept lowering what they would pay and enough people continued to be truckers to keep the economy going. Kevin is aware this can happen, but keeps saying that if there is a real shortage the pay would increase even though he knows that if shippers decide to just live with the shortages then nothing changes.
There is no law of physics that says management has to raise wages. If they just refuse to, then wages stay low.
Kevin makes the obvious mistake at the end that very few truck drivers are employed by trucking companies. Today's work force are owner-operators. Those who are actually employees are the cream of the crop.
Citation needed. Seriously, I’m not saying you are wrong, just that that is not my observation. Has the percentage of Owner Operators gone up or down over the past 30 years, and what is that percentage?
Company drivers certainly aren’t “the cream of the crop” in my experience. I mean, I’m one.
We;;. ya' see, it Biden's approval ratings that are causing this perception.
😉
I love this idea. If we just stop testing the public on how much they like Biden, then - how should I put this... it would inoculate the public against negative thoughts.
Damn I wish Kevin would provide detailed descriptions of his data series. Just eyeballing, the ‘change in employment level’ graph looks like it is monthly data, but is either year-over-year, or annualized-month-over-month.
Some comments imply a constant relationship between quantity of goods shipped and number of drivers. There is not, due to
- competition from rail and air transport
- changes in use of larger and tandem trailers
- changes in regulations and work rules: IIRC, the previous administration allowed longer hours on the road
- change in the proportion of LTL (less-than-truckload) shipping, which is less efficient because vehicles spend more time loading and unloading, and traveling between stops.
Online sales come at least in part at the expense of brick-and-mortar; that part only changes the destination, not quantity.