US truck driver shortage decreasing, but market still held back
Logistics professionals are returning to business. Truck drivers who went their separate ways during the pandemic are rejoining transport companies and operations personnel are applying to freight forwarders. The labour shortage that has hampered many businesses in recent years is easing as the market is experiencing a slow upturn. The shortage of truck drivers, at the time what was considered one of the biggest bottlenecks in logistics, has abated. The American Trucking Associations estimates that the US trucking industry was short 78,000 drivers last year, down from a record 80,000 in 2021.
In 2021, the pool of drivers employed by transportation companies shrank as high freight prices encouraged many drivers to go into business for themselves. Slowing volume in the second half of 2022, combined with rising fuel and other costs, forced a growing number of those entrepreneurs to look for work again. A survey published in November by the Professional Driver Agency, in collaboration with recruitment specialist Conversion Interactive, found that 22.1% of drivers had reduced their mileage in the past six to 12 months as a result of lower freight volumes, while another 27.2% reported fluctuations in their mileage and another 5.5% reduced their mileage for reasons other than lower volume.
And now freight forwarders are also experiencing an upturn in the number of job applications. “People are knocking on doors again,” says Helmuth Berchtold, head of the US branch of logistics recruitment specialist adi Consult. For the past two years, he found it difficult to introduce suitable candidates to corporate clients, but now he has candidates available – although highly qualified salespeople remain hard to find, he added. The speed at which the market changed from brisk demand to a drastic slowdown has changed the employment outlook almost overnight. After Amazon confirmed in November that it would lay off 10,000 workers – about 3% of its clerks in business and technology functions – and FedEx Freight offered drivers a $300-a-week incentive to accept leave from early December to March, Walmart, for example, laid off 1,500 workers at a distribution centre near Atlanta in December.
As their margins shrink, logistics companies must adjust their pay structures for new entrants – ironically at a time when inflation is eroding earnings. This is especially challenging for highly qualified sales staff, who are still hard to find. The base salary required in this category is between $125,000 and $130,000, with the best professionals asking $150,000 before commission, Mr Berchtold said. “It used to be around $75,000, before the pandemic,” he said. The rise in salaries over the past two years was relatively easy for freight forwarders to absorb while freight rates were at stratospheric levels. Now that margins are shrinking, these wage levels are unsustainable, he said. Meanwhile, companies offering career paths are becoming more attractive again. Before the pandemic, everyone was looking for courses that would help employees develop their skills, but in the Covid era, the focus shifted to a “come-and-go” approach, Berchtold said. They said, “I want $20,000 more. I don’t want to work in an office”.