FedEx Freight exec Driver shortage wont spare LTL industry

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FedEx Freight exec: Driver shortage wont spare LTL industry

FedEx Freight exec: Driver shortage wont spare LTL industry

All truckers will confront a shrinking driver pool as a result of tougher safety regulations, aging driver workforce, FedEx Freight COO tells WERC.

The consensus in the trucking industry is that the less-than-truckload (LTL) segment will be able to avoid the imminent problem of finding and keeping qualified drivers. Thats because unlike long-haul truckload drivers, who can be away from their families for weeks at a time, LTL drivers, who run over shorter distances and are generally home the same or next day, achieve a better work-life balance.

A top executive of the nations largest LTL carrier may not argue with the rationale. But his comments at an industry forum last Tuesday would indicate that he would disagree with the consensus.

Patrick L. Reed, executive vice president and chief operating officer of FedEx Freight, the LTL arm of Memphis-based FedEx Corp., said all truckers will confronta shrinking driver poolas the impact of new government safety regulations and the aging of the driver workforce combine to reduce the supply of labor in the market.

Its an industrywide problem, Reed told theWarehousing Education and Research Councils (WERC) annual meeting in Atlanta.As if to reinforce his point, he added, Its going to be tough all over.

Reeds comments might seem like an overreaction considering that FedEx Freights annual driver turnover rate stands at about 7 percent, compared with the much-larger truckload industrys turnover of between 90 and 100 percent. Another factor keeping LTL turnover low is that drivers generally get paid, on average, about $10,000 a year more than their truckload counterparts.

Still, Reed said the industry at large is already having trouble finding drivers to meet present-day freight demand, not to mention enough labor to transport the higher volumes projected through the rest of the decade.

The industry currently has a shortage of about 100,000 drivers, according toNol Perry,head of consultancy Transport Fundamentals Inc. Perry said the new wave of safety regulations, such as theCSA 2010carrier performance measure and proposed changes to driver hours-of-service regulations, will require 400,000 drivers to be hired over the next five years to offset attrition from retirements as well as forced and unforced departures.

Perry expects the shortage to peak in late 2013 at 250,000 drivers.

In response to the looming shortage, Reed said, FedEx Freight plans to aggressively push its in-house training program, which began in April 2000 and has so far graduated 3,036 drivers. More than 500 are expected to graduate this year, according to Reed. Nearly three-quarters of all graduates since the programs launch are still with FedEx Freight, according to company estimates.

Steve Wutke, vice president of sales and marketing at Springfield, Mo.-based Prime Inc., a leading truckload carrier specializing in refrigerated transport, endorsed CSA 2010, the federal governments complex and controversial carrier grading system designed to force marginal or unsafe drivers off the roads. However, CSAs long-term benefits cant mask the near-term uncertainty as the trucking industry struggles to understand its workings and its impact, Wutke added.

It will be a tough journey to get to compliance, said Wutke. He also stressed the importance of truckers investing the resources to equip their rigs with electronic on-board recorders, saying its the only way for companies to ensure their drivers are complying with the federal hours-of-service rule.

On-board recorders, known in the trade asEOBRs,are capable of real-time tracking of truckers and drivers. Language mandating the use of EOBRs, which has been estimated to cost the industry about $2 billion, is included in the Senates recently passed version of legislation reauthorizing federal transport funding programs.

Critics of EOBRs, notably the trade group representing independent owner-operator drivers, said the technology is a waste of money, does little or nothing to improve safety, and is used by trucking management to harass drivers in order to squeeze more productivity out of them.

The devices only monitor truck and driver status when the wheels are moving, and dont take into account a drivers long waiting times at shipping docks prior to loading or unloading freight, according to the Owner-Operator Independent Drivers Association.

The group said electronic recorders are no more reliable than the traditional paper logbooks for tracking drivers whereabouts during their hours of service.

As the cumulative cost of higher fuel prices, asset inflation, labor shortages, and government compliance begins to course through the supply chain, truckers are bracing for an 8- to 10-percent annual increase in their fleet operating expenses for the foreseeable future. The challenge for carriers, as well as third-party logisticians, is to educate shippers on the impact of these issues and explain to them why they can no longer budget less for transportation services on a year-over-year basis.

I have customers tell me, I understand fuel [increases], but I dont understand the rest of it, said Scott McWilliams, executive chairman of OHL, a billion dollar 3PL based in Brentwood, Tenn.

Mark Solomon joinedDC VELOCITYas senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for theJournal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked forTraffic Worldfor seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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