COVID-19 has changed the way we purchase goods…what will that mean for one of the trucking industry’s biggest problems, the driver shortage?
I recently wrote an IdeaXchange blog that discussed how e-commerce is changing the way fleets choose their equipment based on load size and distance. The e-commerce trend began as people’s preference for online purchasing grew; the pandemic has exponentially increased that shift, turning purchasing online into a necessity rather than merely a preference. The effect can easily (and sadly) be seen as more and more brick-and-mortar establishments disappear.
The likelihood that things will shift back is dim. Certainly, some customers will return to in-person purchasing; a larger number will realize the convenience, selection, and ease that come with online ordering. Customers now expect quick turnaround and that has resulted in many businesses either building or expanding fulfillment centers closer to where their customers (B2C and B2B) reside. E-commerce really is about the final mile and that is changing the face of trucking.
My IdeaXchange blog deals with the way fleets need to assess their equipment needs, looking at a reliance on smaller vehicles or better yet, a mix of vehicles for long-haul, regional, and local deliveries. However, this started me thinking of other issues that may be impacted with this shift in shopping behavior and customer expectations.
Perhaps this shift to shorter deliveries may actually be a partial solution to a problem that has been plaguing our industry for years…the driver shortage. Right now, the shortage may not be as widely felt. Earlier this year, Transport Topics published on article on this topic, noting that “The often discussed driver shortage is over — at least for the time being — as a result of the COVID-19 pandemic, the deepening U.S. recession and a falloff in the amount of freight being hauled by many sectors of trucking.” Of course, as the economy began to open again, the shortage will once again be an issue.
So, how can e-commerce be a partial solution to the driver shortage if more deliveries need to be made to more locations? In the 2019 Truck Driver Shortage Analysis from the American Trucking Associations (ATA), Chief Economist and Sr. Vice President, Bob Costello noted that “When new to the industry, many drivers are assigned routes that put them on the road for extended periods of time before they return home, typically a week or two. Therefore, it is not just a career, but a lifestyle that does not fit with everyone’s desires or needs.”
This is especially true for women who are often the family caregivers and millennials who value a work/life balance more than earlier generations might have. And LTL carriers and private fleets generally have much lower turnover rates as the drivers in those sectors are home more frequently and generally paid more. In 2018, LTL carriers had a turnover rate of 11%, while private fleets reported a turnover rate of just 8% in 2014.
Since the driver shortage is felt most acutely in the over-the-road category, a drop in that area as deliveries become more ‘last-mile’ oriented may help attract candidates who have not been eager to take this on as a career in the past. Whether this is true or not, this reliance on shorter delivery routes will put the driver shortage to the test. As I noted in my IdeaXchange blog “both UPS and FedEx said they are planning huge hiring efforts in advance of the holiday buying season. UPS indicated it expects to add 100,000 seasonal workers, while FedEx is looking for an additional 70,000 people for the holiday season.”
We shall wait and see.
Read my full IdeaXchange blog.