Management & Operations

Driver shortage a challenge for all transportation industries

Posted on January 23, 2020 by James Blue, Publisher

The driver shortage is not exclusive to motorcoach and public transit, it impacts all industries that require drivers.
Brio Yiapan
The driver shortage is not exclusive to motorcoach and public transit, it impacts all industries that require drivers. Brio Yiapan

In this issue, we discuss how driver retention and hiring issues are challenging the motorcoach industry, which we cite in our annual Motorcoach Survey. In fact, it is a challenge shared by all surface transportation organizations, ranging from public transportation to delivery and long-haul trucking to even shuttle bus operations. The causes, as we note in the article, are more than driver pay and working conditions. Yet something else is also going on, and everyone in the industry must have a stake in the solution.

Caught between costs and wages
Anyone who has ever taken an economics class in high school or college knows one aspect of this problem; in the textbooks it’s called “cost-push inflation.” The wage pressures to attract and retain drivers are driving up costs, which can only be relieved if the market tolerates price increases. A major factor is heavy competition for drivers. A recent study of long-haul trucking companies by the U.S. Bureau of Labor Statistics found that for the past two decades, the annual turnover rate averaged 94% among larger carriers and 79% among small firms.

This situation is compounded by the competition for similarly qualified drivers across the many industries that use them, ranging from trucking to school bus fleets to transit to motorcoach companies. The result has been a price war and the turnover problem mentioned earlier. The competition is further exacerbated by growth of these positions, coming from traditional companies as well as new players with deep pockets like Amazon.

More than a supply problem
While wages keep going up to attract drivers, there also seems to be more going on. One factor is that the commercial driver supply is affected by a growing labor shortage in the whole economy. Job openings nationally now exceed those seeking jobs by two million, thanks to the good economy, according to the U.S. Department of Labor. Yet it will get worse as baby boomers retire, unless Generation Z, the grandchildren of boomers, suddenly finds a passion for bus and truck driving.

Some argue this will simply accelerate development of fully driverless vehicles. However, the most optimistic scenarios do not see a transition before the late 2020s at the earliest. The real answer, at least in the short-term, is that industry associations are helping members in reaching out to non-traditional parts of the population, and yes, increasing wages, benefits and flexible work hours, and improving other conditions even further. Free CDL driver training is the response of many operators, for example.

The coach industry has been very good at responding to new conditions before and is probably doing things we haven’t even heard of — but would like to. Drop us an email and we’ll share it with your peers.

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