How Real is the US Truck Driver Shortage? (Steve Viscelli, Political Sociologist, University of Pennsylvania)

00:00:01: Hello and welcome to another episode of the logistics tribe I'm boss felgendreher founder of the logistics tribe and today we will shed a light on the truck driver shortage in the United States

00:00:15: truck drivers on short supply in many parts of the world but there are key differences between truck transportation in the u.s. versus in Europe for example.

00:00:24: Our Guest today is Steve viscelli who is a leading research on expert on the topic.

00:00:28: He's a political sociologist at the University of Pennsylvania where he studies Freight transportation and autonomous trucks,

00:00:34: he's also the author of the book The Big Rig Trucking and the decline of the American dream

00:00:39: and which he explains how Long Haul Trucking went from being one of the best Blue Collar jobs in the US to one of the toughest I first learned about Steve and his work when he appeared on the next frequent podcast

00:00:50: one of the most successful podcast in the US

00:00:52: and a personal favorite of mine today Steve go super deep into the problems and issues of the American Truck Driving industry with our host Jonah McIntyre

00:01:00: I mean I can't tell you how much I learned from this conversation very much an eye-opener for me and I hope it will be for you as well before we get started a quick message from or great supporters a gray orange,

00:01:11: great orange and the German Logistics a Association bvl will host a webinar together with the Danish home where retailer you ask.

00:01:19: On the topic of the webinar will be how flexible automation helped just cope with the unexpected Peaks during the pandemic and support their e-commerce growth it will feature the global head of logistics development controlling at your desk.

00:01:33: And the whole thing will be moderated by me,

00:01:35: so I'm really looking forward to that the date is February 24th from 11 a.m. to noon CET so if you're interested I will leave a link in the show notes I hope to see you there all right and now on to the show

00:01:49: Steve thanks so much for joining us we've been really excited to have you on the podcast and I for one really enjoy your book in the past I've enjoyed reading also some of,

00:02:01: some comments from my team after they read the book.

00:02:04: And have listened to your earlier podcasts and other forums so let's jump into it there's this narrative out there that,

00:02:11: we're all Hearing in the industry that says there's a driver shortage group soil throughout numbers like 80,000 driver shortage right now in in the US and we need to recruit a million or something more drivers by the end of the decade,

00:02:25: similar figures also floated in Europe's it's not just a US issue.

00:02:31: And often it's tied to also the driver average age being quite high that these drivers are close to retirement.

00:02:38: Whatever else we say about the current count that it's going to get even worse so,

00:02:43: I guess the question to you is what about that is correct you know as an expert in this field and what is misleading about that narrative so what's correct about that narrative is that we do have a number of very serious issues.

00:02:57: Affecting the future Supply and current supplies.

00:03:00: Of truck drivers that we need to address and that policy has a big role to play in solving that problem but it also has.

00:03:10: Played a large role in causing it.

00:03:13: We're not actually short truck drivers or people who are interested in doing that job in fact we have a significant surplus of.

00:03:22: People who have been trained and are currently licensed to do it.

00:03:26: So the idea that we don't have enough people willing to stay in the Jobs is.

00:03:33: But we don't have a shortage of truck drivers in the United States,

00:03:38: for instance we've got about 10 million people who currently hold a commercial driver's license meaning they could they could start driving a vehicle tomorrow.

00:03:50: We have about 3.5 million jobs that require that license if we look at State numbers for instance the state of California.

00:03:59: We see almost exactly that 3 to 1 ratio again of the number of people licensed to do the job.

00:04:08: Compared to the number of jobs that require it so this is clearly not a matter of you know finding more people and training them to do the job.

00:04:17: It's about the retention of the people who have to train to do it and just one important point before we move on.

00:04:25: The fact that we have that many people licensed is no small matter.

00:04:30: This is a job that you have to take several months at least to get that license this is you know this isn't going down the street and finding a part-time job too.

00:04:39: You know make ends meet for a few weeks this is a real serious career choice that people make you know leaving another job maybe they're unemployed but they say hey I'm interested in becoming a truck driver this looks good to me,

00:04:52: I'm going to put in a couple months it takes to get trained so the fact that we have.

00:04:57: You know millions and millions of people sitting on the sidelines is a fact that we we just can't ignore when we talk about this idea of a truck driver shortage

00:05:05: yeah I think you've done this elsewhere is to describe this as is not a another problem getting people into the profession it's about retention within the profession

00:05:15: and it's interesting because if you think about parallels where other trades or other professions,

00:05:21: are described as being short so for example a doctor shortage or a nurse shortage.

00:05:26: Those are not quite the same you know it's sort of not the right pattern actually to apply here because it's not like we have.

00:05:34: A lot of doctors who go through their training become certified and then in the leave the profession of their own volition.

00:05:41: Whereas in this case it's people who you know as you described him.

00:05:46: Done significant training and in the u.s. it's it significant cost Europe it's not so much born by the individual drivers but in u.s. it is right.

00:05:56: That's right so there are any number of commitments that people make when they when they get into the industry.

00:06:04: So if you were to go right now and I would encourage your listeners now or after the podcast to go to Google and type in you know truck driver training.

00:06:13: And they're going to get dozens of ads that you know for free truck driver training most of them come with some sort of commitment to repay that training.

00:06:23: And I often liken it to debt peonage it really is a form of debt peonage where you say to me,

00:06:32: you know Steve you want to get trained as a truck driver fine we'll do it for free but if you don't work for us for a year you owe us you know eight thousand dollars.

00:06:42: When you get into the actual agreement oftentimes they the interest rates charge can be as high as the state might allow on that eight thousand dollars.

00:06:51: And the you know for a lot of workers who are getting into the industry because of financial concerns because they you know are short income or they want to increase their income.

00:07:02: That debt is a significant motivator to keep them in that job so I meet drivers all the time who would like to move on.

00:07:12: From that initial job but can't because of that that training debt and you know that really is what you know the definition of debt peonage is that you need to keep working for someone because you can't afford to pay off the debts that you owe them.

00:07:26: The other part of it is is really a public subsidy so we have all kinds of training grants at least in the United States.

00:07:35: That you can use to become trained as a truck driver so it might be the GI bill it might be a Workforce opportunity and Innovation training Grant it might be for a trade affected workers.

00:07:48: For some of those grants that's the only time you get to use that money so for for Veterans for instance.

00:07:54: You know they make it one shot at that at that training fund for their transition out of military service,

00:08:02: and so there's a significant cost that can be imposed in terms of trying out this job.

00:08:07: That you only get one shot at those those training grants the other big issue is oftentimes drivers who have no real knowledge or experience in the industry.

00:08:17: Are convinced to Lisa truck right out of truck driver school.

00:08:22: And that that's a big one you know and oftentimes that's you know will let you out of the training Grant,

00:08:27: sort of offer you know we'll let you out of the training cost for a dollar if you agree to lease a truck from us and become you know yeah and a contract so big it actually becomes bigger the the debt load it's a kind of a trade of,

00:08:42: of One debt load which you you could get out of in a year to another debt load which you may never ever get out of,

00:08:50: yeah that one can be really a heavy burden so you know these trucks can cost upwards of 150 thousand dollars and I should be clear and it's not the truck it's just the tractor right you're not actually getting the trailer,

00:09:01: and sometimes their you know their four-year agreements that that workers are signing to you know to do that job.

00:09:07: So let's just just to do the kind of long-form thinking here let's try to pick this apart.

00:09:13: Do are these people going out of the profession to get better paying jobs because I what I want to sort of with you I went to think through this and try to exclude what might be rational reasons why this is not a retention problem because,

00:09:25: a lot of us worked at for example in lower-paying work McDonald's or something but then we move on to higher-paying work.

00:09:32: And that's not the kind of retention we want to promote right we want to promote people moving up in in skill and compensation.

00:09:39: Are these people moving on to better jobs these these other qualified drivers so the it's this is really difficult research to do right because you're trying to find the people who've left the industry.

00:09:51: Which means that we need to have a representative sample of the National Labor Market for the u.s.

00:10:00: And find those people who are former truck drivers and then you know where they end up.

00:10:05: So the number one place that people end up after leaving the trucking industry by far is unemployment.

00:10:13: So they are they're leaving the the single most common case would be someone who says I just can't do this job anymore it's not worth it and they don't actually have a better Prospect out there.

00:10:27: The industry is part of this driver shortage narrative has for decades portrayed itself as,

00:10:35: in this kind of cage match with other you know good blue-collar jobs where you have workers who would become Carpenters or,

00:10:43: plumbers or something like that and and historically that was more the case construction and other good blue-collar jobs were,

00:10:52: were a competitor and they still are in some you know there is a portion of course of,

00:10:57: of the labor force that moves back and forth seasonally between jobs like construction or Trucking depending on you know where the work is and where the pay is better.

00:11:06: But for the most part today Trucking is pulling workers from all kinds of Industries.

00:11:12: Some of them are losing jobs to manufacturing or automation some are looking to make more money you know they're coming out of.

00:11:20: Out of service work and so we see a broad mix of folks who are coming in and and going out of the industry at any given year.

00:11:30: Mmm so so that I should say and that that part of the of the narrative that it's in,

00:11:38: you know competition with construction and other blue-collar trades is one of the justifications for this under 21 truck driver training program that we have,

00:11:46: and one of the things that one of the arguments that the industry used was that you know they're losing people,

00:11:52: who are getting captured by other other Industries at 18 years old to come out of high school they're looking for a good blue collar job and trucking can't get them,

00:12:01: and so you know they're losing them to other other places we really see no evidence that that's the case most people don't join the the most likely time for people to join the trucking industry is in their mid-30s it's typically a second or third job for folks,

00:12:16: 18 19 20 year olds are not clamoring to get in the truck and spend you know weeks or months at a time driving around the country not seeing their friends not you know being being social and doing all the things that,

00:12:27: you know Folks at that at that age really like to do so,

00:12:31: that was one of the main justifications for this under 21 truck driver program that's passed in the US and unfortunately there's really no evidence for that it's it is fascinating that that also,

00:12:43: would be justification for change that rules but the first thing that goes through my mind be interested to hear your feedback guys,

00:12:49: first thing go through my mind is is it improving the quality of life or the expected earning potential and quality of life of that age group because.

00:12:59: While the industry might have go back to sort of the debt peonage example the employer yes they want new workers but it doesn't mean that the workers want that job and,

00:13:10: moving to a younger age bracket in this case almost by definition means you're getting to people who are.

00:13:17: Less prepared to evaluate the the trade-offs of the debt the cost that they'll be.

00:13:23: Incurring and I'm not sure if it's something that age group needs is that a is that a group that's really hurting for this kind of work so the,

00:13:32: the short answer to whether or not the.

00:13:36: Under 21 program is a good ideas is no it's a terrible idea I don't think that this is I don't think that this is this is good for for workers

00:13:48: of any kind in the in the who are interested in the industry whether they're older or younger,

00:13:53: it's going to put more downward pressure on the wages of older drivers it's going.

00:13:58: Foster the continuation of this system of high turnover cheap cheap labor training models that we see,

00:14:08: throughout the segments of the industry that are really pushing for this and no it's not a good way for young drivers to enter the industry,

00:14:19: they've labeled this in apprenticeship now the Department of Labor it's important to distinguish I think in the in the current,

00:14:25: Biden Harris Trucking plan there are a number of initiatives that are coming from the administration and there's some that are congressionally mandated.

00:14:34: This is a under-21 program was part of the infrastructure bill it's a it's a demand that the industry big employers and Industry have had for some time that,

00:14:47: is has been called an apprenticeship.

00:14:49: The Department of Labor actually has a registered apprenticeship program which looks which has real apprenticeships and and what a real apprenticeship is and I'm sure this will be very clear to your listeners,

00:15:00: once you hear it,

00:15:01: you know you start small and you work your way up right so and in the trucking equivalent is you know you start on the dock you start you know with a forklift,

00:15:10: you know small truck and you and and local driving and then you work your way up to the big truck and and the long hauls,

00:15:17: so this under-21 program is going to be essentially the same training model that you see.

00:15:25: In companies for those over 21 which is you throw people into the truck with a trainer they effectively work as a driving team.

00:15:35: Hey where they take turns driving and it's really just a cheap way to move move Freight so they'll you know they'll spend you know six or eight weeks or however long it takes them to fulfill the hours requirement which is roughly,

00:15:48: you know what it takes to train a new driver now.

00:15:50: But we're starting those people in the in the toughest most dangerous you know jobs were you know throwing them into the deep end as I like to say this is not that's the opposite of what an apprenticeship does an apprenticeship,

00:16:04: is a slow steady you know career path that you know is designed to create a good start.

00:16:13: To that career for the worker right it did establish a long-term relationship between the worker and the employer and the worker,

00:16:21: and the industry this has none of those those components so no I don't,

00:16:26: this is not going to be a good way for for drivers to enter the young drivers to enter the industry of the typical worker in these in these programs will last somewhere between three to six months before they quit the industry entirely well,

00:16:38: maybe on that on that longevity of tenure you could help,

00:16:44: interpret this weather things that I think we hear is that many of the drivers are older they're nearing retirement I guess when I as an outsider well Insider in the industry but there's an outsider to this exact problem.

00:16:58: Two things go through my mind is first I wonder about the Baseline the economy in general is is gray right this is not a.

00:17:07: This is a demographic transition not a sector sectoral Trend transition and then the so I'd be interested to hear if it's more and then the second is.

00:17:17: Is this sort of that's an outcome what's the driving force for the average age you know moving up is it where they can't backfill with younger workers.

00:17:29: Is it they fill as many but they you know they bounce out of the profession.

00:17:34: Kind of is it older workers and other sectors like leave but in the sector they get stuck and they stay stay so what's going on it's a couple of factors yes the,

00:17:47: the trucking labor force is older than the labor force overall in the US this is.

00:17:56: Often portrayed as you know sort of a you know consequence of or justification rather for.

00:18:03: For attracting new labor into the industry but it's actually an outcome.

00:18:09: Right not a cause of the driver shortage so the the it's and it's the outcome of this High churn model that is just chewing up the younger cohorts,

00:18:20: so when you when you go and look at the different segments of the trucking industry what you see is that there are still a lot of good jobs out there and we I guess I should have said that,

00:18:31: you know right off the bat there are some excellent trucking jobs out there,

00:18:35: in less than truckload in parcel in a lot of private fleets those drivers as drivers have historically done in the industry they get into those jobs and they stay in,

00:18:47: you know you have you know single digit turnover in a lot of those,

00:18:53: and other well compensate their better compensated roles II mean I know from my own experience that people like a UPS driver of FedEx driver or a private fleet driver Walmart for example,

00:19:07: these are better paid roles for the for similar skill set in terms of driving as as for example a for hire.

00:19:17: Small you know working for a small operator or even a larger operator driver,

00:19:23: yeah so those drivers the kind you just mentioned in those good jobs will easily make twice what a driver in these high turnover segments will make,

00:19:33: and you know for the most part their home every night yeah and they're actually following the rules so they're they're they're legitimately working only 50 or 60 hours a week that that's log for hours of service,

00:19:46: in the high turnover segments you to workers are you know they what they should be logging,

00:19:51: four hours of service you know easily equals 90 or more hours per week and many of these operations.

00:20:00: And they're living out of the truck for weeks at a time,

00:20:02: and they're making half or less of what those more experienced drivers make so you know it's not surprising that we should have you know such high turnover given those,

00:20:13: circumstances and so it's you know that's what's causing this this demo that's a big factor in this demographic picture that we have because.

00:20:22: Those older drivers they been there in those good jobs for a long time that's you know that's our stable cohort of,

00:20:29: you know roughly two-thirds of the workforce and then that other third,

00:20:35: is turning over very very quickly and again the most likely time for people to enter the industry is around 30 in their mid-30s you know it's a second third career so it is naturally,

00:20:47: and and older career as well so you know why is that people you know go into something else they lose a job that you know their kids are out of the house,

00:20:56: oftentimes you know they've had that blue collar job but they can't do it any longer because of you know physical minor physical disability you know you just can't,

00:21:06: you know Bend and use their hands to you know to do that manually in the cold and stuff yeah absolutely,

00:21:12: so it's naturally an older older Workforce so I kind of went a segue for the latter half of this I went talk about what might be solutions to this and I think that there's a solution that you and I would both agree on that's that it's the solution you have when you have a high turn.

00:21:28: Industry is you roll as you you compensate it better and you give it better working conditions that it really is potentially that simple right,

00:21:37: so we have I think first we have to identify the root causes here right the the working conditions and and the compensation are clearly deep the immediate.

00:21:51: But we've had this problem for more than four decades the American Trucking associations that.

00:21:59: Puts out that 80,000 driver number currently another shortage and you know we should talk a bit about that that you know there's no.

00:22:07: That's not a real you know number that comes out of a clear methodology for for determining shortage which would be one of the hardest you know kind of studies to design like how do you how do you know how many people would be hired.

00:22:20: Right you have to figure out you have to make assumptions about the wage rates Etc so,

00:22:25: for all intents and purposes as a research number that 80,000 is just a made-up.

00:22:32: It's yeah it's just I don't I don't know see how they get together at the 80 and open up a,

00:22:38: you know a bottle of bourbon or something and my God what do you think we should we do you think we should make the number this year well we know that good yeah yeah thanks things are getting worse and we gotta raise it but how much do we raise a 10% 20% you know I don't know maybe they throw a dice.

00:22:54: So so they're the first analysis of the trucking truck driver shortage that the American Trucking associations put out was in 1987.

00:23:05: And they've essentially issued a report like that.

00:23:09: Every non recessionary year for the last 15 or 20 years pretty consistently and it's the same it's the same report they put out you know.

00:23:17: Saying 8000 this year you know it was 60,000 a few years ago you know but it's the same report recycled over and over again with with no real methodology behind it.

00:23:29: So the problem does go back to 1980 and that and the deregulation of the industry and I think it's really important,

00:23:37: you know that we never lose sight of the fact that this is a policy failure this is this is a failure of Regulation.

00:23:45: So we D deregulated the industry in terms of the economics and then we started to you know re-regulate it in.

00:23:55: In subsequent years because of the consequences of having virtually no appropriate regulation to.

00:24:03: Yeah a lid on the number of work hours and had other issues in the in the industry so you know whatever we do.

00:24:12: Has to recognize the fact that these actors you know that the carrier's the employers,

00:24:17: you know they're not doing this because they're you know bad people they're doing it because they they are competing in a market in which.

00:24:26: The cheapest labor and the most flexible labor is what's going to give you the lowest rates and allow you to get those customers.

00:24:35: And so we really have two sets of problems we have a set of problems that have to do with.

00:24:42: Working conditions wages and working conditions and then we have a training pipeline problem those two sets of problems are deeply intertwined,

00:24:52: so on the work side we have a large number of hours that drivers are working unpaid

00:25:00: are sitting unpaid you know this has to do with independent Contracting whether paying for the truck right it has to do with the paper Mi system that's used to pay drivers and so the inefficiency of,

00:25:14: driver sitting around you know at Doc's waiting to load is the cost of that are borne by the driver and so they're not priced,

00:25:22: adequately by the company's right I mean so somebody's time is free you're not going to have as much incentive to use it efficiently and so we have a whole number of policies around compensation and hours of service on that job quality side.

00:25:36: But because those companies that have those problems have high turnover,

00:25:42: they also have the strongest incentive to recruit and train new truck drivers,

00:25:47: and so the vast majority of our new truck drivers are coming in through that segment that has those problems.

00:25:54: And so and and we're subsidizing all that so you know they're not paying the full cost of driver time and they're not paying the full cost of driver training and so we need to we need to get some,

00:26:06: accurate pricing mechanisms right that hold the people who have the power to make the system efficiently.

00:26:12: Accountable for those in efficiencies you know in the industry and that's and we need to we need to have a policy of regime that incentivizes efficiency rather than inefficiency which is then put on the,

00:26:25: which causes the shortage that's a fascinating point that essentially the least attractive employers like if I could rephrase that as I heard it.

00:26:36: The least attractive employers are the ones that have the most.

00:26:40: Natural incentive to to conduct training programs a sorry new new driver Recruitment and training programs.

00:26:49: Because they can't get existing drivers the existing drivers would go you know.

00:26:54: I've either been there once and I hated it or I can I'm already into you know such a position I'm not going to go to that and.

00:27:03: And so as you said like if you're only way into the sector is through the kind of the worst.

00:27:09: Bootcamp be you know expletive onboarding that you you know that that exists you're gonna have a lot of people who bounced out before they get through the.

00:27:19: The other end of that tunnel and can get better paying jobs that set fair that's exactly right so you know and that's where this idea that you know this is going to be this under 21.

00:27:30: Driver training is going to be at apprenticeship right is is really something we should.

00:27:36: We should heavily scrutinized and I should say you know these training companies the.

00:27:41: They use these traits you know quote training programs as the way that they move Freight in many cases right so right now the cheapest the cheapest way to move Freight is to have,

00:27:53: you know an inexperienced trainer with a year or two of experience who's working at,

00:27:58: you know a low-wage who's you know incentivized to you know use the time of a trainee to drive,

00:28:06: so the trainers are are most often paid for the number of miles that the trainee drives.

00:28:13: Yeah so you know that's just that talk about a perverse incentive right you've got someone who's responsible for teaching the person how to how to drive safely which is Paramount right I mean there's no there's nothing more important,

00:28:27: getting paid based on how many miles they can get that trainee to drive.

00:28:32: And so that that's a toxic situation right there especially as we get younger more vulnerable people into those trucks those 18 19 20 year olds.

00:28:42: Who you know sure an extra hundred or two hundred bucks maybe a powerful motivator and you know a trainer who's telling them yeah you can drive a couple more hours now there now that's fundamentally about the fact that we allow them to operate.

00:28:56: Essentially as a team.

00:28:58: We should not do training trucks should not be working as a team they that should be a formal role of a trainer.

00:29:07: Devoting their work time to Preparing a new employee to take on a very serious task of you know 65 miles an hour with 80,000 pounds around my family minivan I want that done right yeah.

00:29:21: You described it as two planks to improve this one being a policy Improvement which sets sort of minimum standards floors.

00:29:31: Find on payment pay for all hours worked you know caps working hours Etc which sounds very very reasonable.

00:29:40: And and then there's a second which is ensure that people can get into this in a way that isn't essentially predatory of their interest of getting into the sector,

00:29:52: allowing that to be sort of driven mostly by the worst companies just out of curiosity do you think that if the second aspect was resolved.

00:30:02: Do you think the competition between trucking companies for drivers would would resolve the.

00:30:08: The low pay and too many hours of service I think it would it would help.

00:30:14: But it wouldn't solve the problem entirely I do think we need a we need a to two-prong approach here on the on the job quality side.

00:30:24: Most of it is simply exist in enforcing existing laws would go a long way yeah yeah so.

00:30:31: You know and that would be number one enforcing minimum wage so we have widespread violations of minimum wage law in the parts of the industry that have high turnover,

00:30:42: you know why is that it's because the industry has successfully for the last couple decades argued that,

00:30:48: they're only responsible for paying minimum wage for the number of hours that workers log in there DOT log books yeah that is not,

00:30:57: the basis for compensability for truck drivers it's not how many hours you log for safety purposes the Department of Transportation has a,

00:31:05: has a different set of definitions for what is work time,

00:31:10: from the Department of Labor so we have widespread minimum wage violations.

00:31:16: If we wanted to then go a step further Beyond just simply enforcing existing laws and an actually,

00:31:23: you know improve the compensation of drivers we could extend overtime protection to two truckers who in the US or not.

00:31:32: Entitled to the same rights as other workers who you know get time and a half after,

00:31:38: after 40 hours so that's sort of number 1 on the compensation side that's obviously directly tied to the Department of transportation's hours of service regulations which again are you know essentially universally violated by,

00:31:52: truckload carriers yeah they're followed to the letter by good employee.

00:31:58: And they're not followed At All by Pat employers and again that's because the drivers paid by the mile and they have a strong incentive to.

00:32:06: Under report those hours then just get one point on that there's you know a lot of folks y'all your listeners are pricing well don't we have electronic logging devices didn't that.

00:32:16: Isn't it automatically record the hours well first of all doesn't even record all the driving hours because the truck has to reach a certain speed for a certain time and so they can creep and do all sorts of things to get it from to not click on and put them on driving.

00:32:29: Most of the time that's being underreported is this you know on duty not driving time weather waiting yeah and that's going to be manually log by the driver so those two areas just enforcing them now.

00:32:42: I don't want to say that hours of service should just be you know Ironclad enforced the way that they currently exist right now they penalize better drivers safer drivers put more restrictions on them than we should have.

00:32:55: But that's because of the problems that are caused by these high turnover models where we have brand new inexperienced drivers we should really have two sets of rules.

00:33:05: What and this would go a long way toward incentivizing companies to retain experienced drivers and say look you 6 months on the job you're a year on the job you don't know what you're doing.

00:33:15: Here are the rules for you we're not going to give you the freedom that we're going to give somebody who's proven over a hundred or two hundred thousand miles there are safe driver,

00:33:23: you know that's the real test of whether someone's going to be a safe driver not 45 minutes in a CDL test it's a couple years and then insurance companies know this the experienced employers know this.

00:33:34: I believe you're an experienced safe driver when I can see two years of clean driving record with no accidents no violations you've proven yourself and now you get you know to move on so we should really have.

00:33:46: Two sets of rules one for folks with you know just say less than 2 years.

00:33:51: And one with more than two years where we should trust them as professionals who know the best way to stay safe now.

00:33:57: It's fascinating I wonder when the things that comes to mind we talked about this is I also realized that insurance but particularly the best employers as you said they apply a filter there they're looking for clean driving records.

00:34:09: And years of driving essentially.

00:34:12: And given the high stakes pressure of the because you can't get there until you've done work somebody else right so given the high-stakes pressure of the first employee.

00:34:23: It even makes this whole process riskier for the driver where the drivers the drivers trying to just get that work record up so that they can get onto a better job but if.

00:34:35: In their current job they're pressured to do more hours to you know essentially to take risk right.

00:34:42: And they're the ones that are going to hold the consequences for that in their future earnings if then they have a an actual accident.

00:34:52: Yeah these so these training programs that's the other you know chunk of problems they're chewing up these people who are making a significant sacrifice to try to get into the career,

00:35:04: we have hundreds of thousands of people every year who want to become truck drivers who are who are willing,

00:35:10: to spend weeks months away from their family to get into the job,

00:35:14: and they're being put in these these situations where they're trained poorly if you talk to good employers and and you know I've had some of them recently tell me you know we're thinking about training our own because of all the bad habits,

00:35:28: that way yeah that we find in these drivers you know they're trained to cut Corners they're trained to focus on how many miles am I going to get in today.

00:35:34: And my company you know I want the they'll say you know I want high cut High customer service high quality customer service I want safety those things are.

00:35:44: And so I'd rather train people from scratch now why can't they do that well or at least now up till now why haven't they done that.

00:35:53: Because you do need some scale right to support these these training programs you know and it's a huge you know both in the recruitment.

00:36:01: Of the drivers having that web presence and and you know basically the HR capacity to process,

00:36:08: you know recruiting process these new hires and then that training capacity where you have the routes laid out you have the drivers who you know who understand how to be a good trainer there that's it that's a real investment,

00:36:20: and you know the ability to capture all this government subsidy Etc and those High turnover companies have done that if you look at the organizations that do this you know that the as the corporations that do this,

00:36:32: as organizations of huge portion of what,

00:36:35: the Amaze your motor carrier in truckload does is recruit and train drivers and so you know those better employers up until now have have not invested in that you know and we have to that's part of the policy,

00:36:50: puzzle is how do we you know ensure that the right employers have the the incentive and the supports to to do it to do it right and one of the so for instance one of the very simple things we could do.

00:37:03: And you know this is going to require a little bit of data but but we should be able to do it pretty easily.

00:37:10: Say to say to employers hey you want to you want to take a government subsidy to train a new truck driver.

00:37:17: Great here you go but in two years we're going to come back,

00:37:21: and we're going to look and see if that you know if 50 percent or whatever it is of those folks that you trained are still working as truck drivers,

00:37:29: and if you know you and if we look at your you know the thousand people you've trained and only 200 of them are still working as truck drivers 2 years from now.

00:37:37: You're not allowed to come back to the public trough and feed again all right I don't really just simple stuff like that,

00:37:44: basic common sense that's going to incentivize you know long-term relationships and investment in in driving careers,

00:37:53: yeah I think one of the other things that we hear and again the the the listenership of the podcast these are Logistics professionals many of us though our.

00:38:04: One Step removed from from this we're consumers in our procures of logistic services and we're buying Road transportation.

00:38:14: We're helping facilitate buying Road Transportation you know between a manufacturer retailer and and Logistics providers.

00:38:24: In that regard if we sort of think about that one of the things that this group here is a lot is.

00:38:31: Technology solves so we here for example that through better optimization of the fleet and the routes and cutting out dead miles or dead kilometers in the route.

00:38:42: Will be able to cope with this shortage of drivers and I'm pretty sure you have a view on that might I have a pretty cynical reaction when I hear that is a it sounds a lot like a sales pitch not so much like a solution but.

00:38:55: Yeah how do you take that well the technology.

00:39:00: And you know as I'm sure your listeners know you know the the technology that's already been introduced into the trucking sector over the last few decades is,

00:39:10: is incredible right just press the satellite links computers right right the Qualcomm systems safety features.

00:39:19: Yeah I mean it's.

00:39:22: It's a very different job even than when I started and did my field work 15 years ago when I started driving you had to know how to read a map,

00:39:30: you had to know how to shift the truck right you had to you had to enter your hours of service you know manually you had to manage your time very carefully to you know avoid rush hour etcetera all that stuff can be automated and and.

00:39:45: Often is automated now so we've had tremendous increases in the amount of technology and that drivers are interacting with,

00:39:56: and that is largely been used to descale workers right to be able to use.

00:40:01: Cheaper workers more efficiently to get more of a return out of it that's a big.

00:40:08: Problem for the driver for the driver shortage because there's no floor right under those labor standards and so,

00:40:16: if you have you know an incentive.

00:40:19: To you know leave the driver unpaid but just to please a customer right you know once once the loads on and you're ready to roll then you can you know maximize the use of that truck.

00:40:33: But.

00:40:35: The the I think the ultimate proof that technology is not alone the solution that it's really an interaction between technology and policy.

00:40:44: Is the rate of utilization that we have right now for trucks we've had all of this technology go into trucks and routing of trucks and optimization,

00:40:53: and we're still using them six and a half hours a day to actually move Freight which is worse than we used to have historically,

00:41:01: now some of that's the bigger macro picture right I mean as your listeners know very well truck average length of haul has gone down tremendously,

00:41:10: right so we have a lot more short loads but for drivers what that means if they're paid by the mile.

00:41:16: Is a lot more unpaid time the amount of waiting time the amount of non-driving work as a proportion of what they do is going up.

00:41:24: Right as that average length of haul goes down so.

00:41:29: Technology and optimization relative to the driver problems right is alone is not going to it's not going to solve things and,

00:41:37: you're not going to have the incentive to use it you know if you got a Teamster driver let's take ups right if your ups and you got a Teamster driver sitting at a dock.

00:41:47: You know for an extra hour to those costs matter to you because you're paying for every minute of that time if you're a truckload carrier,

00:41:54: you know you'd rather make sure the customers happy then worried about that first hour or two of the drivers on page,

00:41:59: let me mention something I just want to clarify this for people are listening because I find this fascinating you've pointed this out and it's something I noticed as well why in the world does it matter.

00:42:10: Rate per mile.

00:42:11: Is so what's happening here is the drivers for historical reasons you couldn't you didn't know what they were doing right so you would pay them per mile back in the wild west days of they disappear and then two days later they show up at the other end and you know what happened right.

00:42:26: But as you pointed out previously like not only do we already have the capability to track them in detail.

00:42:34: But if we if we were so inclined we could go even further in the tracking of the worker and the utilization of their time.

00:42:44: And so there really isn't an excuse actually anymore to compensate these drivers.

00:42:50: On a per mile basis and something I sort of bring up in part because the listeners on the color or procurement Professionals in many cases and they can have an influence on driving that.

00:43:01: You know that compensation model depending on how they themselves procure yeah there's this you're absolutely right so the the.

00:43:10: And this is again a great a great example of how technology has played out up until now which is,

00:43:17: you know not for the benefit of drivers right if we if we wanted to use these Technologies to make the job better there are a number of ways that we can do it.

00:43:28: And,

00:43:29: you know the the fact that drivers are still paid by the mile I think is the ultimate indication of of you know the fact that technology is not alone going to.

00:43:40: The difference so yeah you're right you know the idea of paying people by the mile is they've got some skin in the game right so you can observe them you don't know what they're doing and so you know you want them to to want to drive.

00:43:53: Today we know exactly what they're doing companies big truckload companies with these inexperienced drivers they manage them from afar,

00:44:00: no the driver manager can see on the screen whether the trucks been when the weather the truck is rolling and they can see what how long it's been since the drivers 10-hour break elapsed and they can you know message him and say hey,

00:44:13: you know I see you're still sitting in our after your break expired what's you know what's going on why aren't you right right,

00:44:20: so you know you do what you do with most workers you manage them right now the reason we don't is because you know we get to put the cost of that you know slack period that inefficiency the slowness of the,

00:44:35: you know of the market or whatever is causing you to not to not you know have Freight to move,

00:44:42: you can put that on the driver directly or you can you know not worried about the additional cost as much,

00:44:50: of having that truck sit at a dock or waiting to load now of course the big companies when they're when they're looking at you know their contracts they're calculating dwell times of their trucks they know,

00:45:01: they've got Jeep the GM precedent for asset turned they know that that's the irony is saying for asset turn it's baked in but it for labor it's not really yeah it's a shame if I sort of recap what we discussed.

00:45:16: I think we start with this Top Line message that is quite scary for supply chain professionals modern supply chain was.

00:45:24: Modern supply chain says they exist like in Europe in the US were based on the premise that Logistics is a cost if you want to do.

00:45:31: If you want your business to do twice as much volume you simply pay for it.

00:45:37: But that with things like the ocean Freight crisis of last year it was no longer cost it was it was literally the rate-limiting for for the business and that that's scary and then when we hear about driver shortage,

00:45:49: we wonder is this the same thing as that is it rate-limiting.

00:45:53: Add what we're uncovering here is that no actually there's latent capacity in the form of trained drivers and apparently a flow of interested new trainees.

00:46:03: But they're they're entering some of the worst conditions you know possible for working.

00:46:10: And unless they stick it through for a number of years to get the better jobs than they bounce out.

00:46:17: Yeah so and I think this is where it is important to step back and recognize the driver shortage for what it is which is lobbying right.

00:46:26: So it doesn't matter and it what's great for the industry as its Timeless right so for for 40 years they've been claiming a driver shortage.

00:46:35: If you want to increase the weight of trucks on the road and you want to go to Congress so you say well there's a driver shortage if you want greater.

00:46:42: Public subsidy for training new truck drivers will there's a driver shortage if you want to loosen the regulation on how many hours they can work well there's a driver shortage.

00:46:50: If you want to lower the age for drivers to you know enter Interstate driving while there's a driver shortage so it is it is the multi-purpose master.

00:47:01: If you want to raise rates for your customers well guess what there's a driver shortage so the and the driver shortage is as actually a great situation for many carriers I mean individually would they love to add more drivers.

00:47:15: Yes but they get to they've got a narrative they can take to Congress to their customers,

00:47:21: and they're hopefully if they for them if they get their policy wishes,

00:47:26: they get cheaper and cheaper labor in these segments right yeah so yeah you got to learn the boss labor and higher rates so you know a shortage of truck drivers is great for rates.

00:47:36: Yeah it's one of the things that's always been suspicious about this up on first.

00:47:41: Reaction for me is like look if you look at there are there are things like a shortage of engine certain types of engineers in the software sector.

00:47:48: Those those roles therefore command significant premiums and the workers get treated very well they get.

00:47:56: All the perks you know that we kind of laugh about in public but but would be nice to have right.

00:48:02: And you don't see that so it makes the sort of the red flag goes up of well if you really wanted more drivers obviously a sector may be stretched but when a sector stretched for a scarce resource they begin bidding it up essentially and,

00:48:17: I think well if you're you know if you really are having trouble finding drivers you would offer them.

00:48:21: More money I think I just want to go back to your sort of solution concept here has two planks it's got a policy arm which.

00:48:32: Largely just sounds like eliminate the the egregious sort of omissions of other worker protections that they would already have,

00:48:42: and then has a second about freeing up or right kind of improving the quality of the,

00:48:48: training programs so that they're not being fed into the worst of the sector and they're also being held accountable for the actual long-term outcomes of the trainees.

00:48:58: Especially for subsidized training I want to propose a third one I'm interested to hear your point of view you know social responsibility and buying is a very important topic in supply chain so.

00:49:12: Where you Source your cotton where who assembles your goods those are actually critical choices and Define the procurement possibilities for many companies,

00:49:23: and I would prefer I would pause it that there's also a third third arm of this that says regardless of what the regulatory framework says and regardless of what the.

00:49:33: Training pipeline looks like we who are in the procurement side of the business of logistics we can shape actually how people are treated.

00:49:43: Just for social kind of social reasons just to say we won't procure transportation services from somebody who's paid you know.

00:49:53: Half of minimum-wage in and say the us or in Europe the same way that we won't procure child labor from our suppliers even if that's not our company even if it's an arm's length.

00:50:05: Arrangement so I'd be curious to hear if you think that that's also a viable plank to the solution well I think,

00:50:11: it would be wonderful if we could get it to work you know Transportation as you're saying before is seen as a cost and so you know.

00:50:21: I think you'd have to I would assume you have to make a case,

00:50:24: that there's some value in that right that that building those kinds of values into your purchasing transportation is going to have is going to have some some benefit I would love to think that.

00:50:38: We could get big purchases of transportation to care about truck driver can conditions,

00:50:44: you know we've had 40 years for them to to sort of see it but In fairness right to them again we have these Master narratives right yeah just I just saw some headlines recently,

00:50:57: you know oh my God there's a truck driver shortage and these guys are paid 100 thousand dollars a year,

00:51:02: yeah which is you know again that's one of the purposes of Miss Lee know yeah it's a great recruitment campaign right because what that underemployed or unemployed worker is going to see is that,

00:51:14: is that that headline and so you know the the first thing we got to do is you know.

00:51:20: Help people to understand you know what the what's going on in these these labor markets the fact that it's so high turnover.

00:51:28: Means that you don't have much labor voice you know as bright as the unionist would say but you know the union segment is very small and you know it's not involved in a lot of these truckload you know markets,

00:51:42: there there's no there's no representation of workers you have,

00:51:46: the owner-operator independent driver Association but they're really mean they have some an overlapping concerns but they're not in this market,

00:51:53: right these workers are just you know they have literally no representation at all right,

00:51:58: yeah so I think I think for me this was really interesting I'm contrary and on this topic I was I was really excited to talk to another contrarian but one who's much better informed on the details of it.

00:52:10: And I find it really fascinating,

00:52:12: I just for a second also say that you have a work coming out sometime in the future on the Thomas Trucking maybe another day we can get you back to talk about autonomous Trucking which is,

00:52:24: just something of some interest to us as well,

00:52:26: but for today really appreciate you taking the time and being a guest on the podcast well thanks for having me all right that was the logistics try podcast episode with Steve ficelle I hope you learn as much as I did,

00:52:39: if you like Today's Show please subscribe to the podcast so you don't miss any of the future episodes.

00:52:45: We will most certainly have Steve on again to talk about autonomous trucks and we will also talk about driver shortage this in Europe soon thanks for tuning in today I'm Boris felgendreher until next time.