In its 2015 Truck Driver Shortage Analysis, the American Trucking Association (ATA) estimated that the industry was short 48,000 drivers, and that that number could double by 2020. In its latest quarterly update to that report, the ATA delivered more bad news: in the second quarter of 2017, the turnover rate jumped to 90 percent, 16 percent higher than the previous quarter. Carriers are resorting to aggressive recruiting and large signing bonuses to fill their openings.
While raising wages is often presented as the solution to this problem, until automated vehicles provide a more permanent solution, the challenge is complex and requires a more comprehensive approach.
DHL Supply Chain has conducted its own research into the talent gap in the supply chain, shedding light on additional causes and potential solutions to the current situation. When DHL Supply Chain asked supply chain executives to identify the causes of the talent gap, nearly 70 percent listed “perceived lack of opportunity for career growth” and “perceived status of supply chain as a profession” as having a high or very high impact on their ability to find, attract and retain talent.
It seems likely that these issues relate as much to drivers as to other supply chain professionals. Addressing them requires a multi-faceted approach that goes beyond higher wages and signing bonuses. Here are three solutions that can make a difference:
Optimizing Networks to Improve Efficiency
At its core, the talent gap is a crucial problem for supply and demand. Although the need to increase the supply of drivers can’t be ignored, there is also an opportunity to better manage demand. Demand is growing, but that growth can be limited through a variety of tactics, including:
- Using expertise, analytics and software to optimize networks and enhance transportation planning to make more efficient use of available capacity. Tactics such as shipment consolidation and aggregation and cross-docking, when applied properly, can reduce LTL shipments, increase capacity and reduce miles.
- Advances in packaging that minimize over-boxing have the potential to increase the freight that can be transported within a cube.
- Ensuring intermodal options are fully considered can reduce the demand on over-the-road carriers. For example, DHL Supply Chain worked with a home appliance manufacturer to eliminate nearly 120 transports each week by increasing the use of rail.
With demand for shipments outstripping the supply of drivers in the coming years, it’s imperative that the industry leverages the technology and expertise that exists today to maximize the use of available capacity.
Improving Drivers’ Quality of Life
The silver lining to the driver shortage is that it’s creating greater respect and appreciation for drivers that extends beyond financial compensation.
One factor that has discouraged young people from entering the industry is the need for drivers to be away from their home and families for extended periods, which also contributes to excessive turnover. Adopting a relay approach to long routes in which multiple drivers transport the freight for one leg before returning home each night can minimize this. Incentive programs, based on factors such as customer satisfaction, can also play a role in increasing job satisfaction.
Another opportunity is the design of the transportation network. Drivers feel unappreciated when they are forced to wait at the dock for hours prior to unloading, often with minimal accommodations for their comfort. The driver’s time, comfort and safety must all be given greater consideration in transportation design to ensure they consistently receive the respect they deserve.
Creating the Next Generation of Drivers
Even with greater efficiency and better treatment of drivers, there is an undeniable need to attract more people to the profession. Through the Dock-to-Driver program, DHL Supply Chain identifies warehouse workers that have shown the stability, commitment to advance in their careers and invests in them to allow them to make the transition from the warehouse to driving. With approximately 10,000 qualified warehouse workers in the U.S., DHL Supply Chain has a rich pool of candidates from which to draw for this program.
Innovation That Delivers ROI
There is no simple solution to today’s driver shortage, but the impact of the shortage on the supply chain can be alleviated through more efficient management, improved working conditions for drivers and innovative programs to attract new people to the profession.
As president of transportation for DHL Supply Chain North America, Jim Monkmeyer oversees all managed transport and brokerage operations within the United States and Canada for shipments to and from anywhere in the world. Additionally, Jim co-chairs the North American Transport Board responsible for the integration of DHL’s Managed Transportation with dedicated fleet operations. Jim has been in transportation logistics for over 30 years working for General Motors, Ryder Supply Chain Solutions, Rockwell International and England Logistics (a division of CR England) supporting all industry sectors.