Wondering where to find a trucking industry task force that’s trying to tackle the so-called driver shortage? Look north. The Canadian Trucking Alliance formed a “blue ribbon task force” in 2011 to investigate the root causes of driver hiring and retention problems north of the border and come up with solutions. Its findings, released in April, are pertinent to motor carriers throughout North America.
Trucking executives representing motor carriers from Nova Scotia to Alberta on the task force took a hard look at Canada’s driver hiring problems. They came to some conclusions that might make many of their fellow CEOs uncomfortable.
First, they said, “while not the only concern, compensation is inescapably the overriding issue” behind any existing or prospective shortage of drivers. For the hours they work, compensation packages for truckers, especially long-haul drivers, “are no longer competitive with other industries,” the task force said in its final report.
The CTA task force urged drivers be paid for all the work they do, not just miles driven, and concluded “the key is not necessarily how drivers are paid,” whether by the mile or by the hour or by some other measure, “but how much they are paid.”
Lifestyle issues, in particular, the long periods truckers spend away from home, are important, too. So is the treatment drivers receive from shippers.
“For us to really make a difference in all the areas where we need to change, we need the cooperation of our customers,” said Mark Seymour, president and CEO of Kriska Transportation in Prescott, Ontario, and chairman of the CTA task force. “This isn’t about driving rates up, and it’s not about being adversarial. For us to change the playing field for the commercial driver, both parties need to be aware of the threat. Until product doesn’t get to market, it’s very possible some of our customers won’t see the legitimacy of the threat.”
The CTA set about documenting the legitimacy of the threat last year by commissioning a study from the Conference Board of Canada, an independent, nonprofit research organization. That study, scheduled for release in mid-January, will include analysis of driver supply and demand in Canada through 2020 and an assessment of the potential impact of a driver shortage on shippers and the Canadian economy.
“The report will give us a solid, quantifiable basis to move forward,” CTA Vice President Ron Lennox said. “We want to move away from anecdotal stories to a solid academic understanding of the problem.”
There’s debate in Canada, as in the U.S., about whether a driver shortage even exists, and what it might represent: an actual numerical or demographic shortage of qualified workers or a shortage of people willing to work for the pay and conditions offered. Difficulty hiring and keeping drivers is most acute in the long-haul truckload sector, and is worse in some regions of the country than others, Lennox said.
“In the oil patch in Alberta, that’s where the problem manifests itself the worst,” he said, as energy companies outbid freight haulers in the battle for truck drivers. “We’re concerned about the gap between the $50,000 a driver might make in Ontario and the $150,000 he can make in Alberta,” Seymour said.
The problem is less pronounced in Canada’s rural Atlantic provinces, said Paul Easson, president of Eassons Transport in Berwick, Nova Scotia. “There aren’t as many other job opportunities here as in Toronto, so we don’t have the same kind of turnover,” as carriers closer to the industrial heart of Canada in Ontario and Quebec, he said. Still, potential drivers are lost to Canada’s energy and mining industries. “There’s hardly a family down here that doesn’t have a few people out west,” Easson said.
The draw of the oil sands and hard-rock mining in Canada’s northern provinces is similar to the lure of money to be made in oil and gas shale drilling in the U.S. “That driver is going to live in a camp and be away from home for months, but if all that person cares about is making money, they can do that,” Seymour said.
Despite rising recruiting problems and retention costs, the driver shortage isn’t a crisis — or even much of a shortage, according to sources on both sides of the U.S.-Canadian border. An American Trucking Associations study released in November estimated a 20,000- to 25,000-driver shortage among truckload carriers operating 750,000 trucks, and economist Noel Perry of Transportation Fundamentals estimated a 100,000-driver shortage, with enough work available for 2.6 million commercial drivers. In a Nov. 8 Journal of Commerce Webcast, Perry called that shortfall normal for a slow-paced economic recovery.
It’s the potential for a crisis as economic growth accelerates that concerns carriers, and should, they say, concern shippers. “As we sit here today, we don’t have a shortage, and this is on the eve of Christmas,” Seymour said. “We have a shortage of work, not a shortage of people.”
The CTA task force wants to avoid a crisis down the road, when the U.S. economy heats up, increasing demand in Canada. “It should not take a crisis to address the situation, and there is no guarantee the industry would emerge stronger following a crisis,” the task force said in its April report.
“The best possible long-term outcome for the industry is to begin now to set in motion a plan to take meaningful action to address the long-term, chronic driver shortage that confronts it,” the report said. That will take “a long, multiyear effort. But the focus needs to be on growing the driver pool and retaining drivers to meet future demand, not trying to steal a shrinking pool of drivers from each other.”
That may mean looking at different ways of paying drivers and moving freight. “In the mining and oil and gas business, everyone works shifts where they’re on for a period of days or weeks and then off for the same period,” Easson said. “That kind of schedule may be the something the trucking industry will have to look at.”
This article is part of a series exploring trucking’s driver shortage and ways to resolve it. For more, see The JOC’s 2012 Guide to Trucking, published Aug. 20, or contact William B. Cassidy at email@example.com.