Drivers: An H1-B Solution

Drivers: An H1-B Solution

The American Trucking Associations recently suggested the trucking industry's shortage of 20,000 truck drivers will reach 111,000 by 2014. Aside from recent fuel price spikes, increasing truckload driver wages have been primary drivers of escalating rates. Rates increased 4 to 7 percent per year for the last two years and are projected by equity investment firm Stephens to increase by that much again in 2006, after increasing more than 2 percent annually only twice between 1980 and 2003.

Eventually, this will begin to drive inflation and potentially depress economic growth. Several large TL carriers say drivers earn $50,000 to $60,000 per year, but even that is not enough to fill all carriers' seats. Instead, individual carrier turnover rates have increased, suggesting that drivers are simply chasing the highest paying job.

In the United States, the number of men and women aged 20 to 44 is expected to grow by less than one-tenth of 1 percent per year between 2000 and 2010, and by well under 1 percent through 2050. This key demographic, historically important in truck driving capacity, will significantly lag economic growth and exacerbate the driver shortage. Even if the job paid $75,000 per year, it's doubtful we would find enough people willing to accept the truckload driver lifestyle.

The shortages are not universal however, nor are the higher annual earnings. Short haul drayage truck drivers typically earn less than $30,000 per year. LTL carriers have no problem recruiting drivers at $42,000 per year, the average annual salary.

The average age of a Teamster driver is about 57, but no shortage of drivers is expected for these local and longer but predictable linehaul driving jobs. But as TL drivers move to this segment, the TL driver shortage will worsen.

Band aids will not provide the long term supply necessary.  

In my opinion, the need to add 20,000 or even 100,000 highly skilled new drivers is not an insurmountable problem, and there is a readily available solution that worked in the software industry.

For almost 10 years, there has been a dramatic shortage of computer programmers in the United States, although many from India, China and other countries have been eager to enter the field. One-third of all U.S. Ph.D.s in science and engineering are now awarded to foreign-born students. 

In 1990, the U.S. adopted the H1-B visa program to alleviate the shortage of skilled technical workers. The visa allows a skilled worker to remain in the country for up to six years, and many gain permanent residency and remain in the country indefinitely.

The annual limit on H1-B visas is 65,000, but it was as high as 195,000 from 2001 to 2003. I have hired many skilled workers under this program and can assure you, it was not because we could pay them less but rather because they performed exceptionally well.

We can learn from this industry. 

I believe we would find tens of thousands of applicants around the world for $55,000 a year. They will come from Eastern Europe, Asia, South America and many other places.

Some will say this will hold down wages for U.S. drivers. This could be true if too many immigrant drivers were admitted. However, this can be controlled by monitoring the pay required to fill trucks. Is anyone paying less money today to hire top-flight software professionals? If wages start to decrease, we have admitted too many. If it grows at the pace of other industrial wages, it's just about right.

What about training? It's probably best for the government to simply play a monitoring role. Paying for and committing to training could be a requirement of companies seeking to bring in an immigrant driver. Carriers would pay for training but could be supplemented by forward thinking shippers who understand the lack of qualified drivers will harm their ability to move goods at acceptable price and service levels. 

Some will argue foreign drivers won't know English and end up getting lost. However, more than 40 million Spanish-speaking people in this country seem to be navigating themselves fine. Regardless, a limited amount of English would be needed. How about a Rosetta Stone software version geared to transportation?

This is not a holistic answer to the TL driver shortage. Of course, we need to make the job a better one and shippers are increasingly becoming more driver and carrier friendly. But we will never be able to fundamentally change the nature of the long-haul truckload job.

Tom Sanderson is president and chief operating officer of Transplace, a third-party logistics firm based in Plano, Texas.