“The road to Hell is paved with good intentions” explains a naïve individual working in good faith — but resulting in unintended negative results. For many of us in freight transportation, the recent initiatives by the Biden administration’s Supply Chain Disruptions Task Force to increase truck driver recruitment is such an effort.
The Biden-Harris Trucking Action Plan focuses on increasing the trucking workforce with veterans and more diverse applicants — especially 18-21 year-olds who are currently ineligible to obtain a federal commercial driver’s license (CDL).
The challenge is that driver recruitment – and retention – is not just about having drivers. A simultaneous challenge for trucking companies is acquiring insurance for them. With the increase in “nuclear” truck crash verdicts, it is increasingly difficult to acquire affordable coverage. These verdicts have undergone logarithmic increases over the past decade: eight-digit, nine-digit, and now 10-digit jury awards.
Carriers — especially those with assets — have had to resort to complex insurance strategies to remain covered. Even then, increased self-insurance has become more common. The federal insurance minimum is currently $750,000, but most customers require higher levels. The federal limit was established in 1980, and legislation has been introduced to increase it to $5 million.
With nuclear verdicts one accident away, many trucking firms have found their driver recruiting and retention efforts hamstrung by insurance underwriters refusing to cover drivers they deem an excessive risk. Allowing younger drivers will only increase the likelihood of disqualified drivers by either outright exclusion or insurance rates too high to afford.
One solution would be for the federal government to underwrite this risk similar to how they do in the name of other public policies (e.g., floods and nuclear accidents). For veterans, this could be rolled into GI Bill benefits. However, this is not likely to change the hiring practices for “the best” trucking jobs that require at least three years of safe driving history and a minimum age of 25.
Bridging the 18–25-year-old driver gap requires some new thinking. One possibility would encourage trucking companies to take ongoing, proactive safety measures. Today, a valid CDL and passing a one-time road test is deemed sufficient to seat a driver.
Although there are tools to provide ongoing safety monitoring and highlight training opportunities, they are not used because of fear of a future accident disclosing a driver’s previous history. In other words, it is better to discard a qualified individual — who wants to drive a truck — than to improve the quality of the existing driver population. The government should consider quality review privilege (similar to doctors) that balance confidentiality and promote comprehensive safety.
It is unlikely that these three driver safety/insurance/liability issues can be resolved on their own; however, it might be possible to solve them simultaneously in a single legislative package.
Plenty of obstacles exist to seating drivers
There are other obstacles to having the necessary drivers our nation needs. The Drug and Alcohol Clearinghouse prevents an applicant’s previously failed test from remaining unknown to subsequent potential employers. There is a clear safety mandate here; however, medical, and recreational marijuana — which is legal in many states — remains in the body for a long time and is currently grounds for disqualification.
Ironically, this exclusion is likely to counteract any initiatives for the 19-25 cohort. The adoption of hair follicle testing (instead of traditional urine) will only increase the failure rate. This issue is further complicated by a lack of a scientific basis to determine impairment — such as how blood alcohol tests can.
Truck driving has also followed the demise of other industrial crafts. Prior to deregulation in 1980, trucking was a pathway to the middle class for company employees – usually union – driving company trucks. Because deregulation was a “cost-plus” doctrine, employers could easily pass on expense increases to their customers.
This was because regulation ensured a system of excess capacity that the nation could draw upon in times of war or other national emergencies. This inefficiency was “paid for” by monopoly licenses granted to carriers for specific origins and destinations. This prevented competition from new entrants (barrier to entry) but also prevented geographies from being abandoned (barrier to exit).
Similar to airlines and other asset-based network-operating entities, deregulation spawned rapid change. The independent contractor (IC) model changed trucking, similar to how ride sharing changed taxis. New entrants unburdened by legacy operations could freely enter new markets and provide better and less expensive alternatives. Legacy operating authority (such as taxi medallions) became worthless. Non-asset players could become a trucking company without the burden of owning tractors and trailers and hiring employees.
The IC is paid a flat rate — not an hourly wage. Initially, this attracted a large population cohort into the business as trucking became the preferred mode for enhanced supply chains. Not only is this population aging out, but the economic model has continued to change. Judicial review on whether ICs will cross over to employees is likely forthcoming, but once again the task force seems blind to this challenge.
Hours of service (HOS) regulations have been safety doctrine since 1937. However, four years ago, electronic logging devices (ELDs) became mandatory. With paper logbooks removed, drivers had to adhere to the legal driving limits. Overnight, somewhere near 30 percent of truck capacity — previously provided illegally — disappeared. For example, Chicago–New York legally takes two days with an intervening rest period; however, prior to ELDs, one-day transit was common. With fewer hours available to drive, the amount of remuneration is also reduced.
There are other issues impacting trucking as a vocation of choice. Many have become well known during COVID-19 as these “road warriors” became essential workers. These range from extended home absences to shipper/consignee lack of respect. The latter can range from lack of restrooms to extended loading and unloading delays.
The issues listed here are just the start. Only the federal government can solve this, but the federal task force has not addressed any of them other than its desire to seat 18-year-old drivers. “If you got it, a truck brought it” has been an economic truism for decades. Such a critical aspect of the economy requires a comprehensive plan — not a cursory treatment of symptoms — because vision without a plan is just a hallucination.
Contact Theodore Prince at firstname.lastname@example.org