The trucking industry already struggled to keep drivers. The COVID economy made it worse
EDITOR’S NOTE: It's called "The Great Resignation," a seismic upheaval in the workforce that is reshaping today's economy. This week, Forum Communication Co. reporters will look at The Great Resignation's profound effects on workers and businesses across the region in our multi-part series, “Help Wanted.”
SUMMIT, S.D. — Eric Norquist and his wife, Krista, don’t always take turns sleeping in their truck cabin while on the road, but as an unseasonably warm weather system closed in on Minnesota and the Dakotas earlier this month, they took turns driving with the hopes of avoiding potentially dangerous conditions.
"It's definitely not stuff you want to drive a tractor-trailer in, that's for sure," Eric Norquist said over a headset as he and his wife cruised down Interstate 29 in South Dakota hauling a load of French fries from Grand Forks, North Dakota, to Oklahoma. "Even without totally tipping you over it can take you off the road."
The Norquists have an ideal arrangement: They haul loads from up north to states such as Texas and Mississippi and can often make it back to their home in north-central Minnesota by the weekend. The couple married in 2008 and started driving the same truck two years ago after Krista got her commercial driver's license.
In a segment of an industry that has suffered from high turnover and a pandemic-driven worker shortage, the Norquists are in a position many frustrated freight company owners might wish was more common. Long-haul trucking often entails weeks or maybe even months on the road, something drivers, company owners, and economists who follow the industry agree keeps many people away from the job.
"If there were 50,000 couples like us scattered around the country, the driver problem would be gone,” Eric Norquist said. “It's just not everybody is dealt that hand."
Shortage or turnover?
Growth in shipping demand during the COVID-19 pandemic has added to the industry's woes by fueling a driver shortage. U.S. trucking industry groups have complained of a driver shortage for years, but it's a hotly debated topic. Many economists question the existence of a shortage before the pandemic, instead citing high turnover rates driven by bad working conditions and pay in long-haul trucking.
Stephen Burks, a professor of economics and management at the University of Minnesota Morris who drove tractor-trailers in the 1970s, says the trouble started when the U.S. deregulated the trucking industry in the early 1980s. The move lowered shipping costs by promoting greater competition among firms, but it ultimately led to the decline of unions and lower wages for drivers. In 1980, an average trucker made around $100,000 in today's dollars, Burks said. In 2021, it is closer to $50,000.
Turnover has plagued the industry for decades. Between 1995 and 2017, large truckload carriers had an annual turnover of 94%, according to industry figures cited by Burks . Even as the nation was reeling from the late 2000s financial crisis, firms struggled to keep workers.
"You could not buy a job in America in 2010 and in long-distance truckload the annualized turnover rate was 39%," Burks said in an interview. "It says that it's the economic conditions of this part of the industry that create the situation that managers perceive as a shortage."
The American Trucking Associations, a group that represents trucking firms across the country, warned this fall that a shortage of 80,000 drivers could add to the nation's existing supply chain troubles. The association warned that the shortage could grow to 160,000 by 2030.
Burks disputes the ATA estimate but said there is indeed a pandemic-driven long-haul truckload drivers shortage in late 2021. Based on data from the Bureau of Labor Statistics, he estimates the industry needs closer to roughly 15,000 more long haul drivers to meet demand — something he says will no doubt cause headaches for firms.
"Historically there is no truck driver shortage," he said. "There's been a relatively tight labor market, but the noise, the statements from the industry that there is a shortage reflect the view of managers in a subpart of the business: long-distance truckload, which has this historical long-standing high turnover."
“There actually is something of a shortage now, a real shortage, in the short term,” Burks said. "Why is there a shortage? Because there was a huge demand spike from all the stimulus ... and from the bounce back from the COVID shutdown."
For now, it means an increase in freight rates for many long-haul drivers. Paul Mueller, president and owner of Bismarck, North Dakota-based P&B Transportation, says his drivers are seeing some of the best freight rates in 20 years.
Norquist, who started driving trucks in 2007, said per-mile rates have been some of the best he’s seen, and it has been months since he turned down a job due to a low offer. When he first started, he often saw rates as low as $1.65 per mile. Once considered a good rate, $3 per mile has become very common this past year, and many loads are paying more than $4, Norquist said.
"Right now, short term, it’s the best money we've ever made," he said, though added that inflation has eaten into his earnings. "But then I turn around and pay it at the diesel pump, and at the grocery store."
Far from home
Mueller, whose company has 65 trucks, says his No. 1 issue is finding drivers. Turnover is high for his company, about 25-30% of drivers quit after one year. Half of his drivers leave after five years. A lot of it has to do with distance.
"They don't want to work seven to 10 days out," he said, explaining that many drivers want to be home by the end of the work week. "Well, if you're going to Chicago it's hard to come home Friday night."
Minnesota Trucking Association President John Hausladen said many companies are trying to make adjustments to attract more drivers.
"Fleets have adjusted routes and length of haul to accommodate the needs of the modern truck driver," he said in an email. "Truck drivers today can pick from a variety of local, regional and over-the-road options. Today’s trucks are the safest and most comfortable they have ever been."
Despite those efforts, there are indications more drivers are deciding they want to stay closer to home. Burks said Jason Miller, an associate professor of logistics at Michigan State University, has recognized a “Great COVID-19 Reallocation” in truck transportation employment.
In a trend in part driven by the rise of last-mile deliveries for e-commerce, local general fright employment increased by 28,000 employees between October 2018 and 2021 — 10% nationally, Miller found. Meanwhile, long-distance less than truckload trucking dropped by 14,600.
"It's easier to get heavy tractor-trailer truck drivers who will work local and close regionally because they get home more often," Burks said.
"You still might be working 60 hours a week, but at least by Saturday noon they're home and they don't leave out until Monday morning or late Saturday night."
That relative consistency is something even the long-haul trucking Norquists seek and are able to pull off as a driving team. They don’t like to be stuck away from their home in Backus, Minnesota, for extended periods.
"We choose our schedule, but we don't like to be out too terribly long," Eric Norquist said. "Some guys stay out for months at a time, and if you like to do that, that's great, but that's no life."
Norquist says while the industry can be tough at times, he plans to continue trucking until he retires. Even then, the Park Rapids Minnesota native says he'll continue to do it as a hobby — possibly driving sugar beet trucks for farmers in the fall.
As far as the nation's logistics headache goes? He sees it getting worse.
"As an average Joe observer — you have an increase in population, you have a consumer society — and now a throw-away consumer goods society that just consumes a lot of stuff, whether it be phones, food, gadgets." Norquist said. "Don't you think that that a truck driver shortage is inevitable?"