Coronavirus is taking a bite out of the truck drivers pool
Story by:at FreightWaves
Trucking companies are realigning hiring practices to focus on experienced drivers as the supply of student truck drivers falls dramatically because of COVID-19.
The shift is a direct result of driving schools that have closed and state driver licensing agencies (SDLAs) that have either cut back hours or shut down entirely during the pandemic. This is constricting the pipeline of entry-level drivers that many carriers rely on for more than half of their driver positions.
“A lot of the driving schools have been deemed non-essential and have shut down, so that pipeline of new people has been compressed,” U.S. Xpress President [NYSE: USX] and CEO Eric Fuller told FreightWaves.
“You have no new drivers coming into the industry, with the same amount or even more leaving. Many drivers want to be home with their families or may not be comfortable being on the road right now. If you shut down the pipeline and the number leaving accelerates, you can be down 20,000 or 30,000 drivers pretty quickly.”
Data compiled by Tenstreet, a driver recruiting software company, found that student hiring fell roughly 35% between the beginning of March and mid-May. Experienced-driver hiring dropped as well during the same period, by roughly 30%.
Driver hiring (%) with base line=100 starting with week ending March 1. Source: Tenstreet
Driving schools take a hit
Part of the problem is that freight demand for drivers has been tapering off as the economy stumbles amid the pandemic. However, “I still think we’re going to produce 60% of drivers that we would have under normal circumstances,” said Don Lefeve, President and CEO of the Commercial Vehicle Training Association (CVTA), whose members include SDLAs and private driving schools. There are 17 states that have closed their SDLAs “and a few that are so severely limited that they may as well be closed,” Lefeve said.
Because of the effect that the pandemic has had on membership, Lefeve and others have been lobbying Congress to give the federal government authority to administer CDL testing. CVTA is also asking state governors to recognize CDL training schools as “essential services” as defined by the U.S. Department of Homeland Security.
Lefeve said his association is surveying its members on their experience in applying for and securing Paycheck Protection Program loans. “I do have concerns that the longer this goes on, like any business, some of these schools might have to close.”
Flight to quality
Truckload carrier Werner Enterprises [NASDAQ: WERN] operates 14 driver schools around the country, and so far only one of them has had to shut down. However, entry-level driver throughput through those schools – what Werner refers to as “placement drivers” – is down 40% to 50% due to social distancing and other COVID-19 effects, said Werner President and CEO Derek Leathers.
“Attracting and retaining placement drivers was difficult starting in early March as we started to see closures and/or social distancing practices being put in place, and that carried through April,” Leathers told FreightWaves. “I think the dramatic difference has been the lack of graduate through-put in the system.”
For Werner, the driver hiring mix is normally about 60% placement drivers and a 40% mix of experienced and “advanced placement” drivers, who are those with limited driving experience. The shortfall of placement driver availability has meant having to beef up the latter.
“The problem in that space is that it’s very difficult to find experienced drivers that have quality driving histories that don’t present concerns for us based on our hiring standards,” Leathers said.
He noted that the number of applications submitted from experienced drivers has been up double digits the past three years, while the actual number of hirable drivers within those applications has not noticeably changed. “That’s because over 90% have issues that we’re not comfortable with,” he said. “Applications for experienced drivers are only going to increase, which makes it more difficult to sift through and ensure we’re hiring the best.”
Carriers point to a lack of access to quality professional drivers as one of the factors that can lead to unseated trucks, but that issue may currently be less of a factor with carriers leaning more on experienced drivers. “We’re in a position to improve our hiring standards,” Fuller said, such as raising the bar on safety or giving priority to those with a more stable work history.
Melissa Stephan, recruiting manager for Tulsa, Oklahoma-based Melton Truck Lines, has seen driver hiring taper off significantly for both students and experienced drivers as carriers adjust to lower freight demand. “I’m wondering what the longer-term impact will be on driver hiring,” she said. “A lot of states already had a backlog for students trying to get their CDLs. I’m concerned about what that will look like when the dust settles after the pandemic.”
Leathers agrees. He anticipates a “hangover effect” of driver supply through the end of the year.
“I think new-driver entrants into the transportation space will be down for the full year – even when state agencies open back up – because there’s going to be a lot of pent-up demand for them to catch up on,” he said. “There’s really no way you’re going to end the year without the impact of less than 20% of new drivers entering the industry.”
Read the original story and more HERE at freightwaves
Source of original story and credits: freightwaves
iTrucker / Mario Pawlowski
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