Elgin Area Chamber Of Commerce: Shortage Of Long-Haul Truckers Boosts Leasing In Key US Logistics Hubs

Press release from the Elgin Area Chamber of Commerce:

February 16, 2022

Last October, the American Trucking Association estimated that the number of active truck drivers in the U.S. was about 80,000 below the optimal number needed to satisfy surging freight demand. This confirmed that e-commerce retailers and logistics providers faced an even more challenging shipping environment than the nearly 60,000-driver shortfall the ATA found in 2019.

But the labor supply challenges within the trucking industry are fundamentally different from those in other high-demand occupations, such as computer programmers or electricians. The current shortfall in truckers stems more from retention issues within the industry than from a lack of drivers with adequate training.

A 2019 report by the ATA found that there is no shortage of people holding commercial driver’s licenses. However, it appears that determining whether a seasoned trucker or a newly licensed driver will remain on the road depends in large part on the length of the routes they are asked to cover.

Carriers with the truckload, or TL, designation transport goods from one client, such as a retailer or manufacturer, within each truckload. Those drivers typically travel the farthest distances, sometimes remaining on the road for two to three weeks before returning home.

The ATA estimates that the portion of drivers for truckload fleets that either changed employers within the industry or left the field altogether was more than 90% in 2020 alone, a slight increase from turnover rates that were already sky high prior to the pandemic. According to the Bureau of Labor Statistics, long-term job growth within this sector has also been anemic, with total employment now below levels recorded 15 years ago.

In stark contrast, the ATA’s 2020 report estimated a much lower turnover rate of 12% among drivers for “less-than-truckload” carriers. Companies within this sector, such as FedEx Freight, carry goods from multiple clients within a single truckload, and their drivers typically run dedicated regional routes, allowing them to return home at the end of a shift.

Nationwide, employment by these types of carriers and local trucking firms has increased by 97,000 jobs, or 21% over the past 15 years.

For e-commerce retailers and logistics providers looking to deliver more goods in less time, this shift in driver preference from long-distance to intraday routes is helping to accelerate U.S. logistics leasing by creating more stops along the supply chain, creating shorter routes that enable drivers to offload their cargo to be sorted and transferred to other drivers.

However, markets that stand out within their respective regions for having the most households within a four-hour truck drive — the territory a driver can reasonably travel while still making it home at the end of a workday — have garnered particularly fast growth in distribution centers over the past decade.

These markets include Pennsylvania’s Interstate 81 corridor, the Greenville-Spartanburg area in South Carolina, and Orlando and Lakeland in central Florida. The outperformance in logistics leasing in these areas will likely continue throughout this year and into next year.

The tightest labor market in decades, combined with difficulties in retaining long-haul truckers, should continue to incentivize e-commerce retailers and logistics providers to boost their distribution operations in locations where drivers can reach the most U.S. households via intraday routes.

Source: www.CoStar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.