Supply Chain Trends

How the Driver Shortage Is Affecting the Supply Chain Industry

With the average age of truck drivers increasing by the day and regulations limiting the number of hours a driver can be on the road, supply chains are looking at a severe shortage of qualified individuals.

The problem of a weak labor market is compounded by the high turnover rate it causes. During times like these, drivers – knowing there are plenty of jobs out there – are more likely to quit their current job than they normally would be. Also, if a new job doesn’t turn out to be what a driver expected, they are more likely to have a former employer willing to take them back with open arms, often giving them back seniority and others benefits.

As any business knows, turnover mean lost production in the form of hiring and training new drivers. Hence, supply chain managers need to reduce turnover now more than ever.

Shortages may be here to stay

According to the American Trucking Associations (ATA), a shortage of between 35,000 and 40,000 drivers is looming as the industry fails to quickly replace its retiring baby boomer workforce. Smaller trucking companies will be particularly affected by this upcoming reality, as they are less able to offer the more generous compensation packages that larger companies can offer.

Driver shortages are nothing new. From 2005 to 2007, the industry coped with a shortage of about 20,000 drivers. This equaled a turnover rate of about 136 percent for large companies.

What to do

While companies may have a hard time pushing back against generational forces, there are steps a company can take to mitigate the driver shortage’s effect on its supply chain.

Companies that employ truck drivers should take extra steps to retain their employees and reduce turnover. Retention efforts are based on engaging employees and building their loyalty to the company. This can be done by giving them greater autonomy in their job, offering them more perks and addressing their concerns. For example, if drivers are expressing safety concerns about driving hours, providing concessions may increase shipping times, but it will lower turnover.

The key to retention efforts is to start them before a staffing crisis hits. If your organization decides to put off retention efforts, you will be starting from scratch when the crisis does finally hit.

For companies who outsource their shipping, expanding pick-up and delivery window times helps drivers to be more productive and capacity-effective. Companies can also look to shipping alternatives, such as rail, to reduce their exposure to the looming labor shortage. However, railroads – likely seeing increased traffic – have been charging higher rates.

The increased capabilities of supply chain managers mean they have more tools than ever at their disposal, and hedging against the impacts of labor shortage will increasingly be seen as a part of their responsibilities.

At ZDA, we understand the multitude of factors affecting the various labor markets. If your company is in need of a supply chain talent acquisition solution, feel free to contact us today!


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