Article written by Richard J. Cuculick, CPA
Director
Katz, Sapper & Miller
rcuculick@ksmcpa.com
The transportation industry is faced with a problem – companies cannot find enough drivers. Although the economy has not fully recovered, transportation companies have seen increases in freight that needs to be shipped. Today, in most markets the quality of available drivers is marginal at best. Furthermore, according to CNNMoney and the Council of Supply Chain Management Professionals, the U.S. trucking industry will need to hire another 200,000 drivers by the end of 2011.
There are a number of reasons the industry is in this position. The National Transportation Institute benchmarks a multitude of factors concerning driver pay and driver supply and demand. The following are a few of the factors cited for the current driver shortfall:
- Surgical downsizing due to the economy – Prior to August 2009, higher quality drivers were available, which allowed companies to cut their lowest producing drivers and replace them with high producing ones.
- Unlimited unemployment benefits – The unemployment benefits are so good that many unemployed truck drivers are not motivated to re-enter the workforce as a truck driver.
- Part-time jobs – Drivers found part-time jobs that allowed them to spend more time at home with their families.
- Many drivers are unqualified – The transportation industry today has more arduous requirements than in previous years.
- Lack of recruiting and retention – Many trucking companies have not emphasized recruiting or driver retention to build and maintain their workforce.
- Retirement, including early retirement – The driver population is aging fast, and the economy forced many truck drivers into early retirement. Compounding the problem is that the industry is struggling to fill the pipeline with younger drivers.
In hindsight, arriving at the current predicament was like a perfect storm. The economy forced many drivers out of the work force and drove driver pay down. In the meantime, out of work truck drivers were forced to collect unemployment or pursue a new employment opportunity. In some cases these new opportunities, even if they were only part-time jobs, allowed individuals to spend more time at home. The fact is, being a truck driver can be less attractive than other jobs due to the quality of life issue. Pair this with a decrease in pay, and it is understandable why some of the best talent was lost.
In addition to these issues, the U.S. Department of Transportation’s increasingly restrictive requirements have resulted in fewer qualified drivers and a loss of productivity from current drivers. Updated regulations such as the Hours-of-Service and the Compliance Safety Accountability (CSA) are two of the main reasons for this loss in productivity, which has resulted in drivers spending less time on the road.
Finally, company cutbacks in many instances reduced, if not eliminated, recruiting departments. As a result, companies are fighting an uphill battle trying to recruit and train drivers with less available resources.
There are, however, ways in which the current situation can improve. For this to happen, driver pay will need to increase, and companies will have to emphasize and improve not only the recruiting and building of drivers, but also the retention of drivers.
It is important for a company to carefully select new drivers they believe can succeed and take the necessary steps to train them thoroughly so new hires are, and remain, qualified with today’s stringent requirements. It is essential for companies to be effective at training drivers so they are productive and can continue to thrive. Having great recruiting and training departments only helps competitors because if there is not also a focus on retention management, the drivers could use the training to benefit a competitor. Hiring new talent is only the beginning.
Once a company finds the right people, it needs to find ways to retain them. One way this can be done is to create a driver-centric culture. Every effort must be made to understand truck drivers – what motivates them, what issues are of concern to them, etc. This is a necessity not only for retaining drivers, but for recruiting new talent as well. Taking these kinds of steps lets the workforce know they are valued, which in turn makes them more likely to remain and become valuable assets to the company as their experience grows.
The rules of the game have changed and each company will have to adjust. However, if the areas of recruiting, training and retention are diligently attended to, it gives companies the best chance to succeed in any economy.
Katz, Sapper & Miller (KSM) is an employee-owned public accounting firm headquartered in Indianapolis, Indiana. With over 250 employees, including 35 partners, KSM is ranked as one of the largest independent certified public accounting firms in the nation. The firm provides clients of all sizes in every industry with a wide array of service offerings including assurance, tax and consulting services. KSM has received several awards of recognition, including being named as one of the “Best of the Best” accounting firms in the nation by INSIDE Public Accounting magazine.
Driving Ambition is a premier CDL truck driver staffing company serving Indiana, Ohio, Kentucky, and Tennessee. Since 2001, we have specialized in matching safe, experienced CDL drivers for our customers and great job opportunities for our professional truck drivers.
Our commitment to safety and building solid working relationships with both customers and CDL drivers has allowed us to earn an unparalleled reputation with our Proven Drivers and Exceptional Service.
On January 31, 2011, the FMCSA proposed an Electronic On-Board Recorder (EOBR) rule that greatly expands the current rule put out less than a year ago.
The current rule, published in April 2010 and effective June 2012, requires the installation of EOBRs for motor carriers found during a compliance review to have a 10 percent violation rate for any Hours of Service (HOS) regulations. It’s expected to affect only 5,700 interstate carriers.
The newly proposed rule, which will go into effect three years after it is made final, would require all interstate commercial truck and bus companies to install EOBRs to systematically monitor their drivers’ HOS compliance. The rule would apply to all carriers now required to maintain driver logs, which affects approximately 500,000 interstate carriers.
The proposed rule exempts short-haul carriers whose drivers currently use time cards, primarily those of “property-carrying CMVs that do not require a CDL and who operate within a 150 air-mile radius of the driver’s normal work-reporting location under the current provisions.” In cases where drivers mainly use timecards, but occasionally drive beyond the limits of their normal operations, the FMCSA indicated it would permit continued use of timecards.
The proposal also relieves interstate motor carriers from retaining certain HOS supporting documents, such as delivery and toll receipts, which are currently used to verify the total number of hours drivers spend operating the vehicle.
The proposal includes a requirement that carriers maintain an HOS management system - controls, policies, programs, practices and procedures that systematically monitor a driver's compliance with the rules, and verify the accuracy of the logs. Failure to maintain such a system would be listed as an acute and critical citation.
Carriers found to be in violation of the EOBR requirement would face penalties of up to $11,000 per offense and impact the carrier’s CSA rating and DOT operating authority.
“We cannot protect our roadways when commercial truck and bus companies exceed Hours-of-Service rules,” said Transportation Secretary Ray LaHood. “This proposal would make our roads safer by ensuring that carriers traveling across state lines are using EOBRs to track the hours their drivers spend behind the wheel.”
“This proposal is an important step in our efforts to raise the safety bar for commercial carriers and drivers,” said FMCSA administrator Anne Ferro. “We believe broader use of EOBRs would give carriers and drivers an effective tool to strengthen their HOS compliance.”
The FMCSA has extended the comment period on this proposal until May 23, 2011. The FMCSA will consider all comments and material received during the comment period and may change this proposal based on those comments. The rule will likely be published prior to the June 2012 compliance date for the current EOBR rule. It will enforce the current rule during the period between the 2012 compliance date and the compliance date of the new rule.
Driving Ambition is a premier CDL truck driver staffing company serving Indiana, Ohio, Kentucky, and Tennessee. Since 2001, we have specialized in matching safe, experienced CDL drivers for our customers and great job opportunities for our professional truck drivers.
Our commitment to safety and building solid working relationships with both customers and CDL drivers has allowed us to earn an unparalleled reputation with our Proven Drivers and Exceptional Service.
Truckers for a Cause hosted an educational conference call on "Do's and Don'ts of submitting comments to FMCSA" on Jan. 22. If you were unable to join the call, you are in luck: the call was recorded and is now available here.
The 30-minute discussion, followed by questions and answers, was conducted by former FMCSA Administrator, John Hill, and Joe Rajkovacz, director of regulatory affairs for OOIDA.
The conference call was designed to help drivers feel comfortable with the comment process, understand how FMCSA uses comments and help drivers make comments that will influence FMCSA.
This special session covered practical Do's and Don'ts such as:
DO: Read the NPRM (Notice of Proposed Rulemaking) for yourself.
Don't: Base your comments on what you heard about it from other truck drivers.
DO: Make your comments polite and respectful.
Don't: Forget to run spell check.
A list of Internet resources drivers can use for writing, editing and getting others to help check their comments prior to submitting them to FMCSA is available at www.truckersforacause.com.
Truckers for a Cause and the Truckers for a Cause chapter of A. W. A. K. E. are driver led support groups educating and helping drivers with health issues.
Driving Ambition is a premier CDL truck driver staffing company serving Indiana, Ohio, Kentucky, and Tennessee. Since 2001, we have specialized in matching safe, experienced CDL drivers for our customers and great job opportunities for our professional truck drivers.
Our commitment to safety and building solid working relationships with both customers and CDL drivers has allowed us to earn an unparalleled reputation with our Proven Drivers and Exceptional Service.