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The truck driver shortage and how it’s affecting prices

The truck driver shortage and how it’s affecting prices

In recent weeks and months,  we have discussed the extensive changes happening in logistics. Increasing E-commerce has led to innovative ideas and rising consumer demands. Although these changes are reshaping logistics, there are consequences, including the shortage of delivery drivers everywhere.

This problem has been presenting challenges and despite efforts industry-wide to turn the situation around, the problem seems to be increasing. It might be easy to assume that a truck driver shortage is a “logistics company problem,” but the issue affects everyone as the shortage is forcing costs to rise for everyone.

How does this work, exactly? First, let’s look at two key causes of the truck driver shortage.

What’s causing the driver shortage? 

Rapid growth of E-commerce

E-commerce hasn’t only risen in the past few years; it has soared off the charts. To get an idea of just how much it has grown here is a statistic from Trucking Info:

“From 1999-2017, e-commerce sales increased from less than 1% of total U.S. retail sales to more than 9% – a 3,000% increase in e-commerce sales. Annual growth of e-commerce has ranged between 13 and 16% over the last five years, outpacing the 1% to 5% annual growth in traditional retail sales.”

This raises the need for more drivers, thus making the gap between supply and demand even greater.

Demographics changing

Another major cause of the truck driver shortage is the fact that the older generations are retiring, and other demographic factors.

LTX Solutions states, “One of the largest issues influencing the driver shortage is the demographics of the current workforce, primarily age, and gender. The trucking industry relies heavily on male employees, 45 years of age or older.”

The younger generations do not seem to be taking interest in this field of work, in turn causing the shortage to only increase as the Baby Boomer generation quickly fades into retirement.

Another demographic issue is that truck drivers are required to be 21 years of age to operate the vehicles. LTX Solutions also says, “This leaves a three-year post-high school gap, where possible employees become distracted by new employment opportunities.”

How does this translate to rising prices?

From the truck drivers working overtime to make deliveries to the consumers ordering the products, everyone is affected by the driver shortage. It is impacting both maritime shipping and land shipping.

Manufacturers are affected because there are not enough drivers to deliver the materials they need to produce the products, thus causing production to be delayed and costs to rise (HDS Truck Driving Institute). The rising costs associated with the delivery of materials

Consumers are affected as shelf prices rise because businesses are having to raise delivery fees and truck drivers’ salaries to maintain everything gets to its place on time. According to Transport Topics, even McDonald’s has raised fees, thus affecting consumer prices.

What is the solution?

Any time there is a price hike along the supply chain, companies throughout the process are forced to look at ways they can tighten their proverbial belts. Some pass on their increased costs to the consumer, at least in part. Other companies choose to get by with much smaller profit margins. Neither is a perfect solution.

One way we think that will help is to find better solutions to the truck driver shortage. One solution is to appeal to all demographics, including women and high school graduates who may not be 21 yet. Another is to continue increasing truck drivers’ wages, but even that has financial consequences.

We also believe that educating people on how truck driving has evolved over the years to include a wider variety of jobs is paramount. For example, our last mile delivery drivers are truck drivers, but they only drive within our service area with no overnight trips.

Opening these doors will allow for a larger number of people to be able, or willing, to take on this job.

Are you looking for a job as a delivery driver or want more information about this topic? Contact On Time Logistics today and let us help you!

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