The lack of truck drivers is the most worrisome constraint on U.S. economic growth at the moment. Should we limit our hiring decisions of licensed, professional drivers by offering inadequate wages?
“The U.S. Is Running Out of Truck Drivers,” read the title of a recent Bloomberg article. Though not mentioned in this article, the ag industry — meat and livestock, in particular – is more dependent on the services of the trucking industry than almost any other commodity. A shortage of truck drivers is threatening its very subsistence.
The report suggests that we will have a shortage of skilled and trained labor for the foreseeable future. Truck drivers are a different matter, because of how crucial freight is to the U.S. economy. For a variety of reasons, the lack of truck drivers is the most worrisome constraint on U.S. economic growth at the moment.
Without enough trucks on the road, some combination of adverse conditions is going to happen. Shipments will be delayed, and producers will have to pay higher prices to get goods to market.
The U.S. Bureau of Labor statistics projects openings nationally for heavy-duty and tractor-trailer drivers to increase 11% between 2012 and 2020. The trucking industry association expects the industry to be short about 175,000 drivers by 2024.
Higher paying options for this type of skilled labor means more drivers are leaving the profession, and fewer people are pursuing it as a career. The level of employment in the truck transportation industry is virtually unchanged since the middle of 2015.
The trucking industry is unique because it’s the lifeblood of moving goods around the country, representing 70% of the nation’s freight volume by weight. Compare this with those days back in history, before the advent of our modern-day highway system when it cost the same to move a ton of goods 30 miles inland as it did to cross the Atlantic.
We’ve come a long way since that point in time in producing an efficient system of transportation, but for companies to stay competitive, there is always a driving force to cut costs. Unfortunately, that force often focuses on labor costs — the primary cause for the shortage of truck drivers.
Because transportation cost is such a signiﬁcant factor of consideration in determining the highest valued outcome of a load of livestock, I took it upon myself to interview the most knowledgeable person I know in the trucking business, Mr. Lavern Williams. (He will be further acknowledged in the Pony Tales column.)
When asked about the signiﬁcance of wages when addressing the total cost of transportation, he said it was a significant concern, and probably not justiﬁed, as it represents only a fraction of the total cost.
To illustrate his point he compared the price of a bottle of water when hauling the average 50,000 lb. commodity load. The example of a case of 16.9 oz. bottles weighing 30 lbs. = one pallet of 72 cases, equaling 2160 lbs. If you put 23 pallets in a trailer, that equals 39,744 bottles of water. So if you convert this into the cost of wages — a driver earning an hourly wage of $20/hr., putting in a 14-hour day amounts to $280.00. This figure translates into a driver cost of .007 cents/bottle to transport a load of bottled water. As insigniﬁcant as this may seem, consider a $10.00 per hour raise that increases the cost per bottle by .003 cents, or a total of .01 cent per bottle.
Though not a load of livestock or any other farm commodity, he makes his point, in my opinion. Should we limit our hiring decisions of licensed, professional drivers by offering inadequate wages? Would an additional $10.00/per hour change the whole landscape of professional, available people?
Or to put it in the words of Mr. Williams, should a company not be able to survive with the added expense, which in his opinion is necessary to add to the cost of production. He acknowledges that the additional price has to be absorbed in some manner, but does it always have to be at the expense of the worker. How about the CEO of the company making over 15 million dollars a year? (This amount is based on findings of the Economic Policy Institute when comparing the wages of 350 select companies.)
This is more than 270 times what the typical worker makes. This same report showed that a healthy economy should be 40:1, which should stimulate the velocity of money, giving us back a healthy economy, provided we get back to 60 seconds = 1 minute, 16 oz. = 1 1b.; not the 271:1 that currently exists.
Where are our moral and ethical values? Why so much bickering and greed? Let’s have policies of equality reasonably based on the math and science of common sense.