FROM LEAH’S DESK: LOOKING BACK AT 2021 AND HOW IT WILL IMPACT THE FUTURE OF THE TRUCKING INDUSTRY
With another year of supply chain disruptions and industry scrutiny behind us, I couldn’t help but notice a few issues that popped up continually. As the year draws to a close, I want to discuss a few of the recurring themes of 2021 and how I expect them to impact trucking in 2022.
I said 2020 was the longest, yet fastest year of my life but where did 2021 go? Our team hasn’t stopped since August of 2020 and all analysts lean toward continuation in the new year.
Let’s take a look at the top concerns shared with us and how to roll with the punches.
The Worker Shortage
As a recruiting coach, this issue is top of mind for me. Job openings skyrocketed, exceeding 11 million openings by the end of 2021. For every unemployed worker, there were 1.5 job openings. Some sectors were hit harder than others (I’m looking at you, service industry), but the ripple effect is going to impact recruiting in trucking.
Which brings me to my first prediction for 2022. Unfortunately, I believe recruiting will remain a challenge next year. This is because worker shortages in non-trucking sectors can still drain the pipeline. The most recent Job Openings and Labor Turnover Survey showed that 4.2 million workers quit their jobs in October. With other industries, including construction, warehousing, and even food service looking for workers, recruiters will have to work that much harder to lure new drivers.
I recommend working with The National Transportation Institute to examine your offerings, including wages and benefits. Together, we can tweak your marketing messages to highlight your unique advantages in order to pull in more prospects.
Wages Are Rising
This correlates strongly with the ongoing unemployment situation. With so many workers quitting their jobs, employers across industries were incentivized to raise salaries. Data from the Conference Board shows that, on average, companies are setting aside 3.9% of their payroll budget for raises in 2022. In addition, there’s been a rash of signing bonuses, raises, and referral bonuses across industries. All of this is coupled with media reports that these “substandard adjustments” don’t cover the impact of inflation makes your internal messaging challenging.
I don’t see this changing any time soon. Which means that in the future, the trucking industry will have to adapt. My recommendation is to review your company’s offerings to see where you have room to make changes. What’s going well, and where is there room for improvement?
Fortunately, you don’t have to guess at how your pay and benefits perform relative to the next guy. By utilizing The National Transportation Institute’s industry surveys and consulting services, you can get a birds eye view of how your offerings stack up.
Ongoing Equipment Shortages
It wasn’t only workers that were in short supply in 2021. There wasn’t enough equipment, either. Notably, a semiconductor shortage created an influx of Class 8 backorders, and led to an awful lot of scarcity in the used truck market, too. In short, it’s harder to produce new trucks, which makes it harder to find trucks and truck parts, whether new or used.
This is a major headache for trucking executives. But they aren’t the only ones who are struggling. Truckers themselves also have a tough time when there is a shortage of equipment. This is because of the impact that equipment shortages have on repairs and maintenance. Breakdowns are inevitable, but when there’s less available equipment, it’s going to take longer to get back on the road. And less time driving means reduced earning capacity.
Our hands are tied with this one. I anticipate the situation easing eventually as more chip factories are eventually built in the United States but delays and shortages are expected into 2023.
In the meantime, trucking firms should take a two-fold approach. First, I recommend reviewing maintenance procedures related to the ongoing parts shortage. Even more importantly, there must be a plan to keep drivers moving, or match their earnings in situations beyond their control. Drivers tell me that unpaid, unproductive time is the most common trigger for aggravation and exits so get ahead of any policy gaps now.
A Wave of Retirements
It’s not a secret that many drivers are on the older side. Experienced drivers average 54 years old and new entrants come in at 38.
This means that large swaths of the current driver pool will continue to wear out or age out in the coming years. Covid accelerated this process. An estimated 65% of baby boomers chose to retire when the pandemic hit.
Truckers are not immune from it. As restaurants and other facilities closed, thanks to the pandemic, it induced more drivers to consider early retirement or movement into a different profession. We’ve got a lot of work to do to reverse the trend.
This is another situation that the trucking industry did not ask for, but will have to contend with in the future nonetheless. I recommend redoubling efforts to recruit younger drivers, as well as other underrepresented demographics. I serve on the Board of Directors of two associations working to support our industry to adjust this curve and there are many opportunities for you to get involved in efforts across North America as well as in your own community. The Women In Trucking Association will start to utilize our ambassador to promote opportunities in underserved communities in 2022, along with appearing at shows, job fairs, conferences and trucking schools. The Next Generation in Trucking Association is working with high schools across the country to promote career technical education while our kids are still in school and transition interested candidates right into continued training and programs.
The Pandemic Marches On
Disappointingly, it appears that the pandemic will continue into 2022, and likely even longer. Covid variants continue to pop up along with breakthrough cases in the vaccinated population.
This means that some drivers will inevitably have to take time off if they, or a loved one, falls ill. The silver lining here (if one can call it that) is that over the past two years, I have seen numerous companies embrace a more empathetic approach towards wellness and work-life balance. It serves all of us well to recognize the humanity of our employees. I hope to see that continue into 2022, and beyond.
A lot of forces colluded to create an incredibly tight trucking environment in 2021. No doubt conditions were stressful, but I’m incredibly proud of what my company and our industry were able to accomplish. I look forward to guiding the future of the trucking industry forward in the coming year.