Chemical shippers can overcome a driver shortage

11 April 2011 00:00  [Source: ICB]

Correction: In the article headlined: "Chemical shippers can overcome a driver shortage," please read, in the sixth paragraph: "… one might think the trucking industry would have no problem finding able workers for an average annual salary of $65,000 (€44,537)," instead of: "… one might think the trucking industry would have no problem finding able workers for an average annual salary of $35,000 (€24,600)." A corrected story follows. 

An upcoming driver shortage in the US will be a critical logistics challenge to overcome. What does it take to retain drivers and make them safer and more productive?

Despite the lackluster US economy, the trucking industry faces growing demand for its services.

And for the chemical sector, it is especially important that the transportation services available to clients are safe, consistent, cost-effective and somewhat predictable in a volatile environment.

While technology has diminished some old industry problems, the need for drivers is becoming more than a human resources issue. The dilemma - tight safety and Hours-of-Service (HOS) regulations coupled with the difficulties of living life behind the wheel - is creating an industry-wide driver shortage. Companies across the board are struggling to find ways to address this issue before a major crisis occurs.

 

Dupre Logistics

Finding good drivers is a tough task. Vocationally, truck drivers have a 100% turnover rate. The expense in recruitment is high, which has caused carriers to cut their driver-hiring infrastructure by up to 33% over the last several years.

As hiring practices become more conservative, companies are less able to be flexible with an influx of work and there simply aren't enough drivers to meet the demand.

With US unemployment at high levels, one might think the trucking industry would have no problem finding able workers for an average annual salary of $65,000 (€44,537). But the industry as a whole, and the chemical sector in particular, faces many barriers.

First, with the extension of unemployment benefits, it becomes difficult to entice potential drivers who are collecting reduced earnings. The major force behind dropping drivers is the US Department of Transportation's Compliance, Safety, Accountability (CSA) program's recent regulations that remove drivers who are considered unsafe, set standards for record-keeping and text messaging and require state licensers to verify immigration status.

Additionally, new HOS regulations will reduce daily driving hours from 11 to 10. This alone has the potential to drop driver paychecks by 10%. While these regulations have a tendency to decrease the number of drivers in the industry, they are, more importantly, raising industry standards and increasing safety - a critical factor when transporting chemicals.

SHORTAGE OF UP TO 500,000 DRIVERS
Industry experts are predicting a shortage of 150,000-500,000 drivers by next year. This could cause many carriers to lose business and eventually close up shop due to unmet staffing needs.

 When drivers are paid hourly, they are more likely to drive at a safe speed and get the rest they need to stay alert on the road, thereby decreasing the number of accidents

A gradual decrease in drivers would be considered a difficult challenge for any logistics team. But a severe shortage of drivers during a sudden influx of business or in an emergency situation could not only threaten companies' bottom lines, but in some instances, also could be life threatening. While chemical companies are reticent about the dilemma, they are optimistic about increased safety standards and decreased risk of hazardous chemical spills.

Driver hiring and retention is a major piece of the logistics puzzle. In today's hyper-competitive, globalized economy, businesses that want to remain competitive must find ways to reduce and control their cost structures, without reducing performance. Most companies lose millions of dollars in invisible costs as a result of non-integrated business decisions and ineffective logistics processes.

MOVE THE NEEDLE FORWARD
When designing your own driver retention or recruitment program, here are some important strategies:

Hourly driver pay
Hourly pay is a big component of driver satisfaction. Pay increases may decrease the overall bottom line, but savings in recruitment and retention have proven to be worth the risk taken by compensating drivers in a nonstandard way.

It can be smart business strategy to pay drivers hourly wages instead of by the distance they drive. The reason? Increased safety. When drivers are paid hourly, they are more likely to drive at safe speeds and get the rest they need to stay alert on the road, thereby decreasing the number of accidents.

Driver hiring and retention is a major piece of the logistics puzzle 

This pay structure should be viewed as a quality-control initiative - one with benefits that far outweigh the cost to the bottom line. Hourly drivers feel they are paid for all that they do, including pretrip inspections, wait time and unloading.

Having drivers clock in and clock out puts an emphasis on the quality of work from start to finish, regardless of whether the truck is in motion. A driver's overall compensation is often higher than counterparts who are paid by distance. This equates to better, happier drivers who are willing to slow down and approach tasks as part of a team, which in turn, translates to safety on the highway.

Top-notch technology
Using a state-of-the-art automated driving decision support service that provides real-time feedback and integrates with comprehensive online visibility, can allow you to easily track drivers en route.

This can empower drivers and fleets to reduce crashes, improve fuel economy and reduce overall vehicle operating costs. These systems can continuously measure and analyze maneuvers that impact safe driving, fuel efficiency and emissions, giving driver-specific feedback accordingly.

Constant reinforcement motivates drivers to sustain behavior improvements. Fleet management and risk and safety professionals gain complete visibility into driving behavior and are provided with easy-to-use tools to help drivers achieve measurable safety and fuel-efficiency goals.

Electronic logs
Efforts to increase productivity and driver safety by utilizing new technology can pay off with the use of an electronic log system. The electronic system replaces the traditional paper log, allowing for better accuracy and fewer distractions, resulting in increased safety. Both drivers and management have communicated positive feelings and results about the in-cab technology.

The benefit most commonly reported by drivers is the increased simplicity of using the system. Drivers are happier because it allows them to focus on driving without the many complications of having to keep a paper log. "It allows us to shift our focus from keeping an accurate log to being fully engaged driving and working with the customer," says one driver.

Not being a boss, being a leader
The employer-employee relationship should be one of partnership. Great organizationsare made up of great people who deservegreat leadership.

By allowing employees to learn and seek leadership roles, they stand ready to meet changing industry regulations while continuing to improve safety and provide a stable work environment.

Thinking ahead and striving for continuous improvement is critical. Any opportunity to improve accuracy, efficiency and the safety of drivers should be taken.

The logistics industry will continue to evolve and bring changes, and these should be addressed in a proactive manner. Providing drivers a stable career while serving clients safely and efficiently should be a prime goal.

Reggie Dupre, CEO of Dupre Logistics, founded in 1980, is a member of the American Trucking Association, National Tank Truck Carriers, and has served on the advisory board of the Trucking Profitability Strategies Conference, University of Georgia.

Tom Voelkel is president and chief operating officer of Dupre Logistics, accountable for achieving the objectives of the annual plan and the long-term strategic vision. He champions the AIM for Safety Stewardship Team and the Servant Leadership Process.


Author: Reggie Dupre



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