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US trucker shortage eases – but brakes are on in the market

Logistics professionals are returning to the corporate sector. Truck drivers who struck out on their own during the pandemic are signing up with trucking firms again, and operations staff are applying for jobs at forwarders.

The labour shortage that hobbled many firms over the past couple of years is abating, as the market is facing a slow run.

The shortage of truck drivers, widely seen as one of the biggest bottlenecks in logistics over that period, has eased and the American Trucking Associations estimates the US trucking sector was 78,000 drivers short last year, which is down from the record-setting 80,000 shortage of 2021.

In 2021 the pool of drivers employed by trucking firms shrank as high freight rates encouraged many drivers to strike out on their own. The slowdown in volume in the second half of 2022, combined with rising fuel and other costs, forced a growing number of those would be entrepreneurs to seek employment again.

A survey published in November by the Professional Driver Agency ,in conjunction with recruitment specialist Conversion Interactive, found 22.1% of drivers had clocked lower mileage over the past six to 12 months as a result of reduced freight volumes, while another 27.2% reported fluctuation in their mileage, and another 5.5% saw mileage down for reasons other than less volume.

And now forwarders are also experiencing a resurgence in job applications.

“People are knocking on doors again,” said Helmuth Berchtold, head of the US arm of logistics recruitment specialist adi Consult. Over the past two years he found it difficult to present suitable recruits to corporate clients, but now has candidates available – although highly qualified sales people remain hard to find, he added.

The speed at which the market turned from buoyant demand to drastic slowdown has changed the employment outlook almost overnight. For example, instead of scrambling to find staff for the peak season, Walmart laid off 1,500 employees at a fulfilment centre in the Atlanta area in December, after Amazon confirmed in November it would let 10,000 go – about 3% of its white-collar professionals in corporate and technology roles – and FedEx Freight offered drivers a $300-a-week incentive to accept furloughs from early December until March.

And as their margins shrink, logistics firms must recalibrate their pay structure for recruits – ironically at a time when inflation is eroding earnings. This is particularly challenging when it comes to highly qualified sales personnel, who are still hard to find. The base salary requirement in this bracket is in the $125,00-$130,000 range, with top professionals asking for $150,000 before commission, Mr Berchtold said. “It used to be about $75,000, before the pandemic.”

The spike in salaries during the past two years was relatively easy for forwarders to absorb while freight rates were at stratospheric levels. As margins shrink, these pay levels are unsustainable, he said.

Meanwhile, firms that offer a career path are becoming more attractive again. Before the pandemic, everybody was looking for courses that would help employees develop their skills, but in the Covid era the focus shifted to a “come-and-grab” approach, Mr Berchtold said. They were saying ‘I want $20,000 more. I don’t want to work in an office’.

Credit The Loadstar by By Ian Putzger

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