More regulations, fewer drivers

By Advance Business Capital

 Like the other plights, this one has no short-term solution. The industry will have to muddle through a prolonged “driver build cycle” (the time it takes to turn recruits into professionals) until it catches up with capacity, probably just in time for the next crisis.

 Unlike the nosedive in freight, though, this predicament was not only foreseeable but addressable. Any actuary could have predicted that the first batch of baby boomers would be retiring this year and for several years to come. Companies, however, were complacent. They anticipated handling this shortage as they had past ones: (1) re-hire the fired and (2) scoop up driver school graduates by the netful. Some would make it, some not. Things would work out.

CSA Puts You in the Driver’s Seat

Not this time. CSA has changed the rules, but before we get to that, let’s take a look at the stock of first-in-line hireables, the unemployed but experienced. There’s a lot out there, but most of them are marginal prospects. Recession-battered companies laid off their weakest drivers, not their best. The ones waiting in line have black marks or low productivity scores, or maybe their “experience” is wafer-thin. (And, sure, this pool also includes some fine drivers, but not enough to fill the gap.)

In the past, a prospect’s safety record wouldn’t have made much difference; that is, so long as it fell within the Federal Motor Carrier Safety Administration’s SafeStat guidelines. What counted most was years behind the wheel, or to be more specific, “current verifiable Class 8 experience.” But FMCSA is replacing SafeStat with CSA (long form: “Comprehensive Safety Analysis 2010”). CSA not only has stricter and broader guidelines than Safe-Stat, it’s designed to be a public measure of the company’s own safety record.

Wages and Rages

This is a happy turn of events for good drivers but a sour one for almost everyone else: less-than-good drivers, trucking companies, shippers and ultimately consumers. Drivers with outstanding records will find themselves courted by companies eager to push up their CSA average. Those rare fellows with a million miles and no accidents (like GetLoaded contributor Tim Brady) will suddenly be rewarded with more than a photo-op handshake with the company president.

 They deserve it. Ironically, trucking companies themselves have had a lot to do with the driver shortage. According to a study by Morgan Stanley, in the last two years companies have reduced driver pay by 6.6%. This was largely a reluctant cost-cutting response to the recession but its effect has been to alienate some drivers and discourage potential ones. (And if you don’t think there’s driver resentment on this matter, dig out your favorite trucker mag and read the Letters to the Editor – and those are just the ones that are printable.)

The New Metric

For the last several years shippers have enjoyed a buyer’s market, but those days are fast coming to an end. The driver shortage and out-of-service vehicles will drive up rates, but for those very same reasons companies will be unable to take full advantage of sudden demand. Meanwhile, shippers will pass on rate increases to consumers.

In the near future shippers will take note not only of a company’s rates and routes but its CSA score as well: the safer the company, the safer your freight. If trucking companies want the competitive advantage of a high CSA, they’ll have to pay more to attract superior drivers. Merit and not just mileage will be the new hiring standard. As Gordon Klemp, president of the National Transportation Institute, says in a recent issue of Transport Topics, “Drivers’ CSA performance will become the major metric in a driver’s earning power.”

Better Money, More Headaches

For you drivers out there, that’s the good news. For years they’ve been telling you to pay attention to the road; now you’ll actually make money for it. The bad news is, it’s just one more stressor. We’ll pay a hundred bucks to the first guy who hears his dispatcher say, “Drive safe and don’t worry about being a little late with your load.”

This story was drawn from articles in the Journal of Commerce, eTrucker and Transport Topics.

This article is provided as a service for truckers and everyone in the trucking industry by Advance Business Capital. ABC is the first and only factoring service designed by truckers for truckers. We provide innovative financial solutions exclusively to For-Hire truckers and Freight Brokers and are proud to be the first factoring company to receive the P3 (Preferred Platinum Provider) endorsement from the Transportation Intermediaries Association.