Are Truckers About to Get Rich?
By Kyle Stock October 15, 2013
As problems go, the U.S. trucking industry is facing a good one. Thanks to a gushing oil industry and a homebuilding renaissance, everyone needs trucks. The industry, however, is running short on supply—specifically drivers.
Trucking outfits are bristling under new federal rules that drastically constrain how long drivers can stay on the road. Since July 1, truckers have been limited to about 70 hours of driving per week, down from 82 hours. And new rest requirements limit how much they can drive in the small hours of the morning, when roads are relatively empty.
Even before the new rules took hold, capacity was tight. At the height of the Great Recession, truck fleets at transportation giants FedEx (FDX), UPS (UPS), and Swift Transportation (SWFT) had 85,000 more drivers than they needed; today these companies are about 211,000 bodies short, according to estimates by FTR Associates, a freight logistics firm in Indiana.
To make matters worse, crumbling U.S. infrastructure is forcing truckers onto expensive detours. One in nine U.S. bridges is structurally deficient and 42 percent of the country’s major urban highways are congested, according to an analysis in the Wall Street Journal.
Those kinds of problems are hard to picture in virtually any other sector. Imagine a Wal-Mart (WMT) without enough parking, a Google (GOOG) data center too small to speed through a glut of searches, or JPMorgan (JPM) turning customers away because its safes were full.
Bloomberg Industries analyst Lee Klaskow says trucking outfits may need to fork out more money to attract and retain drivers. “If you really want to find people to fill the seat, you’ve got to make the industry much more attractive to the 21-year-old who doesn’t know what he wants to do with this life,” Klaskow says. “Rates now—$45,000 to $55,000 a year".
Stock is an associate editor for Businessweek.com.