Poor conditions and low pay for truckers helped fuel supply chain crisis

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The idea of a national trucker shortage has gained popularity as one reason for the widespread supply chain issues that have crippled the economy over the past year. But some experts say there isn’t actually a driver shortage at all — and that suggesting so ignores the bigger issues within the industry.

Congestion at ports in California continues to cause supply chain delays with ships idling offshore, waiting to unload their cargo, and containers lingering too long at the docks, waiting to be transported by truck or rail. The delays have been blamed on a number of shortages, including equipment like chassies, shipping containers and truck drivers.

Calls for new drivers continue, citing a report from the American Trucking Associations, which said the shortage will hit a historic high of 80,000 drivers this year.

“We don’t have a truck driver shortage at the ports,” said Steve Viscelli, an economic sociologist at the University of Pennsylvania. “The problem is that these truckers’ time is used so inefficiently. The cranes, the longshoreman labor, all that gets priced and used efficiently.”

In the port ecosystem, truck drivers are paid by the load and not the hour, making them some of the most vulnerable workers, according to Viscelli. Other port workers receive overtime pay and belong to unions, but truckers are classified as independent contractors. As such, they aren’t considered employees and don’t receive any of the benefits or protections associated with that status.

“Truck drivers are the shock absorbers,” he said. “If the cranes are running behind, you can just keep the trucker there idle. You can back them up for hours because they’re not being paid.”

Because of how they’re classified and compensated, truck drivers are forced to wait around until they’re needed, at no cost to the shipping companies. That means there’s little incentive to change the current conditions and use them more efficiently, according to Viscelli. 

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Because of how they’re classified and compensated, truck drivers are forced to wait around until they’re needed, at no cost to the shipping companies.

In contrast, efforts to reduce inefficiencies in other areas of the ports are ongoing and have been successful. For instance, in October, the ports of Los Angeles and Long Beach announced a plan to impose fines on shipping companies who leave their cargo on the docks for too long. The promise of fines proved so successful that the ports have delayed implementing them because early compliance led to a 26 percent drop in lingering containers.

If truckers were considered employees, their employers might be less inclined to let them sit idle for hours, since it would cost them in hourly wages and overtime, Viscelli said. Instead, the current trucker-related inefficiencies in the supply chain and at the ports are most severely costing the drivers themselves. 

“They may wait hours to get there, wait hours to get a chassis they can use, and then if the port says ‘No, we don’t want that load,’ that driver who gets $150 per load now has to find somewhere else to drop it, and a six-hour job turns into 10,” Viscelli said. “The system is designed with that flexible free truck driver labor assumed.”

California’s Assembly Bill 5, or AB5, which received strong opposition from trucking companies, would change the classification of many of these truck drivers from independent contractors to employees. The reclassification could provide the incentive needed to make more efficient use of truckers’ time, but the state is currently blocked from enforcing it against trucking companies because of legal challenges. 

For now, truckers continue to be misclassified, according to Veena Dubal, a professor at the University of California, Hastings College of the Law. 

“It’s easier in the context of trucking to maintain the contractor facade because workers can feel independent while they’re driving long distances, and trucking companies can claim they’re independent because they’re not in the cab with them,” Dubal said. “This is precisely the type of job that these employment protections were written for.”

She noted that the hiring entities retain control in trucking even if they claim otherwise. They alone determine where drivers must go to pick up cargo, how much cargo they need to transport and how long they have to complete a job. These companies can also impose ramifications for poor compliance but offload most of the costs to the truckers themselves.

“These owner-operators work for virtually nothing,” said Rome Aloise, president of Teamsters Joint Council 7. “They have to pay for their own trucks, their own maintenance and gas, which is up right now. It’s also fairly common that they’ll need to pay for their own equipment like chassis. In some cases, these guys end up owing money.”

Still, the possibility of small business ownership, independence and financial reward are attractive to many, in particular immigrants, people of color and others seeking promising jobs with low barriers to entry.

Ryan Matsushita, a regional used truck manager at the Inland Kenworth truck dealership, said he has more interested drivers than he can accommodate right now. 

“I literally can’t keep a truck on my lot, I probably tell three to four customers no for every one that I sell,” he said. “We’re sold out for the next 12 months, maybe 24. I’ve had to tell about half of the people who have already signed agreements that we won’t be able to fulfill their order. We just can’t meet the demand.”

Matsushita also touched on an additional way that the ongoing supply chain issues are costing truckers — the cost of the trucks has increased significantly. He said prices were already higher this year than they were before the pandemic, but have shot up in the past three months, spiking by as much as 20 percent: A base-level new truck with just a day cab now costs well over $100,000, and a sleeper cab truck can cost almost $200,000. Used trucks have also recently increased in value by between $40,000 and $60,000. These dramatic price increases fall on the drivers who lease or buy the vehicles, further adding to the strain of the job. 

But the industry wasn’t always this way, according to both Viscelli and Dubal. Trucking used to be much more lucrative.  

“Trucking is a notoriously difficult job, it’s really taxing on the body, it requires people to stay away from their families, be up at really odd hours, it’s really lonely,” Dubal said. “But the people who engaged in it were willing to do so because there was a wage premium. Over the last 30 years, this has increasingly not been the case because of deregulation.”

In the 1980s, conditions in the industry worsened after deregulation essentially turned these steady, well-paying jobs into gig work, a transformation akin to what has occurred in the taxi industry. These poor conditions have led to retention issues, which have been mistaken for shortages, according to industry experts. They maintain there’s no shortage of interested drivers. The problem is that poor conditions and low pay create a revolving door where new drivers very soon become former drivers.

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