Webinar panel says best tank truck drivers need to be compensated more lavishly and treated as valuable resources

TRUCK drivers need to be courted through sophisticated searches, compensated more lavishly, and treated as equal partners and valuable resources, according to a panel on a webinar hosted by Bulk Transporter and National Tank Truck Carriers (NTTC).

“If we don't recognize that the driver is not just a commodity or something you can go out and get any day of the week, we're going to be in trouble,” said Steve Rush, president of Carbon Express Inc and 2010/2011 NTTC chairman. “We can't allow drivers to go the way of the gas station attendant. Drivers are not the problem. It's more at the top. Equitable compensation is long overdue.

“We have to attract them and take care of the ones we currently have. Not only do carriers have to recognize that, but it also applies to shippers and receivers. All of us have a share in this. We have to improve working conditions, and we can't put more burdens on them. They have enough on them now.”

The panel also featured John Conley, NTTC president; Greg Hodgen, president of Groendyke Transport Inc and current NTTC chairman; and Barbara Windsor, president/chief executive officer of Hahn Transportation Inc and 2010/2011 American Trucking Associations chairman.

NTTC tagged 2011 as The Year of Tank Truck Driver Sustainability. Conley said “sustainability” is a term that is much like “quality” was 15 or 20 years ago — a term that is here to stay. He said the dictionary definition — “an attempt to provide the best outcomes for human and environments both now and in the indefinite future” — doesn't really go far enough to portray the significance of driver sustainability in this industry.

“One thing NTTC is pushing is that while we and shippers focus on keeping natural resources for this generation and future generations, we also have to look at the truck driver as a resource that needs to be sustained,” he said. “Professional drivers are a human resource as much as clean air and water are environmental resources.

“Baby Boomers are getting older and getting out of trucks. We just went through a recession in which a lot of drivers probably left the industry, and we have to entice them to come back. We're looking at turnover rates of 75% for some fleets. We're probably at 30% overall for tank fleets, but what kind of industry can look at losing one-third of its workforce every year?”

Conley said the driver shortage may be the most critical factor in the future success of tank truck fleets. Even with high national unemployment above 9% and despite hefty hiring and referral bonuses, the driver population is shrinking at an alarming rate.

Hodgen said negative generational demographics have played a large role. The entire industry is short 188,000 drivers this year, according to an estimate by FTR Associates. Carriers were downsized during the recession, drivers exited the industry, carriers were slow to invest in their fleets, and the quality and quantity of applicants has declined.

“If you look at truckload driver employment, there was an incline in the early '90s, and then when there was a dramatic increase in drivers from '04 to the peak in '08, we had a lot of expanding employment,” Hodgen said. “Then there was a dramatic decline in '09. Peak to trough was a change of 18% — and that's a huge difference in the resource of truck drivers. Today, it's still down 8%. There are a lot of reasons we've been told. CSA (the Compliance, Safety, Accountability program) is keeping some from entering the environment. Hours of Service has an impact. If you think about it from a hazmat perspective, starting with somebody who has to be 23 years old in order to get into the industry, we're not catching people coming out of high school.”

Boosting pay

He said average driver pay was $48,000 for 2011, with the tank truck industry paying a modestly higher average. Compensation ranges from $35,000 to $75,000.

“The gap from mileage is typically 10 cents per mile from high to low pay, but today the differential from the top quartile to the bottom quartile is 16 cents per mile,” he said. “There are estimates of up to a 30% increase by 2014. That's a concern. That can't be sustained without a substantial increase in revenue.”

He said that in the early 1990s, pay in trucking ranked with the construction industry, and there was a substantial gap between them and manufacturing. But by 2000, trucking really started to lag, and construction pay got closer to manufacturing. By 2010, trucking pay was virtually the same as in manufacturing.

“Not only have we lost ground, but trucking is 70 hours a week, irregular hours and routes, and living in a truck, compared to someone who can clock in and out in manufacturing jobs,” he said. “There's not an attraction from an earnings standpoint to get out of manufacturing and into a trucking job.

“A recent analysis shows that as the economic cycle goes up and down, drivers' pay flattens out or doesn't keep up with cost-of-living increases. It was better in 2005 to 2008, before declining in recent years. Buying power goes down and there's not the same disposable income to spend on things they need. That's not good for the industry. Whenever things get tight, the industry is not good about passing along pay increases relative to revenue. The driver really pays the burden of the impact. That's another reason our industry has a black eye in attracting people.

“If we expect new people to enter this industry and deal with traffic and distracted drivers, there's no real attraction that this is a career where wages have gone up. I think this has to change — and change dramatically.”

Hodgen said that because the tank truck industry has invested so much in training and honing drivers' skills, the turnover issue is even more acute.

“We tell our drivers a lot, ‘Not everyone should do the job we're doing — only the elite driver should know how to handle the physics of liquid inside a tank and handle the hoses and paperwork that comes with hazardous material,’” he said. “We want the best drivers driving a tank truck. So turnover is almost a double whammy. Even 30% to 40% is too high in the tank truck world. We're constantly trying to come down from that.”

Conley said it costs $7500 to recruit, train, and put a driver in a tank truck, which prompted Windsor to add: “It's also frustrating if you have spent hours working with someone and they say, ‘This isn't what I want to do. I'm not comfortable with this product after all this training.’”

CSA, EOBRs

Windsor said the primary obstacles include:

• CSA (Compliance, Safety, Accountability), a complex grading system for carriers and drivers. Fifty-two percent of fleets in the CSA system currently exceed federal intervention thresholds.

  “We all believe in CSA, but it's still a work in progress,” she said. “A new driver said to me, ‘I don't want to be written up. My lights work, but I went over a pothole and it shook a light bulb out. The inspector wrote me up for it.’ They're not talking with our drivers as partners. It's, ‘Here's another point against you.’”

• EOBRs (electronic logs, event recorders, GPS, communication).

  “I talked to a younger driver and asked him, ‘What do you think about trucking being your career?’ He said, ‘Ma'am, I like what I do, but I'm concerned about it long-term.’ I said, ‘What do you mean, long-term?’ He said, ‘I'm wondering what's going to happen with hours of service.’ These drivers are reducing their daily driving or daily on-duty or maximum of what they're going to do. Ultimately, at the end of each week, they're going to make less dollars, so they're looking at hours of service as taking something out of their pockets.”

• The generational profile. One of every six drivers is 55 or older, and there's a lack of appeal to upcoming generations.

• Lifestyle challenges for drivers. Time away from home and family, irregular work hours, irregular pay (no loads, no pay), hard work, image issues (no longer considered “White Knights of Highway”), disintegrating infrastructure, disappearing rest stops and parking, and increased medical requirements.

“They're just like us — they want to go to their kids' ballgames and piano recitals,” Hodgen said. “We really need to think of them as people like us. They want a regular paycheck and consistency in work.”

Said Windsor, “We have to help them recognize it's a career, not just a job or a paycheck. We can get them a good livelihood if we let them know it's not just from Point A to Point B.”

Hodgen said the keys to carriers' successful recruiting include: rethinking yesterday's business model by looking in the mirror first and treating drivers as partners; and identifying qualified candidates by targeting advertising to non-traditional outlets and emphasizing the benefits of today's technology.

“Drivers don't want to work those long 14-hour days,” Rush said. “Who can blame them? One of the things we've done (at Carbon Express) is advertise and let them know that we are on electronic logs. The past weekend, I did my first advertisement saying exactly that. In one area, I normally get 30 to 50 responders, but this time I got six. In two new areas where I thought I'd get a lot of interest, I did not. But strangely enough, almost all the ones I got I would consider hiring. That told me good guys want good jobs, and they want to be treated right. Hours of Service are big for us. For those of us on electronic logs, we know what we can do with them. Those who aren't have their head buried deep in the sand. We've been able to communicate to shippers and receivers that we are on electronic logs, and what it means.”

Decreasing pool

Hodgen and Windsor each said that only 8% to 9% of applicants actually qualify for jobs at their companies.

“Some don't have a CDL,” Hodgen said. “Some drivers have job-hopped — 15 jobs in the last five years. Some applicants don't understand we haul hazmat. It's just a variety of issues. We do some personality testing to see if they would be a successful fit for the job.”

Rush said that with the current operating environment making retention more challenging, companies should ask for and act on driver input, develop wellness programs, and recognize, reward, and respect drivers.

“We let them know that whatever they're doing, they're getting paid for,” he said. “If we have a driver from an outer terminal and he's stuck here for a couple of hours, he's paid for that. You can't do that if you're paying percentage. We make sure he's recognized. When he brings us additional drivers, he gets a bonus. We've found our best recruiters can be our own drivers.

“To do that, we've increased their pay. This year, we've had three different increases. In December (2011), the last of our sleepers tractors were retired. We put our drivers in a hotel. When I tell that to our shippers, it becomes a very positive message.

“I believe the leaders in this industry have to look in the mirror and ask themselves, ‘Am I treating drivers the way they should be? Or am I counting the bottom line?’ A plague in this industry is lease-purchase. It paints a false picture and gives them a rainbow with a pot of gold they can never reach. Times are changing, and are changing fast.”

Said Hodgen, “We realize there hasn't been a good image of drivers in a few years. America needs to know we're out there and they're going to share the road with us. It's up to the owners of companies to elevate the image and thank our drivers for what they do. I'm spending more one-on-one time with drivers than ever.”