The coming driver shortage: How it will impact the economy (and what can be done to solve it)

Riker Danzig-Sobel panel offers take on transportation industry, including use of autonomous vehicles

By Tom Bergeron
Morristown | Apr 2, 2018 at 7:15 am

Seemingly everyone has heard about the idea of driverless trucks and drones disrupting the shipping industry – but most people have no idea the industry is facing a severe driving shortage that not even the introduction of disruptive technologies can solve.

That was one of the biggest takeaway of last week’s Transportation Trends morning seminar sponsored by Riker Danzig and Sobel & Co. at the Hyatt Regency in Morristown.

Commercial truckers — an obvious key, but perhaps an unappreciated component of the booming logistics sector in the state — are facing a shortage of nearly 1 million drivers in the next 10 years.

Ron Leibman, a partner at Riker Danzig and the co-chair of the firm’s transportation and logistics group, said the coming shortage cannot be disputed.

“You can go to many different sources and the statistics will change … because they are measured differently,” he said. “The one thing everyone agrees on across the board is that there is a huge driver shortage and there’s going to be a bigger one if we don’t make substantial changes.”

The ramifications, Leibman said, are huge.

“If that doesn’t happens, it’s going to drive prices up and it’s going to really hurt this economy,” he said. “Because if can’t move it, you can’t sell it.”

Leibman said the situation is not getting enough attention because, so far, consumers have not been hurt by it. That too, he said, may soon change.

“They are taking it in the margins,” Leibman said of retailers. “There’s going to come a time when prices are up, where the stores are not going to be able to give you what you want.

“It can only go for so long. I can tell you also that there are contracts that carriers, brokers (and others) have that are long term. Those contracts call for a set price rate. Those companies are eating it themselves, what we’re beginning to see is people breaking their contracts, saying, ‘I just can’t do this anymore, go ahead and sue me.’

“I think you are going to begin to see an increase (in cost) in consumer goods”

Solving the problem is not easy.

Even more money — or the raising of what could be considered low wages (less than $20 an hour) for a job that involves a lot of heavy lifting and takes driving away from their homes and families for long stretches —would not be a quick fix, the panelists said.

And the potential of coming disruptive technologies only hurts the industry.

Michele Brown, CEO and president of Choose New Jersey, said the industry needs to enter these changing technologies into the equation when it recruits new drivers.

The industry has to ask, she said, “How do I address the shortage in a way that makes this an attractive job?”

“And how do I convince the millennial and younger population that technology is not going to take over their job in the next 10 years without giving them some kind of out for professional development that will then take me out of truck driver mood and give me the potential for forward advancement in an industry that’s changing?

“Is there continuing education? Is there we’re going to change you in technology that will allow you to work in a different part of the industry that doesn’t involve back-breaking physical labor?

“That’s something that I don’t think the industry has even tried to address.”

Brown would love to see industry work with existing organizations, such as the New Jersey Manufacturing Extension Program and the state’s community colleges, to create packages that would be appealing to a next generation of workers.

“(We can) attract a new population by saying we employees will help you get your associates degree by helping you train for this commercial driver’s license,” she said. “And by giving you a good job that in the future has opportunities beyond what you’re doing in your first couple of years.”

Sobel’s Michael LaForge said the reputation of longer-haul commercial drivers needs to be addressed as well.

“They are viewed as commodities,” he said, as opposed to drivers for FedEx and UPS, who are considered customer service representatives who interact with customers on a regular basis.

And Brown said industry leaders need to understand the next generation of workers is not necessarily in it for the long haul.

“You have to reorient the entire industry not to think that somebody with a commercial driver’s license wants that job for 40 years,” she said.

This only leads back to the idea of more disruptive technologies. But those, the panelists, said come with risks.

Insurance issues — and questions about air space — seemingly have slowed the idea of using drones for deliveries.

Sobel’s Chris Young said he expects autonomous vehicles to start making an impact in the industry soon, despite the recent crashes of test vehicles.

“Another long-term trend, I’m not sure if this is 2018, 19 or 20, (but) we do see driverless vehicles continue to play a part despite the most recent unwelcome news with Tesla,” Young said. “They are continuing to make advancements with driverless cars. We know that they are continuing to make pushes in driverless trucks. Will that play a role in (2018), probably not, in 19 or 20? Probably.”

Leibman hopes the days of driverless vehicles can be put off for another generation.

“I hate them, personally,” he said. “I think as somebody who has (been in) the transportation profession for 40 years, I think we have a public trust that we have to meet. And I want to know when my kids are driving down the New Jersey Turnpike that the truck next to them is safe.

“If you look at the truck driving industry as a whole, the safety record is amazing. I’m not sure how much autonomous trucks are going to change that.

“This drive to technology. This idea that technology is always good, technology is always better. And as Google has shown, technology is certainly profitable. I worry that the profit motive is running ahead of what we are technologically capable of doing. My timeframe for this kind of truck is probably 20 years.”

The coming driver shortage — and its impact on the economy— doesn’t figure to allow that much time.