Dive Brief:
- While truck drivers represent 46% of the Canadian logistics industry, they account for 63% of its job vacancies, according to Trucking HR Canada, a non-profit organization focusing on HR solutions for the trucking workforce. The total number of truck driver vacancies in Canada has increased more than 138% between 2016 and the first three quarters of 2019, escalating from 8,600 to 20,500 during this timeframe, the organization said in its Labor Market Information report.
- Canadian truck-driver hiring is taking longer than anticipated as HR professionals "are being bogged down with increased recruitment pressures and frustrations, and by more complex compliance issues," the group said in a March 11 news release. The shortage caused roughly 3.1 billion Canadian dollars ($2.2 billion) in lost revenues in 2018, the report said.
- Without action, vacancies are expected to soar to 25,000 by 2023, an increase of more than 25% from 2019, the group found. The numbers echo U.S. driver shortages, which stood at about 60,000 at the end of 2018, according to the American Trucking Associations.
Dive Insight:
Canadian trucking is intertwined with U.S. trucking.
Many cross-border trucking companies such as Bison Transport of Winnipeg, Manitoba, bill themselves as North American fleets. A few of the largest North American fleets, such as TFI of Montreal, are based in Canada.
Thus, a driver shortage in Canada could have a serious impact on a number of U.S. industries. U.S. goods and services trade with Canada totaled an estimated $718.5 billion in 2018, according to the Office of the U.S. Trade Representative (USTR). Top imports from Canada were mineral fuels, vehicles, machinery and plastics, according to USTR. Top exports to Canada were vehicles, machinery, mineral fuels, electrical machinery and plastics.
But sure-fire solutions to the problem are elusive. One fix could be to pay long-haul drivers hourly, according to the report's survey findings.
"While mileage pay remains the most common type of compensation for long-haul truck drivers, the survey suggests that a substantial portion of long-haul employers are transitioning away from mileage pay," the report said. "Over the past two years, more than one in five (21%) long-haul employers reported having changed the pay structure for their truck drivers, with three-quarters of them abandoning mileage pay."
Hourly rates make it easier to attract and retain truck drivers, particularly younger ones, the report found. At the same time, employers said an hourly rate allows them to better capture the accurate hours worked by truck drivers, which makes it easier to calculate overtime pay.
Salaries are also the first recruitment and retention tool in the U.S. toolbox. In July 2019, ATA chief economist Bob Costello issued his annual report on the shortage for 2018. He found companies began to raise pay while also issuing a guaranteed minimum paycheck.
"The natural market reaction to any shortage is that prices rise," Costello wrote. "In this case, the price is driver wages, which are again increasing significantly. Most fleets instituted large pay increases in 2018 as the driver shortage hit an all-time high. Many fleets also instituted guaranteed minimum weekly pay so that the drivers would have a more consistent paycheck."
Time off is also a major benefit, Costello wrote. If drivers don't get it, they will not apply for work.
"Potential drivers are often hesitant to take a job that requires so much time away from home, especially at first," Costello wrote.
