Study: Truck Driver Shortage A Blow to Canadian Economy
Ottawa… Canada could experience a shortage of 25,000 to 33,000 for-hire truck drivers by 2020, disrupting not only the trucking industry, but the Canadian economy and ultimately affecting the well-being of consumers as well, according to a new study released by the Conference Board of Canada.
The study finds that tens of thousands of current drivers are approaching retirement age and there are “a very small number of young drivers taking their place.”
The Canadian Trucking Alliance, which commissioned the study titled Understanding the Truck Driver Supply and Demand Gap and Implications for the Canadian Economy, says the findings reflect what the industry has been warning for years – that Canada is on the cusp of a serious shortage of truck driver capacity, which, considering all goods produced are delivered in part by truck, could hamper the Canadian supply chain and drive up prices on store shelves.
“The report quantifies the magnitude of the emerging gap between the supply and demand for professional truck drivers – a looming shortage which could be 14-per cent or more of the entire truck driver population in Canada,” said CTA president and Chief Executive Officer, David Bradley. “It’s understandable that the challenges of the trucking industry aren’t always top of mind in media circles and among decision makers. However, with $17 billion in GDP directly tied to the for-hire trucking industry and the indirect impact being far greater, there’s little question a driver shortage of this size is a threat to the health and competiveness of the Canadian economy and this issue is something we as a nation should start thinking about.”
The study estimates that the total economic footprint of the for-hire trucking industry was almost $37 billion in 2011, resulting in an economic multiplier which is “significantly higher than that of many other business services.” Moreover, for-hire trucking supports almost 480,000 jobs in Canada resulting in around $24 billion in personal income which in turn generates $4.2 billion in personal income taxes and $4.1 billion in indirect taxes.
Although the entire Canadian workforce is aging, the Conference Board finds the average truck driver (44.2 years-old, with 20% being over the age of 54) is older than the average Canadian worker (40.2) and the driver population is aging more rapidly than the rest of the labour force. As well, the for-hire trucking industry is faring worse than other sectors, including similar occupations, when it comes to attracting young workers as only 12-per cent of for-hire drivers are under the age of 30.
If productivity improvements are lower than expected in the next seven years, the shortage could exceed 33,000 drivers (not counting private trucking activity). Historically, productivity gains achieved by the highly competitive trucking industry have been quickly passed along to customers, which in turn have been felt by consumers in the form of lower prices for goods, the study notes. However, rising operational costs, increased traffic congestion and delays, more stringent hours-of-service rules in the U.S. and other regulatory challenges mean further contraction of the driver population and “productivity gains in the future will be muted.”
“We generally take the benefits of freight transportation for granted, in part because the system typically works well – at least in terms of making a variety of products available to consumers in a timely fashion,” the study notes. “However, disruptions in freight transportation systems can have a rapid impact, reminding consumers of the value of these services.”
In the face of increasing demographic pressures, a number of factors could help bridge the supply and demand gap for truck drivers, the Conference Board concludes, including: a significant improvement in industry working conditions and wages; mandatory entry level driver training and upgraded licence standards to achieve a skilled occupation designation; a reorganization of trucking activity and supply chains in order to reduce pressures on long-haul drivers and make better use of their time.
Many of those proposals echo the recommendations made by the CTA’s Blue Ribbon Task Force (BRTF) on the Driver Shortage in its landmark whitepaper released last year. The report examined the labour market challenges in the trucking industry and outlined core values that, if implemented by carriers, could help boost the level of professionalism in the industry and alleviate some capacity pressures. The BRTF whitepaper also said truck driving needed to become recognized as a skilled occupation and called for mandatory entry-level driver training and ongoing skills upgrading; paying drivers for all the work they do and making compensation packages more transparent, among other solutions.
“The parallels between the BTRF report and this most recent Conference Board study are clear,” says Bradley. “Professional truck drivers are the industry’s most important asset; the true face of the industry who are deserving of respect. They play a crucial role in the overall economy and in our daily lives. Without them, the gears that make Canada run will simply stop.”