A number of media outlets such as Newsweek recently reported that Sisu Energy, a trucking company in Texas, is offering truck drivers "$14,000 a week — $728,000 a year" because of a "nationwide shortage of truckers." Not a bad career pivot to make given that would be earning about the same amount as a mid-level investment banker.
The issue with sweeping statements like this, however, is that it fails to take into account the whole picture. In an interview with NPR, Sisu Energy conceded that while the most productive drivers can earn up to $14,000 a week, they have to cover all the costs of their truck, fuel, insurance, equipment, repair, and maintenance.
Further, even after a whole week’s worth of loads in West Texas, these truck drivers don’t work all 52 weeks of the year. This means that these truck drivers’ yearly take-home pay is not even remotely close to $728,000.
Beyond outlandish claims such as this, however, is there really a truck driver shortage?
"There is no shortage," says Todd Spencer, the president of the Owner-Operator Independent Drivers Association. His organization represents more than 150,000 mostly self-employed truck drivers around the United States.
"It's just simple math. If every year there are an excess of over 400,000 brand-new drivers created, how could there possibly be a shortage?"
Spencer argues that the issue lies not in getting new drivers, but in retaining existing ones.
According to the American Trucking Association, the average annual turnover rate for long-haul drivers is over 90%. To put this in perspective, if a trucking company has 10 drivers, they’ll have to replace 9 of them by year’s end.
This ultimately boils down to the working conditions truck drivers find themselves in.
Because they’re only typically paid per mile driven, any time they spend resting or dealing with mechanical issues, they aren’t making money. If they’re sick, they aren’t paid. Moreover, they're not compensated for the significant time it takes to load or unload their trucks.
Drivers sacrifice their health. They work 70+ hours a week, sit down for hours on end, and eat junk food on the road. The job is also dangerous: Truck drivers are 10 times more likely to be killed on the job than the average worker.
Michael Belzer, an economist at Wayne State University, refers to trucks as “sweatshops on wheels”.
Shortage or not, there is definitely an issue that needs to be solved. Even if we normally work with shippers, Tomorrowmade actively plays a part to help improve the quality of life of carriers.
A lesser-known fact about Tomorrowmade is that we also offer factoring services – should a driver want his money immediately, as opposed to having to wait up to 45 days for a shipper to pay their invoice, factoring companies forward this payment for a fee.
A traditional factoring company takes anywhere from 3-7% of the carrier’s fee in return for this service. We know that the vast majority of carriers don’t make anywhere close to $14,000 – having monetary capital on hand can determine whether the bills are paid on time. This is why we only take 2%.
Further, through our automated tracking software, Macropoint, we free carriers from administrative work and pesky 4AM calls from dispatch asking them where they are; This empowers our carriers to focus more not only on their job but on their own mental and physical wellbeing.
This is a very contentious topic and especially if you’re a carrier, I’d love to hear about your experiences in the industry to see whether what I’ve written about is reflective of the actual situation on the ground. Shoot me an email (jose@tomorrowmade.io) and let’s chat!
Happenings in Tomorrowmade
You’d imagine that a shipper trying to get a quote for a load they have should be a relatively simple process. Unfortunately, it’s far from that. For the vast majority of firms, the process to get a quote involves plenty of emails and phone calls and a long wait as a broker compares prices from different carriers.
This leaves plenty of room for miscommunication and delays.
In recent weeks, we have been pushing hard to incorporate automated quoting into our transportation management system. This allows our clients to skip the steps I outlined above.
Having started operating 10 weeks ago, we are by far the youngest firm that Green Screen, the same software major players such as Uber and Amazon use, has licensed their product to.
Green Screen is a machine-learning algorithm to derive quoting information fed to it by its clients. In order for Green Screen to provide automated quotes, we employ deep learning algorithms.
In Lehman’s terms, we feed the algorithm past data on quotes made by human brokers and what the carriers were carrying for their respective quotes. By feeding the algorithm thousands of historical data points, it learns to spit out quotes that we can then adjust based on various factors such as market demand and desired profit margin.
