Minorities Are Slowly, But Surely, Making A Difference In The US Trucking Industry

The trucking industry suffers from excessive driver attrition rates and has had trouble wooing younger drivers into the sector. The minority population can help.

A hearty welcome to the 67th edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.

Happy 2023, and welcome back to another edition of the newsletter. As the dust settles around the hullabaloo of the holiday season and work beckons, it is no wonder that people feel a tinge of indignation to pull themselves back to the work desk.

But being in the supply chain, we do know that not everyone in the workforce can afford that feeling, as not all businesses stop during the holiday season. For the most part, retail continued to stay up — and so did its workforce. Supply chains continued to work through the holiday season, sorting, packing, lugging, moving, and hauling freight at a fervent pace, racing against the clock to ensure desired products remained stocked.

Interestingly enough, the peak retail season of ‘22 did not see the quintessential ‘peak’ that usually crops up during that time of the year. This was expected, as various factors led up to this situation. For one, retailers stocked their season inventories way earlier than usual in ‘22, considering the ‘21 peak season debacle was mired with late inventories and bottlenecked logistics networks that hindered sales. 

Big retail chains with warehouses bloated by products arriving late for the ‘21 peak season offloaded excess inventory by putting up promotions and dumping them on discount stores and off-price retailers. Consumers jumped on these offers, and in most households, ‘holiday shopping’ was done months before the usual timeline. 

The retail peak season bucking the trend became a blessing in disguise, especially on the labor front. Finding seasonal labor is an exhaustive task, especially in an environment with record-low unemployment levels. Labor is expensive, hard to find, and harder to retain. FRED data on job openings show roughly two jobs for every person searching for one. 

The long-haul trucking industry takes the cake in terms of the challenges it faces with finding truck drivers. Trucking is a hard job, with truckers fighting a multitude of issues with rude customers, unsafe parking lots, irregular sleep patterns, and going several days without seeing their families. 

It isn’t a surprise then to see dropping interest amongst millennials and the GenZ to join the trucking workforce. An average US truck driver is 48 years old, signaling an imminent collapse in the system if there isn’t a steady stream of younger people taking up the job. Retention has also been a significant problem, with large trucking firms regularly seeing over 90% driver attrition rates annually — a percentage that would be considered disastrous in about every other industry vertical. 

Regardless, the US trucking industry seems to be getting help from an unlikely quarter — the country’s migrant population. Over the last couple of decades, there has been a constant inbound of migrants making their way to the trucking industry. 

“I’ve been in this industry for 22 years, and I see people coming in waves from different countries and cultures. It starts with a group of people from a community setting up businesses within the industry. Soon, word travels back home about them making good money in trucking, leading to friends and family making their way to the US to try their hand in the industry,” said Nicole Glenn, the founder and CEO of Candor Expedite, a transport brokerage business. 

Today, US trucking is an amalgamation of different cultures, with tens of thousands of people from East Europe, the Americas, and South Asia making their careers in the industry. For trucking firms struggling to recruit drivers and retain them, wooing people from different ethnicities might be a way to widen their labor net.

However, to get people from different ethnic and cultural backgrounds interested, carriers must be willing to put in the effort to learn and appreciate their work ethics, while actively helping people with a non-English background feel comfortable in their working environment. 

“The English barrier is a consistent issue, and so is the lack of understanding of cultural differences from the carriers’ side,” said Glenn. “For instance, some cultures don’t haul certain products, and some are looking for different times of the day to say their prayers. I think it’s about realizing and accommodating these differences, and adapting work schedules to show support.”

Glenn stressed the importance of treating drivers right and making them feel seen. It’s about being treated equally and with respect, irrespective of ethnicity, culture, or gender. “Think of women drivers. The industry can do better by making parking situations safer for women and providing spaces for them to take a shower and not feel like they’re in a bad spot. It’s a work in progress for our country, but it’s good that people are talking about it now.”

To attract minorities, companies must look to showcase success stories of what they’ve done already. Glenn contended that having ‘ambassadors’ from different communities within the company vouching for the organization will attract the right workforce. 

Companies must also be mindful of when different communities take days off for their festivities. “Faith and culture might not be the only factor. Drivers from certain communities take off during the entire DOT inspection week because they feel they aren’t treated well and do not want to deal with the situation,” said Glenn. “As an expedited freight broker, I take note of all this, talk to different carriers and see what we can do to bring additional capacity during such times so that our loads get serviced.”

On the flip side, having a multicultural crop of drivers within a fleet will give the management room to run through major US holidays like Thanksgiving and Christmas, as some communities do not mind working through these weeks. Fleets that continue offering capacity around the year to their shipper partners will see it reflect on their brand as a carrier of choice. 

“We need to understand that truck drivers are what help make America truly run. The smart fleets will open their eyes and make adjustments. Prejudice does exist, it’s unfortunate, but it’s a part of the system,” said Glenn. “The more we talk and advocate for openness, the better it will get for the industry at large. Emphasis must always be on the truck driver, and what truly matters for their well-being.”

The Weekly Roundup

America’s leading freight broker by revenue, C.H. Robinson is in search of a new CEO. The former CEO, Bob Biesterfeld, was “involuntarily terminated” with no explicit cause amidst the financial downturn in the industry. Scott Anderson, former chair of the company’s board of directors, will serve as interim CEO until a permanent replacement is found. 

2M is currently running a “ghost loop” from Asia to Europe as dropping profits have spiked the number of blanked sailings. A 2M consultant said, “Though not formally closed, the service is currently a ‘ghost loop’ that has lost almost its entire fleet.” By all but closing those services, 2M will focus its attention on other, more profitable loops.

A supply chain “golden age” could be on the horizon, at least for those companies that survive the remainder of the pandemic fallout. Investment firms have been pushing capital into tech startups at a rate of roughly $9 billion per quarter. The shifts in consumer habits and overall necessity has facilitated a significant change in the industry, thought long overdue by many. 

The Port of Houston will be reinstating dwell fees as early as February, having temporarily suspended them due to delays from the port's external software developer. These fees, set to go into effect on Feb 1st, will start to accrue after the free time expires and will cost shippers an extra $45 per day for each container left to sit. 

…said who?

“Everyone in retail says we want to be in the right place at the right time with the right quantities. But they’re starting with the wrong quantities in the wrong location from the wrong space, right there in the center of the country trying to access the customer some, like, 700 miles away.”

- Shekar Natarajan, president of Quiet Platforms, commenting on issues with last-mile fulfillment 

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