Aaron Terrazas of Convoy put a succinct headline on his commentary about the latest employment numbers in the trucking sector: “Where did all the drivers go?”
Terrazas, director of economic research at Convoy, was reacting to the monthly report that showed seasonally adjusted jobs in the truck transportation sector were down 1,500 to 1,480,300 from the March figure of 1,481,800.
That March figure, in turn, had been revised down 900 jobs from the employment report released a month earlier.
Trucking sector jobs were not an outlier. The U.S. as a whole added just 266,000 jobs in April, a number far less than some analyst estimates of 1 million new jobs created for the month.
The tendency is for truck transportation jobs to decline between March and April. But Terrazas, in his commentary, called the numbers an “unusually large decline for April, suggesting that some last-mile delivery workers may have been kept on payrolls longer after the end-of-year holiday rush than they have been in the past.“ The truck transportation numbers include several categories of drivers; it isn’t just made up of long-haul transport.
When the report is issued for the month just ended, the Bureau of Labor Statistics also issues a breakdown of subcategories for each of the primary groups that lags by a month. The latest numbers are through March.
Under truck transportation, that includes subcategories of long-distance truckload, LTL drivers and specialized drivers.
Jason Miller, an associate professor of logistics at Michigan State University, looked at the sector breakdown for March and notes that the truckload category is down 20,000 jobs in the past two years. “This helps explain why capacity has been so tight,” he said in an email to FreightWaves.
There were similar trends in the categories for LTL and specialized freight, with current driver numbers well below those of 2019, Miller said.
The report released Friday was the first that compared this year to April of last year, when the pandemic was fully gripping markets. That comparison showed a gain of all truck transportation jobs of 51,900 year-on-year, which essentially means comparisons to 2019 are far more relevant since April 2020 is such an outlier.
Terrazas also dived into the detailed data from March and drew a few conclusions about the supply of drivers. He said that “active employment” of owner-operators is at or exceeding levels before the pandemic, “but there is also evidence of elevated numbers of owner-operators sitting on the sidelines of the labor market.” But he also said there have been “reasonably strong new entrants” in the owner-operator supply of drivers.
Recruiting remains a struggle, Terrazas said. “The main challenge for fleets is recruitment and retention: New driver inflows are well below historic norms,” Terrazas wrote in his commentary. “Since fleet employment outnumbers owner-operator employment by several orders of magnitude, their inability to attract new drivers has contributed to a net decline in the number of active for-hire drivers.”
Since year-on-year comparisons are now skewed by the pandemic, Terrazas made the comparison to January 2020, noting that current employment is still 3% less than that number. That gap, he said, “adds further fuel to the idea that something isn’t working in the labor market for truckers.”
Other notable data and observations about this month’s employment report:
— Terrazas reviewed the data on female drivers and came to one interesting conclusion. In the subset of general trucking, local — so not long-haul — all the net gains in jobs since the pandemic have gone to women.
— For all the focus on pay increases, the average hourly earnings in the truck transportation sector rose just 8 cents to $26.69 in March. But hours worked rose a full hour, to 41.8 hours. That number is for all workers. For just nonsupervisory and production employees, which would include drivers, wages actually fell to $24.45 from $24.63.
— The fact that shipping goods costs more is evident in the producer price index for the truck transportation sector. It rose in March to 157 from 153.8 in February, a 2.1% increase month on month. In the history of the PPI provided by BLS, that is easily the biggest one-month increase. The history has no other instances of it increasing more than 300 basis points since the start of 2011.
— For all the hot market deals for warehouse space, their workers aren’t doing too well right now. The number of jobs in the warehouse sector dropped to 1,405,600, a decline of 4,300. Since the January report, they are down 10,000. Average hourly earnings for nonsupervisory and production employees rose 10 cents, to $18.62 from $18.52. But wages in that sector overall declined to $21.99 from $22.39. In contrast to the sharp rise in the PPI for trucking, the index for warehousing inched up to 112.2 from 112.1.
— Economists tend to study seasonally adjusted figures. But the not seasonally adjusted numbers in truck transportation did record a gain in April jobs compared to the prior month. Jobs in the not seasonally adjusted category totaled 1,465,100 jobs, an increase from 1,461,000 in March. When that is compared to the February numbers — which after being preliminary for the last two reports are now “final” — it showed a growth in not seasonally adjusted trucking jobs of almost 12,000 positions between February and April.