Will Layoffs In The Trucking Industry Affect New Drivers?

by Brett Aquila

You'll hear from time to time about layoffs that are occurring in the trucking industry. But if you follow the news closely and you understand the industry, you'll find that these layoffs will have little to no affect on new drivers that are entering the industry. In fact, in some ways the economic downturn will actually help people who are now coming out of school and are new to the industry. How can this be? There are several things to consider.

Non-Driver Layoffs

First of all, most of the layoffs that involve the trucking industry are not driver layoffs. Many of them are office personnel, mechanics, and management. These layoffs are also coming from companies that are in the trucking industry, like the engine builders and truck builders, but these are factory workers that are being laid off, not drivers. These count as "trucking industry layoffs" and make for good headlines, but for the most part do not affect drivers.

Driver Layoffs Mostly Limited To Certain Types Of Companies

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Often times the companies that are laying off drivers are doing so because two companies have merged into one, and there becomes an over abundance of drivers in a certain region. These type of layoffs occur most often in the LTL companies like CCX, Yellow-Roadway, and Conway. These companies have terminals throughout the U.S. and when two companies merge, there tends to be an overlap of terminals in certain areas. Some of the drivers at the affected terminals will be given the option of transferring to another terminal , while some may be laid off. Drivers that are coming out of CDL schooling and are new to the industry almost never go to work for one of these companies in their first year of driving, so these type of layoffs will not affect new drivers.

Another circumstance where drivers may be laid off is in trucking fleets that are owned by private companies - like factories. If a company owns their own trucking fleet and sales drop, the company often times will not branch out and begin hauling freight for other companies. They only haul their own freight. So if business slows, there is less freight to be hauled, and drivers will either get a smaller number of runs per week, or in times of real hardship for the company, will be laid off. Working for a large, independently-owned trucking company that can haul freight for anyone they like is one way to keep this circumstance from happening to you.

Hiring Student Drivers Cuts Costs

Another key point to consider is that the number one priority for trucking companies right now is to cut costs. While cost-cutting is always one of the top priorities for companies, it has become critically important in this current economic downturn. Freight rates have dropped because the amount of freight available has dropped, so carriers must cut back on costs to remain in business during times of decreasing revenues. One of the largest expenses for trucking companies is their payroll. By hiring students straight out of school instead of experienced drivers, the trucking companies are able to save a lot of money. So in this respect, the economic downturn is actually helping students find jobs!

In speaking with several trucking companies that own their own CDL driving schools, most of them are hiring as many student-drivers as they can get. A few of them had told me there was a temporary hiring freeze during December, but that was related more toward their end-of-year financial numbers than it was to demand. A slowdown or freeze in hiring in December is common across many industries. But even in these tough economic times, most trucking companies were not slowing down their hiring of student truck drivers.

High Turnover Prevents The Need For Layoffs

The trucking industry is famous for its incredibly high turnover rate, which tends to average over 100% for many companies. Because of this, if a trucking company wants to downsize its fleet, all they have to do is slow down their hiring for a short time and the fleet size will shrink from turnover alone. So for most companies, especially the larger trucking companies, there is never a need to layoff drivers.

So as you can see, even though times are tough in the economy and the media outlets love the word "layoffs" in their headlines, the trucking industry continues to bring in as many student drivers as ever to fill in the gaps caused by turnover and to keep the cost of labor down. So if you're considering a career in the trucking industry or are in the process of getting your CDL training, you likely have very little to be concerned about. Jobs are plentiful for new drivers in good times and in bad.

CDL:

Commercial Driver's License (CDL)

A CDL is required to drive any of the following vehicles:

  • Any combination of vehicles with a gross combined weight rating (GCWR) of 26,001 or more pounds, providing the gross vehicle weight rating (GVWR) of the vehicle being towed is in excess of 10,000 pounds.
  • Any single vehicle with a GVWR of 26,001 or more pounds, or any such vehicle towing another not in excess of 10,000 pounds.
  • Any vehicle, regardless of size, designed to transport 16 or more persons, including the driver.
  • Any vehicle required by federal regulations to be placarded while transporting hazardous materials.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

LTL:

Less Than Truckload

Refers to carriers that make a lot of smaller pickups and deliveries for multiple customers as opposed to hauling one big load of freight for one customer. This type of hauling is normally done by companies with terminals scattered throughout the country where freight is sorted before being moved on to its destination.

LTL carriers include:

  • FedEx Freight
  • Con-way
  • YRC Freight
  • UPS
  • Old Dominion
  • Estes
  • Yellow-Roadway
  • ABF Freight
  • R+L Carrier

OWI:

Operating While Intoxicated

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