Downturn creates glut of drivers

Milwaukee Journal Sentinel (MCT) - In a move that is both a result of the country's economic problems and an indication of their seriousness, Schneider National Inc. said last week it will stop training inexperienced people to become truck drivers.

The Green Bay firm, one of the country's largest trucking companies, now will fill its behind-the-wheel openings exclusively with veteran drivers _ something it hasn't done since the mid-1980s.

For years, trucking executives nationwide bewailed a "driver shortage" that created huge turnover, pushed up pay and sometimes left tractors sitting idle despite plenty of freight demand.

With the recession tightening its grip, however, those days have disappeared.

Trucking company failures have spiked, a record number of trucks has been idled and drivers who once jumped from firm to firm for better pay or working conditions now are more inclined to stay put.

"There's a huge oversupply of drivers now," said Joe Rajkovacz, regulatory affairs specialist for the Owner-Operator Independent Drivers Association, a 160,000-member group that represents independent truckers, many of whom contract with large carriers and function much like employees.

Even the American Trucking Associations, which three years ago said the industry was short 20,000 long-haul drivers, acknowledges that the present picture, at least, looks much different.

"Currently, due to the extremely weak freight volumes, there is not a shortage of drivers," said Bob Costello, chief economist and vice president of the trade group. "However, the fundamental demographic trends that caused a shortage a few years ago have not gone away. Once strong freight volumes return, I fully expect the shortage to return."

In the meantime, Schneider is changing its hiring model dramatically.

Each year, the company has trained thousands of inexperienced drivers at centers in Green Bay and five other cities across the United States and Canada.

The privately held firm employs or contracts with 14,400 drivers and posted $3.5 billion in revenue in 2007. It hasn't yet disclosed sales for 2008.

On average, it costs Schneider about $8,000 and takes about 45 days to train each newcomer to the field, said Don Osterberg, vice president of safety and driver training.

Training for experienced drivers, which focuses largely on orientation in Schneider's way of doing things rather than the fine points of, say, steering out of a skid, takes about four days and costs about $1,500.

With the industry contracting, Schneider can take advantage of the savings. The "supply and demand lines have crossed," and there are now more experienced drivers than there are jobs, Osterberg said.

Rajkovacz _ who once was a Schneider trainer and called the company's program a well-respected industry benchmark _ agreed.

"Because of the economic downturn and the significant loss of capacity in the industry, trucking companies don't need to expend significant resources training new drivers," he said. "There's a huge pool of experienced drivers out there looking for work."

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The American Trucking Associations' index of monthly freight tonnage blipped up in November but basically has been on a downward trend that saw it hit its lowest mark in five years the month before.

During the first half of 2008, meanwhile, nearly 2,000 trucking companies went out of business, the highest level since 2000-'01, according to industry analyst Donald Broughton of Avondale Partners. During the period, more than 88,000 trucks, or about 4.5 percent of the country's capacity, were idled, Broughton estimates.

Anecdotally, Rajkovacz said he has heard from independents who sit for days on the West Coast waiting for a load to haul back to the Midwest.

All that creates a general environment for drivers "that is strained and uncertain at best," Schneider spokeswoman Janet Bonkowski said. In such times, drivers find the stability and strong access to freight of a company such as Schneider particularly attractive, she said.

Rajkovacz expects to see the strain and uncertainty _ and the number of trucks being curbed _ to soar now that the Christmas shipping rush is finished.

"It's going to accelerate tremendously," he said.

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© 2008, Milwaukee Journal Sentinel.