At A Glance
- The age of the average truck driver has increased more rapidly than the age of the average worker due to fewer young workers entering the industry.
- Meanwhile, the demand for truck drivers will increase as industries that rely on trucking services continue to grow. By 2020, the gap between the supply and demand of drivers is expected to be 25,000. This number could exceed 33,000, assuming a lower rate of productivity growth.
- This is cause for concern, not just for the trucking industry, but for its customers, the Canadian economy, and, ultimately, consumers.
Improvements in the movement of goods will have a direct impact on the well-being of individuals. Given that trucks play a part in delivering most of the food that we eat, the leisure goods that we enjoy, and the roofs under which we live, the current challenges faced by the trucking industry are a concern for all Canadians.
Like many industries, the trucking industry is facing growing challenges due to the aging population. However, the magnitude of the demand for goods movement, the resulting demand for truck drivers, and the unfavourable demographic profile of truck drivers all mean that
the impact on the trucking industry is particularly acute. Moreover, the sheer number of drivers required to move our goods makes it all the more difficult to find an adequate supply. There are over 300,000 truck drivers in Canada today, which includes both drivers in the for-hire trucking industry and those drivers engaged in private trucking activity (trucking services that are carried out in-house by companies in other industries). This means that nearly 1 per cent of the Canadian population and over 1.5 per cent of the labour force are employed as truck drivers.
The main purpose of this report is to quantify the truck driver supply requirements and the resulting pressure that the for-hire trucking industry will face to attract new drivers. In a business-as-usual scenario where the trucking industry continues to have difficulty in attracting younger workers to long-haul trucking occupations in particular, we find that the driver supply will remain relatively stagnant until 2020. Yet a significant portion of those industries in Canada that are in a growth stage depends on services from the for-hire trucking industry for sourcing materials, delivering goods to and from distribution centres, and delivering their final products to customers. As these industries continue to grow, so too will their demand for trucking services, which will result in a need for an increased supply of drivers.
If we assume ongoing labour productivity increases of two-thirds of 1 per cent per year for the for-hire trucking industry, the resulting supply and demand gap for truck drivers will be nearly 25,000 drivers—or about 14 per cent of the driver population required to meet demand by 2020. While past estimates indicate that the industry’s productivity performance has been strong, the industry faces significant challenges in the future. Congestion, changes in hours-of-service rules in the United States, restrictions on size and weight regulations, and other challenges will all affect the industry’s ability to maintain productivity gains in the coming years. A sensitivity analysis conducted for this study suggests that if an improvement in labour productivity is lower than anticipated, the gap could exceed 33,000 drivers. This is due in large part to the tens of thousands of drivers approaching retirement age and the very small number of young drivers taking their place. (If we were to include the driver requirements for private trucking activity, the gap would be even larger.)
Approximately 87 per cent of productivity gains by the
for-hire trucking industry since 1986 have flowed through to customers in the form of lower prices.
In the face of increasing demographic pressures, a number of factors could help to match the supply and demand for truck drivers. These include:
- a contraction of the trucking industry relative
to the forecast;
- a smaller- or larger-than-expected increase in trucking industry productivity;
- a significant improvement in industry working conditions or wages, marketing of the truck driving occupation, and driver training/licensing;
- a reorganization of trucking activity and supply chains in order to reduce the demand for long-haul drivers; and
- a change in policy to allow the truck driving occupation to be recognized as a skilled trade.
In the past, productivity gains in the for-hire trucking industry have been quickly passed on to customers. In fact, approximately 87 per cent of productivity gains by the for-hire trucking industry since 1986 have flowed through to customers in the form of lower prices. This demonstrates that shippers have a direct interest in improving trucking industry productivity and addressing labour challenges, as the resulting benefits are subsequently passed on to shippers in the form of lower prices. For example, small changes at receiving points that minimize the amount of time drivers spend waiting helps
to improve carriers’ productivity. Such productivity improvements flow back to the shipper.
With $17 billion in annual gross domestic product (GDP) and as an employer of nearly 300,000 workers, the for-hire trucking industry’s impact on the Canadian economy is large. This impact is even larger when the indirect and induced impacts are considered.
More importantly, however, efficient and effective trucking services—along with efficient supply chain logistics—shrink distances between firms and people, and make markets work better. Conversely, a weakening of transportation systems does the opposite: When the distance between firms and people is increased, the cost of doing business increases.
Ultimately, efficient freight transportation improves export competitiveness and results in more goods being available at lower prices for consumers. This makes the health of the trucking industry freight transportation networks an issue of importance for Canadian competitiveness.
It will be up to the trucking industry to address its own labour challenges, and make the industry more attractive to potential drivers. However, industry leaders believe that there is also an important role for government to play in developing policies and regulatory frameworks that establish national occupational, training, and licensing standards that recognize truck driving as a skilled occupation. Furthermore, any policy support that enhances the industry’s productivity will help to mitigate the impact that results from the lack of available drivers.
It will also be important to convince customers of the need to address this situation now and to work with them to develop strategies that will make the best use of drivers’ time. After all, the trucking industry’s long track record in sharing the benefit of its own productivity gains provides a direct incentive for its customers to collaborate on strategies.