Driver Shortage - Is History Repeating Itself?... Again?

Last year RV transporters were pulling out of yards with a units that had already been on the transport company's lot in the range of a month or more, especially if they were headed North across the border (see March 2010 RV Business article "RV Transporters Cope with Driver Shortage" where Classic Transport reported having a 6 week backlog).

All transporter companies were in about the same shape, plus or minus a couple of days, because the manufacturers were self regulating dispatches based on which transporter was the least number of days out in addition to which ones could get a hot unit delivered first.

If that sounds familiar, one only needs to look back to May of 2007 to an RV Business article outlining the same situation, but for different reasons according to the transport companies ("RV Transport Firms Encounter Driver Shortage").  In that article, the source stems from the tidal wave of new drivers to the industry in order to move the Katrina FEMA units (you all remember those don't you - money through the nose with DOT waivers for all applicable regulations... that may be a slight exaggeration, but you remember).

After the FEMA units dried up, there was the natural decline of the industry in the second half of the year which spread the units too thin across the over-abundance of drivers leaving many with only one option - get out of the RV transport business.

In 2007 the RV transport companies realized they were in the midst of an unexpected driver shortage, but not in time to affect change.  In addition to laying some blame on the inability to support a large enough base of drivers during the slow period, there was also the aspect of fuel costs.  The manufactures were slow to respond to the rising cost of fuel which resulted in the inability of drivers to operate profitably.

This year appears to be a repeat of 2007 with the rising fuel costs, and with a driver shortage in general, not just with RV tranpsporters (see previous post "What Will the Driver Shortage Mean for You?").  Drivers are talking about what it takes to make money in today's market in addition to fondly reminiscing of when they were getting paid the same per mile rate 5 or more years ago (taking out the fuel surcharge adjustments).

Many drivers wonder why OEM's don't increase the pay when the supply of drivers is too low.  Instead, they pay the same rate as when there aren't enough units to go around, and just sprinkle some "Faster! Faster!" on top when it's busy.

We are in the midst of a slower economy relative to where the RV industry has been in the past.  That may justify why they still cut corners when it comes to expenses (even freight).  However, I wonder if there just aren't enough options when it comes to delivering RVs.

We Need More Options

Maybe there should be several options with sliding scales of driver pay during the busiest shipping times.

1. Hot Ship! (the dealer would like this to leave out quickly)... maybe add $0.10 per mile
2. Hot Hot Ship! (the dealer would like this to leave out today)... maybe add $0.15 per mile
3. Hot Hot Hot Ship!!! (the dealer has sold the unit before it was ready to ship and the customer is going on vacation tomorrow!!)... maybe add $0.25 per mile
4. Standard Ship (no big hurry for this, put behind the premium loads and we'll take it whenever)... standard pay - add $0.00
5. Slow Boat Ship (the dealer doesn't really want this unit anyway and will refuse it when you get there for some unreasonable quality or timing flaw)... double charge since you will be bringing this back to the manufacturer after haggling with them, your company and the dealer for 6 hours on a Friday afternoon

Yea, you're right - that'll never happen.

But, why don't the economics of the rest of the world work with transporting RV's?

Supply and Demand as an economic theory basically dictates that when demand is greater than supply, prices will increase until demand and supply are the same.  With RV transport the economic theory is basically if the unit doesn't arrive at the dealer when "someone" wants it there then the yelling starts... and it doesn't stop until the unit is on the lot with a spit shine (by "someone", that could be the floorplanning source, dealer, customer, salesperson, transport company dispatcher, OEM dispatcher or anyone else other than the driver that believes the trip is taking too long)

Ok - to be fair, there are many drivers in the industry that perpetuate that problem by:

1. Laziness - not doing what they said they would for reasons that would be laughable if someone wasn't going to get their butt handed to them for the missed promise
2. Disorganization - taking a load only to report that they need to reset their logs instead of leave with the hot unit as they promised
3. Lack of Commitment - after agreeing to take the load, waiting until the last minute to say "nah, I don't really want to take that" and pointing to the "No Forced Dispatch" sign on the wall of the transport company.
4. Lack of Concern - Leaving with the unit on time and with fresh logs only to miss the promised delivery date because they stopped off at ___________ (fill in the blank: a flea market / VEGAS BABY! / a strip club / the house / ... etc)

The bottom line is that things will happen to disrupt the best executed plans.  However, if it weren't for the small handful of drivers noted above, it would be much less frequently and the level of forgiveness would skyrocket.  So why do we let all these "bad" drivers do this to us?

Driver Pay

Maybe this all comes back to driver pay, the laws of supply and demand, and the fact that (sans fuel surcharge) driver pay has not changed in somewhere between 3 and 30 years.

Could higher driver pay bring more professional drivers into the mix, naturally weeding out those drivers that caused the most trouble?  What's the old saying, "you get what you paid for"?  Isn't that what is happening?

The pareto principle is the famous 80/20 rule.  80% of ____ is a result of 20% of ______.  In this case, 80% of the issues in RV Transport are caused by the bottom 20% of the driver base.  Wouldn't it stand to reason that you could improve the driver base, and all attitudes involved, if the drivers were paid a little better?

Result
The result would be better for all involved.

• The Transport companies would have less staff - they could eliminate the staff person that takes care of all the BS from the 20% of the drivers that we just eliminated (issues, damage processing... etc)
• The transport companies would have less to pay in damages and claims.... and that would also lead to a lower cost of insurance
• The OEM's could eliminate one staff person, the one that handled the transport damage paperwork (ok, maybe not a full person, but they’d be more efficient)
• The OEM's would have a more friendly environment - the dispatcher would no longer be yelling about deliveries because they would not be getting nasty calls from salespeople who got nasty calls from dealers who got nasty calls from customers
• The Dealers could count on their deliveries being timely at such a high rate that they would either be selling more or resting more... but not yelling more.
• The Drivers - would be a proud group of professionals that get an honest days pay for an honest days work.

History doesn't have to repeat itself forever, but until some fundamental aspect of RV Transport changes, I see this driver shortage during the selling season being an every year occurrence.

Am I that far off the mark?