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AMAZON IS HIRING 75,000 NEW LOGISTICS POSITIONS

In what is likely a sign of things to come, Amazon announced in May that it will hire 75,000 new fulfillment and delivery positions across North America. According to Amazon, compensation for these roles starts around $17 per hour with a $1000 signing bonus. The hiring package includes a slew of benefits and access to ‘upskilling’ (that’s corporate-speak for training and career advancement).

Amazon’s announcement reflects the explosive growth that we’ve seen across our industry as of late. This article from monster.com confirms that logistics is seeing some of it’s strongest growth through 2021. Companies in distribution, warehousing, or transportation can’t hire fast enough.

But we could have told you that. We’ve been watching the driver market tighten since the severe market distortions and rapid e-commerce acceleration of 2020 pushed fulfillment demand to new heights. Now, as Amazon’s announcement makes clear, hiring is only going to get more competitive. Not only is there a growing need for drivers, but there’s more competition than ever from other distribution and fulfillment positions.

In short, e-commerce is gripping the logistics field like a boa constrictor. And they said you were in a boring field.

If you’re looking for help managing the e-retail explosion, give us a shout. We’ve been coaching companies for 26 years in attracting and retaining top talent. Our products can help you market your company to attract and retain top driving talent.

CANADA’S ELD MANDATE GOES LIVE

After lingering in the shadows for years, it’s finally here. The Canadian ELD mandate will go into effect on June 12, 2021. There’s just one problem - none of the electronic logging devices that are currently on the market meet the criteria established by the Canadian Council of Motor Transport Administrators.

Unlike in the United States, Canada requires third party testing for devices (the FMCSA allows U.S. companies to self-certify).  Canadian devices will have to warn drivers when they have 30 minutes left on the clock, and put limits on personal conveyance. As of publication, not a single device has been approved.

At this point, you may be wondering how your drivers could possibly be expected to comply with the mandate, without any usable devices. Canada’s Ministry of Transport plans to address this shortcoming with a year of ‘progressive enforcement.’ That is, while suppliers work on creating a compliant device, the CCMTA will spend a year reminding companies of these new standards.

The agency plans to provide six months of education about the ELD mandate, followed by six months of warnings, before issuing actual penalties beginning on June 12, 2022.

This could be a potential sore spot for your fleet. Electronic logging devices generally aren’t a drivers’ favorite tool. Most fleets operating across North America have branches in the United States and Canada, and we recommend reaching out to your cohorts across the border to help plan for this change.

INFRASTRUCTURE TROUBLES MEAN A BUMPY ROAD FOR TRUCKERS

In May, Arkansas’ Hernando de Soto I-40 bridge was closed after inspectors found a crack in a steel beam. Authorities shut down the bridge until it could be repaired or at least deemed safe, which at this point, means an indefinite closure.

Truckers are bearing the brunt of the situation in a unique way. All 35,000 daily vehicles that had previously been serviced by the bridge now have to be diverted, and it’s causing major delays in the area. It’s unlikely that anybody is enjoying the heavier traffic, but the situation gets especially tough when your job depends on driving an efficient route. The Arkansas Trucking Association estimates that the closure is causing $2.4 million in losses to the trucking industry per day.

This makes it a good time to review your company’s pay structure. It’s occurrences like this that frustrate drivers so much - getting stuck in circumstances beyond their control and getting a wage deduction for it. Situations like that are precisely what send truckers into the arms of a competitor.

The upside is that if your company does have the means to address something like this - be it guaranteed pay, hazard pay, or something else altogether, that’s going to be a big selling point for your drivers. So don’t forget to promote it!

TRUCK TRANSPORTATION EMPLOYMENT

Jason Miller, PhD, Michigan State University

Much has been written about the difficulty in finding truck drivers. Detailed employment data released as part of the Bureau of Labor Statistics’ Current Employment Statistics program helps shed some light on the challenges trucking firms face regarding attracting workers. Comparing employment figures in March 2021 relative to March 2019 (a two-year difference), the most serious decline exists for General Freight, Long-Distance, Truckload (TL) firms (North American Industrial Classification System [NAICS] code 484121). Substantial shortfalls also exist for General Freight, Long-Distance, Truckload (NAICS 484122) and Specialized, Long-Distance (NAICS 48423). The decline in employment for Specialized, Local (NAICS 48422) is likely driven, in part, by the decline in oil and gas well drilling. Unlike the other sectors, General Freight, Local (NAICS 48411) has increased over the past 24 months. This is likely due to strong demand for local delivery of large, bulky items due to the surge of e-commerce purchasing. The ability of this subsector to add jobs has likely been facilitated by drivers wanting to be closer to home to reduce the likelihood of COVID exposure.

DECLINE OF DRIVER SUPPLY CONTINUES

Drug tests are a topic that we don’t love talking about. A positive test can feel like a lose-lose situation – you’re down another worker, and a driver is out of a job.

But this year, there’s no way around that elephant in the room. FMCSA requirements mean that more tests are being administered, and more drivers are testing positive for drug use. As of the first quarter of 2021, there were 14,303 positive drug tests - on track to beat 2020’s total of 55,955 positive tests. On top of that, an untold number of prospects don’t even consider signing up for CDL training because of the new requirements.

Just to get it out of the way, NTI doesn’t condone drivers on the road with drugs in their system. Situations like that are dangerous, and we don’t want that any more than the next motorist. But positive tests are leading drivers to self-select out (whether by avoiding regulated jobs or by leaving the industry altogether).

It’s something that our industry must contend with, especially when the pipeline for new talent is running low. As we’ve seen, drivers who leave because of a failed drug test aren’t coming back into the fold, whether for liability reasons or because they voluntarily leave the pool. With high turnover and a shrinking pool, nobody needs another reason to lose drivers.

It’s not an easy topic to confront, but in this thorny situation, we say that the best defense is a good offense. We recommend communicating the rules to your drivers on a regular basis. Training and education (especially in gray areas, like unregulated CBD use) can proactively improve health and safety and stem the flow of drivers exiting the candidate pool (more on this next month).

AB5 ROLLS ON

We warned you about this piece of legislation a few months ago, and unfortunately, it’s still going strong. Last month, a 9th Circuit Court panel reversed a California Trucking Association injunction that would have exempted truck drivers from this law.

As a quick background, California’s Assembly Bill 5 requires companies to treat independent contractors as full-time employees under most circumstances. As part of its ABC test, the bill requires that contractors can only be hired for services that are outside of a company’s usual course of business.

If your mind immediately went to the owner-operator contract relationship, we’re right there with you. This bill has the potential to completely upend the business model that many truckers and companies have come to rely on. And it would have a dire impact on 70,000 owner operators based out of California.

Our industry isn’t going down without a fight, but we’re still feeling the squeeze. And if AB5 continues to prevail in court battles, it won’t only impact owner operators in California. Other states (looking at you, Massachusetts, New York, and Illinois!) could take it as license to enact their own version of this legislation.

All is not lost. The California Trucking Association is currently filing for a rehearing with the 9th Circuit, and a Supreme Court battle could follow. In the meantime, we’ve got a few NTI- approved recommendations for protecting your owner-operator relationships here, here, and here.

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