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Is the Labor Market for Truck Drivers Broken, and Will Autonomous Trucks Fix It?

Download this paper from the 59th Annual Transportation Research Forum website

Stephen V. Burks 1 , 2 , 3
Kristen Monaco 4
Arne Kildegaard 5

Presented at the 59 th Annual Transportation Research Forum, Minneapolis, MN

April 11, 2018

Abstract: The trucking industry has argued since 2005 that there is a shortage of truck drivers. Industry leaders also express continuing concern about the high level of turnover in a key segment of the industry, long distance truckload (TL) freight, which has been reported since the mid-1990s. Recently they have urged the rapid implementation of regulatory freedom to experiment with autonomous trucks, arguing, along with firms such as Uber, that autonomous trucks may "fix the driver shortage." We address these issues in three parts. First, we ask whether the supply of truckers responds to price signals in fashion similar to that of other blue-collar labor markets. Using data from the BLS Occupational Employment Statistics, we find that the trucking labor market displays some characteristics of a "tight" labor market: rising nominal wages, stable/growing employment, and lower rates of unemployment than other blue-collar jobs. However, using data from the Current Population Survey we also find relatively high rates of occupational attachment among drivers. And more importantly, we find that truck drivers enter and exit the occupation in response to changes in wages and hours in the manner predicted by economics. So, if a tight labor market indicates a shortage, it is not because higher wages fail to attract workers. Second, we analyze the issue of high turnover in a large industry segment–long distance TL firms–in which driver turnover has been persistently high for decades, and in which the industry says the shortage is most severe. We present a simple model of the management problem facing TL firms and use it to argue that high turnover is a natural result of cost-minimization strategies of TL firms, given the product market constraints they face. We suggest that the perception of a shortage among driver managers is primarily due to this background fact plus the role that turnover rates play as a "shock absorber" in an institutionally "sticky" pattern of industry price responses to demand changes. Third, with these insights and model in hand, we ask what autonomous trucks are likely to change about this labor market. The answer depends on exactly how this technology is implemented, and we offer some speculative ideas. But we also suggest that it may not be the TL segment that is the most important early target, and that in the short run the use of this technology in TL could either increase or decrease turnover and the associated perception of a shortage of drivers, depending on details that are not yet available.

Keywords: occupational mobility, industrial mobility, autonomous trucks, trucking, motor freight, turnover, truck driver, driver shortage, secondary labor market segment
JEL Categories: J62, J49, R49, J24

1 Division of Social Science, University of Minnesota, Morris (corresponding author at: 320-589-6191, svburks@morris.umn.edu)
2 Institute for the Study of Labor (IZA), Bonn, DE
3 Center for Decision Research and Experimental Economics (CeDEX), University of Nottingham, UK
4 Office of Compensation and Working Conditions, Bureau of Labor Statistics (BLS), 2 Massachusetts Avenue NE, Washington, DC 20212
5 Division of Social Science, University of Minnesota, Morris