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Tenstreet Market Index: What To Do When App Volumes Plummet

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Archives, Global Trade Daily, Trucking

Tenstreet Market Index: What To Do When App Volumes Plummet

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A healthy interest in the driver market always ranks high on a carrier’s list. But given the tough conditions, the industry has experienced over the last year, this interest has shifted to a furrowed concern. With application volumes dropping every week and more trucks sitting vacant, the desperation for drivers means carriers are likely paying more for less in an attempt to avoid the same fate other carriers and small businesses have suffered.

What’s Causing the Drop?

It’s a combination of several factors. Clearinghouse eliminations, retirements, and early exits would have affected the industry in 2020-21 anyway. But COVID introduced unprecedented factors to the market for which it couldn’t have prepared – notably drivers who are waiting to reenter the market (possibly until vaccination numbers rise or until they can get vaccinated) and the stimulus checks that keep them comfortable while they do so.

The number one thing to remember is that you’re not alone. This is not a carrier- or service-specific shortcoming, it’s a broad drop in application volume that has impacted the entire industry. While that may bring you little comfort, there is something you can do to prepare for when drivers return.

First, let’s review the data.

Weekly Driver Activity – Last 53 Weeks

Typically, application rates tend to be high at the beginning of the year and during late spring/early summer. They gradually drop off until the holiday season, when the drop in the volume of applications tends to be most pronounced (see late November and December). Another case of seasonality explains the dip in February 2021 when the country was locked down by storms.

From the first two charts below, you can see evidence of an additional market element. While driver job-seeking activity is still significantly below pre-pandemic levels, the stimulus has managed to drop the floor out from under the situation.

This is made clearer in the second chart, in which we’ve zoomed in on the last 5 weeks. Note the last 2-3 weeks in March where the number of applications fell drastically. March 2021 still places application volume 10 or 15 points below where we were in March 2020.

Weekly Driver Activity – Last 5 Weeks

Application Activity Index

This index is derived from Tenstreet clients who have had a consistent IntelliApp volume for the past 25 months. We assigned January 2019 a value of 100 for comparison. This gives us an easy way to see rate of application activity change over the last two years while removing the impact of growth in the number of carriers using the platform. As you can see, carriers as a whole have seen a huge decline over the past year in general.

Cost Per Lead, Cost Per Full Application

As mentioned above, carriers are paying more for leads and full apps than they did just a year ago due to the more intensified driver shortage, and are likely finding that the more specific their search, the shorter their results fall. Nevertheless, cost per full application has risen +30% over the past year.

Hiring Cycle Compared to Hire Rate

This chart shows a solid inverse relationship between the number of days in your cycle and the chance that a driver will make it to a hired status. Put simply, the longer your hiring process, the more opportunities there are for drivers to drop out.

With carriers having to work harder for every candidate, it’s more important than ever that they be able to glide through your hiring process smoothly. As past data has shown, the more serious the candidate, the more carriers they are typically interacting with – so finding and eliminating any rough patches will pay dividends when the pendulum swings and application volume improves.

This process need not be overwhelming, and we can help. Start by walking through your process as a driver and making note of any bottlenecks and hiccups. Replace them with time-saving solutions, like automation and integrations. Remember, drivers will be coming out of their own slumber and will not hesitate to move swiftly on to the next carrier if they encounter any reason to think they’re in store for more hard times.

Engagement and Early Onboarding

In addition to automation and integrations, engagement in early onboarding is another way you can improve your hiring cycle to improve your chances of getting that driver in a truck. The below chart shows carriers who engage drivers with text messaging, digital forms, and digital training modules within less than a day have a 40% greater chance of getting that driver all the way to hire.

Time and drivers aren’t the only things you’ll save. The more you can move online, the more money you save on hotels, meals, and recruiter onboarding time. Carriers who onboard online experienced an immediate 20%-40% in savings when they free their onboarding processes from expensive and unnecessary activities.

Tenstreet Can Help

Just as you’re not alone in this drop-in application volume, you’re not alone in improving your hiring process. Let us help your business see a new level of success. Many of our account managers and advisors have worked for carriers like yours in the past and know how to help.

Give us a call at 877-219-9283 or email us at sales@tenstreet.com and let us help you put new strategies in place for the next surge of drivers who come your way. It’s only a matter of time.

This article originally appeared here. Republished with permission.

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Archives, Global Trade Daily, Trucking

Coronavirus Reminds America that Truck Drivers are Essential Every Day

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Life on the road feels a little more lonely these days. Just ask Harold Simmons.

A truck driver for LS Wilson Trucking out of Utah, Simmons is afraid to go home because he doesn’t want to risk bringing the coronavirus with him. His wife has had pneumonia, and he wants to protect her.

At truck stops, he is eating alone more often because of social distancing practices in force at restaurants. No more small talk with a driver sitting next to him at the counter.

So it was a nice change of pace when he recently pulled into a rest area off the highway, and a group of strangers were in the parking lot handing out free food to truck drivers. “People, in general, are showing us their appreciation,” Simmons said. “Even shippers and receivers are finally treating us like human beings again.”

In our newfound appreciation for essential workers in the global pandemic, it’s heartening to see the support for our truck drivers. Social media is filled with posts marked with the #ThankATrucker hashtag.

Truck drivers have always been essential employees, hauling freight across the country, away from their families and the comforts of home. They have been easy to ignore because they toil behind the scenes. Most Americans never interact with them, unlike our doctors, nurses, pharmacists, supermarket cashiers and restaurant delivery drivers.

But what’s left of our economy would not be standing without the tireless dedication of professional drivers. They are the essential link in our supply chain. Despite health risks, they are hauling consumer goods to ensure retailers can keep their shelves stocked. They are delivering personal protective equipment and other supplies to hospitals when they often don’t have their own PPE. They are driving into hot zones when others are fleeing.

Truckers are providing critical services even when their own economic well being is at risk. In the early days of the crisis, freight volumes rose as supermarkets restocked their shelves and other essential businesses built inventory to protect against supply chain disruption. However, as shelter in place orders have expanded to cover most of the population, industrial production has contracted, and freight volume has declined sharply.

The reduction in freight volume has squeezed revenues for trucking companies. One widely followed financial measure is the dry van spot rate, which is the amount of money a driver is paid per mile to haul freight within about a day of the shipment. This rate has fallen 20% since the end of March, according to DAT Solutions. There’s no clear sign when rates might rebound, as some states have extended stay-at-home orders until the end of May.

Trucking companies say they are concerned about having enough revenue in the coming months to meet their two biggest sources of fixed costs: insurance and loan or lease payments for trucks and trailers.

This is a big concern because many trucking companies are small businesses, just like the florist or the neighborhood restaurant or the hair salon. Most drivers work in fleets that contain 20 or fewer trucks, according to the Owner-Operator Independent Drivers Association.

OOIDA has been lobbying Congress and the Trump Administration to do more for the trucking industry during the pandemic, including providing PPE and testing to truck drivers and targeted economic and regulatory relief for trucking companies.

“They’re facing a real economic crisis to be able to continue to operate, not to mention the fact that they actually are on the front line in the battle against coronavirus,” Todd Spencer, president and chief executive officer of OOIDA, recently said on CNBC.

Preserving our nation’s trucking capacity is critical to our economic recovery post-COVID-19. It is essential that when industrial production rebounds, trucking capacity is not constrained. We cannot allow America’s trucking companies to fail or we jeopardize the broader recovery.

_____________________________________________________________

Daniel Burrows is the founder and CEO of XStream Trucking, a design and engineering company for connected hardware for the long-haul trucking industry.

Archives, Global Trade Daily, Trucking

DRIVER SHORTAGE & TRUCKING-CAPACITY: WHY THEY’RE NOT GOING AWAY

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In the busy and demanding world of trucking, industry players are inevitably reminded of two significant challenges that show no signs of lessening now and in the near future: trucking capacity and the driver shortage. Neither issue will solve itself with current approaches. Companies are now faced with the reality that change must be embraced through improving training standards and the utilization of advanced technology solutions. 

This might not come as a surprise to some, but for others still operating with outdated practices, reality presents its own set of challenges. To look at the numbers the industry is dealing with, a report released by Insurance Journal confirmed the driver shortage figure has reached 51,000–up from 36,000 in 2016.

Some industry leaders, such as Advanced Training Systems CEO John Kearney, are confronting these issues at every angle–from a legislative, cultural, educational, and technological positions. 

“The issue is that the existing workforce is aging,” Kearney maintains. “The truck is a different piece of equipment from what it was a few years ago–it’s very sophisticated. The technology advances are significant and the regulations are outdated. Simulators are really emerging as a major change to the training field. A lot of companies are now going to simulators because there are some things they can do that are not possible to train any other way.”

Advanced Training Systems (ATS) has spent more than a decade developing cost-effective training simulators and preparing aspiring truck drivers across the United States through many of the training schools in the country. These driver training schools offer students unmatched training experiences that have propelled ATS in a leading position in the driver training field. 

“In 2008 we started the process of developing simulators because we know they are an excellent part of the training process,” Kearney says. “Today, we have simulators in a number of places around the U.S. and Mexico with operations in California where we do manufacturing and technology development while our corporate offices are in Florida.”

Among the scenarios truckers are faced with at a moment’s notice that traditional training methods can’t address include sudden road obstructions, aggressive drivers, inclement weather and truck malfunctions. These unavoidable situations present some of the most challenges in preparing the next generation of truck drivers. 

“Let’s take the example of a front tire blowout,” Kearney suggests. “If someone does that in a real truck, they could kill someone. There’s also the risk of something coming out on the road all of sudden and if the driver swerves, they could create an accident. These types of scenarios can be taught in a simulator.” 

He continues, “Ice is another example. If a driver is sliding on ice, what do they do? They don’t want to slide in a real truck, so what we do is have simulators that train properly so drivers know how to react if that happens. The reaction time is improved through the process of repetitive proper actions needed to teach muscle memory in the training process.”

Earlier this year, 28 vehicles were involved in a devastating truck collision in Lakewood, Colorado, that claimed the lives of four people. Since then, conversations surrounding improved training methods have taken priority among industry players, with simulators leading the position of potential solutions. 

“Technology is a big part of the answer,” Kearney maintains. “If we use technology, we use better methods of training and we’re not sending someone to sit in a classroom for too long. Change in technology expands on the number of people who can become interested in the field. The methodology of training using simulation and various other training methods available today—such as virtual reality—will provide the industry with better drivers and more people interested in a career in the field.”

Beyond technology, Kearney urges legislators to consider how current age restrictions limit the industry’s growth. Current laws only permit young adults over the age of 21 to drive a truck over state lines, limiting both driver populations and proactive education efforts. The desire to learn is there, but current laws restrict motivated and qualified students to begin training, leaving high schools with little reason to further pursue efforts in education. 

“High schools are not teaching students to drive in a truck. What’s beginning to happen is we are realizing young people are very qualified, they’re very used to working with things like simulation, and we need to allow the young driver to enter into the profession from the time they leave high school, between ages 18-21 once properly trained.”

The trucking industry is sometimes generalized as an exhaustive, demanding and less-than-glamorous profession. It’s time for a refresh of trucking culture to mirror what a career in the industry really looks like, beyond long hours and demanding schedules, according to Kearney. 

“The other part of the issue is we must educate young people to think about truck drivers differently. A truck driver today has much more involvement than just being a truck driver. The industry needs to change the name of what truck drivers are to something that better indicates what they do and what they are. The current trucking condo is actually a very nice place to live and travel around the country.”

The first step in creating reliable and effective solutions for the trucking industry begins with expanded training for existing and future drivers and elevation to a professional level. The technology available in today’s markets enable companies across the nation to improve operations and prepare the next generation of drivers for fulfilling careers. The reality is, trucking is not what it used to be both operationally and professionally. 

“The driver of today has become a manager of multimillion dollars’ worth of freight, managing the technology with careful compliance to the delivery schedule, serious regulations and changes in the method of operating a $100,000-plus vehicle and the method of driving as it develops. The driver of today can move up in the company they work for. Many drivers will be moving up in the industry from driving a truck.”

Opportunities now exist that weren’t fathomable in previous decades. The challenge now is to overcome antiquated mindsets and operation patterns to boost productivity, driver satisfaction and safety. It’s up to industry leaders to step up and initiate change.