A breakdown of how the ‘driver shortage’ narrative has pretty much ruined the trucking industry (for now)

The idea that the trucking industry is facing a severe shortage of drivers has driven the industry from a lucrative boom to a frustrating bust, truckers and industry leaders say. 

Leading up to the pandemic, rumors of a truck driver shortage circulated the media. During the pandemic, that rumor took center stage as demand for freight skyrocketed and other industries were put on pause. Because of this, many newbies entered the trucking industry looking to capitalize on the market. Now, the bubble has burst and many who started out making money are left with trucks they cannot pay for and loads so cheap they aren’t worth taking after the cost of diesel. 

“What happened in the middle of 2020 was unprecedented and is still playing out in the market today, in terms of the number of trucks that entered the market,” said Dean Croke, principal freight analyst at DAT Freight and Analytics, to TIME. 

From June 2020 to July 2023, the number of registered for-hire carriers jumped 96%, from 241,835 to 475,371. This massive increase came in response to a demand for goods a few months into the pandemic, a drop in diesel costs, and even government loans that helped carriers survive the temporary slowdown at the beginning of the pandemic. 

The increase in demand inspired new drivers to get started, and more experienced drivers to move away from large companies and start their own authorities. 

“You would have had to be very bad [at the job] to lose money,” Croke said of the recent boom.  

Then, in 2022, the cost of diesel increased dramatically, making things increasingly difficult for those truckers who are now operating under their own authority. Not to mention, the sudden influx of truck drivers and a decrease in freight volume has created an oversaturation of the market for drivers – meaning there are more drivers than there is freight demand, and rates are dropping lower and lower. 

“The shortage is just something the big companies make up,” said Jacqueline Jolly, who entered the trucking industry with her husband in 2020 after their construction business slowed. 

Jolly says that she and her husband were getting paid as much as $5 a mile when they started trucking in 2020. Diesel prices were low and the pay was high, so they decided to take out a loan and purchase a second truck for $80,000 so they could hire another driver. Soon though, diesel prices jumped and rates fell, cutting their earnings in more than half. The couple ended up having to give their second truck back – now worth only $30,000 – and is still reeling from the debt they racked up during the boom and bust cycle. 

“When the rates went down, that really killed us,” she said. “We were like, what the heck, we can’t survive on this.” 

“We certainly hear from many that are feeling the impact of the current overcapacity that exists in trucking—there’s lots of competition among lots of truckers for not enough freight,” says Todd Spencer, president of the Owner-Operator Independent Drivers Association. “The problem that much of trucking has is that they can’t retain drivers. That doesn’t indicate the problem is the workers, that indicates the problem is with the job.”  

The good news is, this isn’t the first freight market recession, so experts have an idea of what to expect. Boom and busts in the trucking industry have been around since the eighties, and this freight market recession is predicted to be about 75% of the way over by experts like Croke. The cycle is expected to hit rock bottom as more Owner Operators go into debt and leave the market. While awful for those Owner Operators, this exit will benefit drivers left in the market and demand for drivers will rise again – along with the rates.