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Cynthia Engel
The Nation’s freight bill hit an all-time low in 1996, with shipping costs accounting for only 6 percent of gross domestic product, compared with 7.6 percent in 1980.1 Nearly 75 percent of freight is transported by truck at some point in the distribution chain,2 and consumers have benefited from a myriad of factors that have improved service and lowered freight costs. The trucking industry has weathered many challenges, some of which emerged from within the industry, and others that sprang up in the economic environment.
The adoption of just-in-time delivery systems, new developments in technology, deregulation, and increasing competition between transportation sectors have forced the trucking industry to pay more attention to customers’ needs. In particular, companies have sought to meet requirements for more reliable and frequent deliveries, and thus reduce warehousing and transit costs. These savings, passed on to consumers and businesses, have contributed to more competitively priced products in a global economy.
Cost savings have been achieved largely at the expense of for-hire truckdrivers,3 whose real average hourly earnings (in 1982 dollars, as deflated using the Consumer Price Index for Urban Wage Earners and Clerical Workers) declined by 40 percent4 between 1978 and 1996, compared with a 13-percent decrease for all private sector workers. But while the payments for labor services in trucking have declined in real terms, the demand for these services is increasing. The industry gained 586,000 jobs between 1980 and 1994, and trucking jobs are projected to increase by 299,000 between 1994 and 2005,5 which places them among the top 25 occupational groups for projected employment growth. Increased demand and deteriorating wages have resulted in an industry that is plagued by frequent labor shortages.
This article examines some factors that have affected trends in employment and wages of for-hire trucking employment over the last 30 years. First, we review employment trends in the industry, and then look at the changing character of the trucking labor market, as well as other factors that have wrought change in this industry.
This excerpt is from an article published in the April 1998 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 "Low Shipping Prices May Curb Inflation," The Wall Street Journal, June 24, 1997, p. A2. The source of the data is Cass Information Systems. Estimates refer to freight movement by truck, rail, and sea. While reductions in the rate of revenue growth per ton-mile have occurred across all sectors, they have been most significant in rail and water transport. Also, see National Transportation Statistics, Historical Compendium, 1960–1992 (U.S. Department of Transportation, Bureau of Transportation Statistics, 1993), p. 44.
2 When measured by value rather than tonnage. See 1993 Commodity Flow Survey (U.S. Department of Transportation, Bureau of Transportation Statistics, 1995).
3 For-hire truckdrivers are those employed in SIC 42, Trucking and Warehousing, rather than across the spectrum of industrial classifications.
4 Excludes the warehousing and storage component of Trucking and Warehousing, SIC 42. Rate of decline is calculated using annual averages.
5 According to the 1996–97 Occupational Outlook Handbook (Bureau of Labor Statistics, 1996), p. 3.
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