One High-Paying Job Set to Explode in America

Industry analysts point to an explosion in demand for this line of work.

May 11, 2014 at 10:01AM

You wouldn't think that the old saw, "Good help is hard to find," had anything left to it, what with last week's unemployment report out of the U.S. Department of Labor showing unemployment in America is still 6.3%. The fact that hourly wages in America grew a measly 1.9% over the past 12 months tends to suggest there's little slack in the jobs market, too. (After all, if it was hard to find good help, wouldn't it stand to reason that employers would be paying through the nose to attract workers?)

In one industry, they may have to: trucking.

Help wanted
America as a whole may be slogging through 6.3% unemployment these days, but according to industry analyst FTR Transportation Intelligence, there's currently a 4.3% "driver shortage" in the trucking industry today -- a negative unemployment rate.


YRC Worldwide is hiring. And they're not the only ones. Photo: YRC Worldwide.

Bloomberg Intelligence reports that there are currently 235,600 unfilled trucking jobs across the country, which is 43.4% more job openings than at this time, last year. FTR predicts that this number will increase by a further 61.4% before finally peaking at the end of 2016, blaming new federal regulations that went into effect last summer that restrict the amount of time that driver's can sit behind the wheel. The new rules require that drivers take 34 hours off between work weeks, including two full nights of rest, and cannot work more than 70 hours in any given week.

What it means for truckers
At trucking companies from YRC Worldwide (NASDAQ:YRCW) to Swift Transportation (NYSE:SWFT) to Werner Enterprises (NASDAQ:WERN), this works out to a perverse requirement that they do "less with more." Moving goods from Point A to Point B now requires that trucking companies hire more drivers -- but work them less.

From the truckers' perspective, this may not sound like good news. The new 70-hour workweek would appear to offer less room for overtime, and smaller paychecks. But around this particular cloud of diesel smoke, there is a silver lining. Bloomberg reports that, because the new regulations have heightened demand for new drivers, "carriers may have to increase wages."

With demand for their services up -- and projected to keep going up -- and the likelihood that they'll be paid more for less work to boot, this all sounds like it's a great time to be a trucker.

What it means to investors
The news for the trucking companies, on the other hand, is not so good. Fact is, the new federal regulations could hardly have come at a worse time for the trucking industry, which last week reported multiple earnings misses, with some companies struggling to earn any profits at all.

One big problem facing the industry these days is aging fleets of tractors and trailers. Last year, Werner Enterprises COO Derek Leathers pointed out to investors that the average tractor in American trucking fleets is now at least 6.6 years old. That's up from an average age of just 5.5 years a decade ago. Warned Leathers: "To claw back from 6.6 years to get to 5.5 years, the industry would have to spend $24 billion within a 24-month window...[and] I don't know where that money comes from."

The situation could be particularly acute at companies like YRC Worldwide, whose fleet has been described by some analysts as composed of "dinosaur" trucks -- old in the extreme. And now, the government is compounding the money crunch from needing to buy new tractors and trailers purchases, and telling truckers they need to pay more for their truck drivers -- and get less work out of each new hire?

This is putting an industry -- one that Leathers himself noted has a "return on assets [that] are still very unimpressive" -- between the proverbial rock and a hard place.

Foolish final thought
Bad as all this sounds for the trucking companies, they may still have an "out" -- a way to satisfy the need to renew their fleets, solving the equally pressing need to attract new drivers. You can find this new factor at play on Swift Transportation's home page, where the trucker is using the relatively youthful age of its tractor fleet as a recruitment tool.

Boasting that unlike many of its competitors, Swift has "an average tractor age of 24 months," the company urges drivers who want to take a ride in a sleek new cab come and "Drive for Swift."

Will enticing drivers with shiny new equipment in lieu of fatter paychecks really work? Could this be the solution to the industry's money problems, and the path to making trucking profitable again? One thing's for sure: We'll be keeping a close eye on Swift and its competitors going forward -- because the trucker that figures out how to thread this needle first, will be the trucking stock we want to own.

Swift Transportation rings the bell. Should investors come running? Photo: Swift Transportation

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Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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