One High-Paying Job Set to Explode in America

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

Lost money on YRC? Here's a chance to make it back
YRC Worldwide shares are down 40% since their highs of last summer. Have you lost money on YRC stock? We can't promise to make it all back for you quickly, but we can help you recoup your losses slowly. Here's how: The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (1) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 15, 2015, at 5:00 PM, tagmaster0711 wrote:

    Swifts enticement "drivers who want to take a ride in a sleek new cab" How romantic...Since when do drivers take a ride? Its called work or driving a truck !

    Any driver who takes less money for a newer truck sounds like a selfish individual who may deserve lower wages.Shiny new equipment in lieu of fatter paychecks is not a solution to the industry's money problems. What if they stop paying out tens of millions in bonus money to top executives or

    in some cases simply adhere to a contract and not throw away millions on grievances or a poorly planned change of operations A more valid solution is what many companies do when offering training and hiring of vets to drive trucks.

    YRC and ABF in particular have cost down lower than ever now thanks to the sacrifice of its employees via give backs. Their are many reasons a lot of these companies are not very profitable but the drivers wages are the only thing they want to talk about. Sure they need newer equipment to avoid breakdown and delay related expense but drivers taking lower pay for better equipment is senseless.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2943895, ~/Articles/ArticleHandler.aspx, 8/28/2015 11:10:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

Today's Market

updated 1 hour ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
YRCW $16.50 Up +0.26 +1.60%
YRC Worldwide, Inc… CAPS Rating: **
SWFT $19.63 Down -0.11 -0.56%
Swift Transportati… CAPS Rating: *****
WERN $26.54 Up +0.09 +0.34%
Werner Enterprises… CAPS Rating: No stars