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New health costs compounding driver shortage, survey says

Carriers are reacting by shifting more costs to employees (43 percent) and are asking employees to pay more for family coverage (37 percent).

The Trucker News Services

1/25/2012

More than 80 percent of carriers report that recent health care changes will adversely affect them, according to the fourth-quarter national Business Expectations Survey by Transport Capital Partners.

“The cost pressure for driver health care and other employees’ health care is just another balancing act challenging carriers this year during rate negotiations and amidst uncertainty in the general overall economy,” said Richard Mikes, TCP partner and survey leader. 

Even asset-light, owner-op carriers could be feeling the pinch, added TCP partner Lana Batts.

“Maybe the 19 percent who reported no effect are primarily independent contractor firms who are not seeing impacts immediately,” Batts said. “Ultimately, contractors must be compensated for the cost of their own health insurance or this source of capital and labor for the industry will continue to shrink. The survey continues to show less reliance on contractors, because they are simply less available.”

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Carriers are reacting by shifting more costs to employees (43 percent) and are asking employees to pay more for family coverage (37 percent).

Twenty-nine percent are affected by increased costs, but still haven’t developed an alternative plan.

“With 2/3 of carriers telling us that driver wages must go up above $60,000 to attract and retain drivers, it is likely that drivers will also put more emphasis on shopping for fringe benefit packages as a part of the compensation mix in the future, especially as the effects of health care change reverberate through the economy,” Mikes said.
Smaller carriers are being hit harder than larger carriers, 39 percent vs 24 percent, according to the survey.

“Cost shifting is predominate with smaller carriers while wellness plans are more popular with larger carriers,” Batts said. “These changes will also impact the competitiveness between large and small carriers.”

To read the more from TCP's recent survey regarding driver issues for carriers, click here.

TCP uses this quarterly survey along with partner conversations with carriers to provide a meaningful insight into future industry expectations.  Both Mikes and Batts have long term experience in the transportation industry.  Carriers desiring to participate in future surveys may apply here.

TCP provides advisory services related to transportation mergers and acquisitions, valuations, capital sourcing, operations and strategy with regional offices in Florida, Iowa, Colorado, Pennsylvania, Tennessee, and Virginia. 

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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