Economy, labor shortages big issues for trucking industry.

• Position: SPECIAL SECTION: Transportation

Alaska Business Monthly met the LA first week of April with Alaska transportation industry leaders to talk about some of the issues facing Alaska, facing the industry, and facing their companies. Saltchuk Managing Director Harry McDonald, Carlile Transportation President Terry Howard, Weaver Bros. Vice President Jimmy Boyle, and Alaska Trucking Association Executive Director Aves Thompson shared industry insights and most of that is in the print edition. The entire discussion appears online and in the expanded digital edition and mobile app.

Alaska Business Monthly: What do you think are some of the issues facing the industry--the key issues?

McDonald: Well I think the biggest issue were looking at right now is undoubtedly the economy, because it's kind of a strange situation at this exact time because right now there's more work than were able to produce. I think were backed up and I think the other carriers are too, especially with the North Slope. Well, partly because it's spring time and there's ice floes and everybody's getting out and it's always busy at this time of year. So, today, there's a lot of work. We feel pretty optimistic with the oil companies' work on the Slope--Exxon and Conoco. We were at an oil industry function last night and I think they're moving ahead with the commitments they made. I know it's challenging for everybody at these oil prices.

But at the same time we know that on a state level with the budget deficits that we're looking at there's going to be some issues to deal with that are more than likely going to impact the economy as a whole. The state budget, of course, getting cut is going to impact everybody.

There's just going to have to be actions over the next year or two to get that spending in line with our income, and my personal opinion, and I'm no expert, is that this oil price could go for a good long while. I'm not optimistic that it's going back to a hundred [dollars a barrel] anytime soon.

Alaska Business Monthly: Are you talking for years? Or ever?

McDonald: Well, Yes that's above my expertise level, but I think if you look at the issues and we get the issues resolved with Iran, and we're already producing 2 million barrels a day more than is getting consumed and Iran will add another million barrels a day. Well, that doesn't seem like a good formula for oil prices to rise, but, things could change, and there are people that know a lot more than I, but I think we should be prepared for a long-term price more like what we're at now.

As far as the industry, my personal opinion, and, Terry [Howard] can kick in too, probably the single biggest issue we're facing is labor. We have all these programs for training and really it's just a matter of not enough bodies coming into the system to replace retirements and attrition. And I think it's universal. Everybody's struggling to keep the trucks full of competent drivers.

When we start talking gaslines and things like that there's not enough labor--especially in Alaska--to even think about getting that project done., maybe well have a major depression in the US that will free up a bunch of labor and maybe from there, I don't know, but the way it sits today and they're talking four or five times as many loads a day as we're moving [now] for several years, that's going to be a single issue we're going to have to get addressed to get ready for that.

Howard: I would say the same. If you look at our industry or any of the industries, the craft personnel, that pool is very limited, a lot of your young people aren't getting into it: whether that be mechanics or welders or drivers or warehouse people. We've all attended meetings about the gasline, and they anticipate a ramp-up of anywhere between forty-five hundred and five thousand people will be needed just on that project alone. Even at our current levels we're having trouble with maintaining an influx of people to offset the people that are leaving and then you throw in a big project like that and it's going to be a draw for all of us. It's going to be difficult and they'll probably overcompensate to get those people, so even if we get to keep our people, they'll harm the wage structure, for sure; they'll have to adjust it--upwards--quite a bit.

Boyle: And it's just not going to get any better. Like both of these guys [Harry and Terry] have said , the guys that are retiring that have worked in the last twenty or thirty years, they were all raised on ranches and farms. They were all used to using their hands to do the work and the generation of folks that are coming to us now just aren't used to doing physical type labor, they're more used to sitting in front of a computer screen. I think the interests of those who want to get out and do this type of work--all crafts, not just truck driving, but any kind of manual labor, that interest just isn't there. Now we re a nation of users instead of producers and so you have less people that want to get into the industries like truck driving.

McDonald: When we were kids, our dads were [teaching us to drive.] When we were ten years old we were out there driving something--trucks, tug boats, fork lifts. And the economy now, with the labor laws and everything, it's just the way things are today, and kids don't get that kind of work experience to where when they're eighteen they can roll right into a job without much training at all.

Thompson: One of the things following on that thought here is that from a policy standpoint, the associations--like myself and the Alaska Truckers Association, and other states' trucking association along with the American Trucking Association, they're all trying to formulate plans to try to attract younger drivers.

One of the big obstacles is the US DOT's [federal Department of Transportation] regulation that says you must be twenty-one years old to have an Interstate CDL.

So the question then becomes: What do you do with that young man or woman who gets out of high school and thinks they might like to drive a truck but they can't drive a truck until they're twenty one?

We're trying to develop proposals now that will perhaps create a graduated license, whereas maybe at eighteen you could start with some bunny truck stuff and local delivery, pick-up and delivery, and then in at nineteen you could go into the larger rigs--you could work your way in to it. But you could get them in a truck without having to keep them in a warehouse job for three or four years because you're not going to keep them that long.

And then, the other thing that's going on is all the gadgets in the trucks. Young guys and gals kind of like those.

We can't make the transition from high school to the twenty-one year requirement.

Alaska Business Monthly: Also, I read recently that insurers want drivers to be twenty-three. Is that true for your drivers; do they have to be twenty-three?

McDonald: Our insurance company doesn't have any hard and fast rule, I think twenty-one is fine, but there may be statistics that show accident rates go down at twenty-three--that would probably be what would drive that.

A lot of that is how you manage your drivers. There is a lot of technology to use to manager your drivers now, as far as speed, driving techniques, braking techniques, and also it just depends on how much of that is in use. They have collision avoidance and lane avoidance and some of which works in Alaska and some of which doesn't. But more and more companies are starting to take advantage of that. M maybe that, coupled with some relaxing of...