Last-Mile Delivery Challenges: Attracting and Retaining Drivers

Manufacturers either rely on their own fleets or on transportation companies to deliver their goods to customers. The delivery process can be complex, often with stops or delays along the way. Last-mile delivery, which refers to the last step of the delivery process, when an item is moved from a transportation hub to its destination, has become particularly challenging in light of a shift in consumer expectations to same-day delivery, which has exposed transportation labor shortages.

In 2021, the American Trucking Associations (ATA) estimated a shortage of at least 80,000 drivers due to several factors including low earnings and difficult working conditions. To compete for available drivers and retain their current drivers, manufacturing companies with their own fleets and transportation companies should conduct a review of their compensation plans, employee benefits, and recruitment efforts.

Initially, companies must ensure their compensation and benefit polices are competitive in their markets and enticing enough to bring in new drivers as well as retain existing drivers. Consider retention bonuses for existing drivers and sign-on bonuses and training reimbursement for new drivers. You can also offer benefits beyond monetary incentives, such as paid time off, paid family leave, health insurance, and tuition reimbursement.

Consider a similar approach to recruiting, starting with a look at the pools of potential drivers. Military veterans, considered some of the best trained and most disciplined potential employees, make up a substantial pool of underutilized labor. Many have the training and experience that can shorten the time between when they are hired and when they are ready to begin driving. The Biden Administration has launched an initiative to help pair veterans with trucking companies and has implemented several programs through the Department of Labor, Department of Transportation, Federal Motor Carrier Safety Administration, and the Department of Defense to place veterans in trucking jobs.

Another way to retain drivers is to ensure they receive regular training and mentoring as they move through their careers. For example, providing up-skilling opportunities can help drivers grow in their jobs or even advance into more senior positions. Communicating those opportunities and potential career moves can help retain drivers.

Consumer expectations intensified by the transportation labor shortages have challenged employers’ last-mile delivery strategies. To attract and retain drivers, employers should review their compensation plans, employee benefits, and recruitment programs. Doing so will be key to ensuring manufacturers with fleets and transportation businesses can continue to deliver to their customers in a manner that meets their needs and demands.

About the Author(s)
Clint is a Senior Associate in the Youngstown office of HBK and a member of HBK Manufacturing Solutions. Clint joined HBK in 2018 and has experience in the areas of audit, review, and tax preparation for closely held businesses and individuals.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.