Driver Shortage in the Propane & Petroleum Industries

By Frank Thompson on Mar 07 in Careers, Commercial Auto.

What to Know About the Driver Shortage in the Propane & Petroleum Industries

Labor shortages have become a big problem in many industries lately, and the propane and petroleum fields are no exception. More specifically, these industries are having trouble finding and keeping qualified drivers who can transport propane and petroleum across the country. Here’s a look at the main reasons for the recent driver shortage and what many companies are doing about it.

What’s Behind the Truck Driver Shortage?

First, you should note that there has been a driver shortage for a few years now, so it’s not an entirely new issue. According to the National Tank Truck Carriers, the trucking industry has been short more than 50,000 drivers since about 2017. The same group said that certain specialty trucking areas—such as petroleum and liquid tankers—have been hit particularly hard with driver shortages. In fact, within this group, the number of qualified drivers has been reduced by nearly 42% since 2019.

Originally, the truck driver shortage had to do with the sheer lack of drivers who were not only interested in this job, but also qualified. Anyone who wants to drive a tanker of propane or petroleum has to have a CDL, plus certain license endorsements—such as tanker and HazMat. Plus, they typically need to have truck driving experience with other types of trucks and less hazardous cargo before they can drive a tanker.

In addition, while you technically only have to be 21 to drive a truck across state lines, insurance companies often won’t insure truck drivers who are under 25. And that means many trucking companies won’t hire drivers until they’re 25 or older. All of this already started to lead to a truck driver shortage. And then the COVID-19 pandemic struck, making the shortage even worse.

This is because with most people staying home for much of 2020, there was a lower demand for gas, leading trucking companies to lay off many drivers throughout the spring and summer. Of those who managed to avoid the layoffs, some opted to retire early or switch careers. Now that demand for gas has increased again, we need more truck drivers to transport it. And that’s what has led us to a shortage of truck drivers, especially in the propane and petroleum industries. Fortunately, major trucking companies have taken notice and are taking steps to resolve the issue.

How Are Major Companies Fighting the Driver Shortage?

With the increased demand for gas, propane, and other goods transported by tankers, companies in these industries are missing out on profits—and failing to get their products to the people who need them—simply due to a lack of drivers. So they’ve made many changes in the last year to attract qualified truck drivers to this field.

To start, some companies are trying to streamline the procedures for getting a commercial driver’s license. Currently, there are some regulations that make it more difficult and time consuming than it should be to get a CDL, especially if you train for this license outside of your home state. Getting enough companies to support commonsense changes to these outdated regulations can speed up the CDL process, leading to the ability to hire more truckers as soon as possible.

Some truck carriers also support bringing the minimum CDL testing age down from 21 to 18. This way, new truckers can start training for this career before age 21, allowing for more qualified truckers to enter the field. Such companies are also advertising that they’re happy to hire new truckers and provide them with the training they’ll need to stay safe on the road while excelling in their career. Many even partner with truck driving schools, promising students training and help getting CDL endorsements so they’re guaranteed a job as soon as they graduate. Even though some of the rules have relaxed recently on the age of drivers you should check with your insurance agent so they can relay this to the insurance carrier to make sure this younger driver will be covered.

Finally, many companies are offering sign-on bonuses to attract qualified drivers. These can range from $5,000 to $15,000 per driver, a move that could start to help reduce the driver shortage over time. Employers trying to find more truckers to haul propane and petroleum are also focusing on advertising the fact that tanker drivers make a salary that’s higher than the average—starting at $50,000 and often going over $100,000.

Hopefully, these efforts by major employers will help close the gap when it comes to truck drivers in the propane and petroleum industries. Until then, everyone will keep feeling the effects of labor shortages in these critical fields, especially coupled with the supply chain issues going on right now, too. The best way to protect your own company in these industries is to get the right propane or petroleum insurance coverage while we wait for the supply chain and labor shortage issues to resolve. Contact us today if you have questions about the coverage available to you.

Frank Thompson

Frank B. Thompson is a chartered property and casualty underwriter based in Phoenix. He is the owner of PT Risk Management, an independent insurance company specializing in writing propane and petroleum risk policies throughout the U.S.