U.S. oil-company job cuts are costing skilled workers their jobs. Though unfortunate, this is proving to be a boon for trucking companies desperate to fill big-rig driving positions. Many of these workers come already equipped with a commercial license and experience in operating heavy machinery.
These workers are more accustomed to being away from home for longer periods of time due to the remote nature of oil work. Adjusting to being on the road rather than the rig isn’t difficult for hardy energy workers.
The Rise of Trucking
These career transitions are ones that the trucking industry would like to see repeated. As the employment squeeze drags on, fleets are looking for innovative ways to keep their payrolls filled and their operations running smooth.
A resurgent U.S. economy has increased demand for cargo shipments and spiked competition for capable and experienced workers. Mass firings in the Bakken oil fields amid the plunge in crude markets are helping companies take the pressure off of an estimated 35,000 long-haul truck driver deficit.
Bob Costello, chief economist for the American Trucking Associations (ATA) reported “that there are a lot of happy truckers out there except for one issue, and that’s the truck-driver shortage.”
He went on to state that the difficulty these companies are having in meeting their obligations could result in some interesting industry migrations. This serendipitous timing masks the fact that attracting and retaining truck drivers is one of the biggest problems motor carriers have. In some areas annual truck driver turnover tops 100 percent, according to Bloomberg Intelligence analysts.
Some oil-and-gas industry veterans have already started to fill up the truck driver academies at Swift Transportation, reported Chief Executive Officer Jerry Moyes on a January 29 conference call. Other groups reporting big spikes from laid-off energy workers include Covenant Transportation Group and Celadon Group.
The Fall of Oil
If oil prices remain precipitously low, the global oil industry is expected to axe at least 50,000 more jobs than have already been cut. Over-the-road trucking jobs could see a bump of anywhere from 10,000 to 12,000 filled jobs.
Oilfield-services company Schlumberger Ltd. has cut 9,000 jobs and is estimated to cut another 7,000 positions this quarter alone. Halliburton, the world’s largest provider of hydraulic fracturing services, announced two weeks ago that it will cut as much as 8 percent of its 80,000 strong global work force this year.
Being away from home has been a drag on trucking companies’ ability to meet their recruiting goals, especially those that make the longest hauls and pull freight from just one consumer. Truck driver shortages are so longstanding that many analysts don’t estimate any big breaks from tradition anytime soon, even with the recent layoffs in the energy sector.
That’s why many motor carriers aren’t expecting a huge payoff in their recruiting goals. The expectation is for more of a slow trickle. It’s more likely the industry won’t see the benefits until the second half of the year. This will be when former oilfield employees who don’t have a commercial license complete the typical four to eight week training courses.
Money Makes the Terms
As the fortunes of one industry fall, others rise. While there’s friction in any sort of job change, this type of competition has been going on for a long time.
As domestic exploration and energy production surged in the past years, the trucking industry faced heavy competition for truck drivers and skilled technicians. Oil companies could offer lucrative, short-haul jobs that afforded employees more time at home with friends and family. During those times the revolving door went the other way.
Then after crude prices fell by half to around $50 last month, oil companies began to slash spending by up to 40 percent. A recent tally of working oil-drilling rigs has dropped by more than a third since October of last year. They’re currently at their lowest level since July of 2011.
As rising and falling tides affect industry boats, these cyclical employment transitions will continue. At least for now, the trucking industry will be providing a welcome buffer to those chopped from the energy sector, and everyone’s happy about that.