Interview with Michael Darling

Interview with Michael Darling, Vice President of Operations, Western Truck School

Q: With the implementation of Comprehensive Safety Analysis 2010 (CSA), many industry professionals were predicting a loss of 300,000 drivers for 2011. Do you believe this is accurate or exaggerated? What can the industry do to react to this type of loss?

A: Anytime you go to a new system of any kind or change is involved, you have the naysayers and the doomsayers who say the world is coming to an end. That was not the case with CSA 2010 (or what’s being referred to as CSA, now). No, this is an exaggerated claim. What the carriers said is that the amount of qualified drivers has certainly tightened up, but this came at a pretty good time when freight was down. Coming out of recession, if it was going to happen at all, it was the right time to happen. I think the 300,000 is exaggerated, but that was the knee-jerk reaction when the new rule came into effect. Some did not understand the new rule or its implications because of the staggered response from the individual states. More education in the industry is needed to let people know what CSA is all about. This is a tightening up of standards, and it’s within the realm of understanding – within the realm of acceptable change.

As far as reacting to the loss, it’s too soon to see. In certain parts of the country, CSA was implemented sooner than others. From what I’ve heard in talking with the carriers CVTA works with, the downside has not had as much of an impact as they were expecting.

Q: What have been the biggest side effects of rising fuel costs? What are the industry’s plans for dealing with this issue moving forward?

A: The biggest side effects of fuel costs is that the expense is – and will continue to – trickle down to the consumer as the carriers toss out x-number of dollars more to move freight across the country. The freight companies are not in a position to absorb those costs for very long nor do they have the inclination. The fuel costs will eventually have to come out of Joe Consumer’s pocketbook.

The newest innovation, other than more fuel-efficient engines, is more aerodynamic trucks and designs. More trucks are going to use compressed natural gas-type vehicles. Usage of natural gas in trucks has more than doubled in the last 2 years, and I think it’s a trend that will continue to grow.

The same concerns are present on at the school side. You will eventually see a rise in tuition as schools deal with higher fuel prices. A school can only absorb additional costs for so long, and then they have to pass them along to students.   The dollars to operate the model have to come from somewhere, or the model can’t exist.

Q: How have you had to change your business models to accommodate for the lack of funding?

A: A nationwide cut in Workforce Investment Act (WIA) dollars filtered down from the Department of Labor to states and then to the counties has affected just about everyone to a greater or lesser degree, depending on what area of the country you talk to. We see a lot of that in California, which has been impacted by the recession quite badly. The current economic climate, fueled by budget cuts, lower wages and high unemployment, has made it more difficult for us to put students in school. There is a population of prospective students in the workplace that depend on that WIA funding to go back to school. High unemployment rates and long-term unemployment rates happen to be extraordinarily high, about 12-21% in California. To some degree, with those dollars drying up, going back to school simply has not been an option they have been able to pursue. We, like any other business, have responded by close oversight of our budgets and operating costs where we can. We have to watch where every dollar goes, just like anyone else. 

California led us into this recession when the housing bubble burst here, and it continues to drag. Many parts of California are not expected to recover until 2016. In the Sacramento market, our job loss and job recovery has been on par or worse than Detroit. It’s one of the worst in the country. We’re at 12% unemployment and have been for more than 4 years. In Bakersfield, unemployment is between 16 and 21%. San Diego is the best at about 11%, and the problem is it goes through cycles. When we normally slip into a recession, the recovery time takes a year to 2 years before you bounce back. As the dollars dry up, the people make the natural transition into a new career. We slipped into a recession in 2008 and continue to falter. It’s simply a matter of people that now come to us who have been on long-term unemployment who have lost their homes, filed for bankruptcy, and don’t have the money to invest in education or anything else.

Q: Is enrollment up or down across the board? What have you done to address the issue? How have inquiries to starts changed?

A: Is enrollment up or down? It depends on where you are at in the country. I’ve spoken to some CVTA schools that are having a banner year and others that are struggling. That’s a reflection of what’s going on in this economy across the nation. In regard to inquiry to start, the number of starts is down across the board, but again, it depends on the marketplace. We’ve seen drops of 18-30%.   It’s frustrating because  it’s not a matter of people not coming to see the schools. We have a lot of people come in to see about careers. The trucking industry is a very dynamic and viable career. It pays well, has great benefits and can be outsourced.  However, despite that, trucking is still facing a predicted shortage of drivers over the next few years. There are plenty of jobs, but students are not able to find the funds to get personal loans from lenders or assistance from the states to get them into schools.

Our response is ultimately to make sure students get a good education. We’ve gone to alternative funding sources. We’ve gone into companion funding at times when WIA has lost a percentage of its funding. We work with lenders to have alternative funding so students can get help and get out on the road making a living and paying taxes.

Q: In your opinion, what has been the most difficult obstacle for the trucking industry to overcome in the last decade?

A: I would say the economy is the catchall answer, and the state of the economy does reflect directly on the industry. The economy has affected freight; student count; unemployment; the availability of jobs both in and surrounding the trucking industry, even at the school level; and how we do things to deal with lower student count. It’s the same thing with drivers. As freight slows down, so do opportunities for the drivers. I don’t really recall schools ever really slowing down as far as job placement in our markets, but it certainly was a nationwide concern just a few years ago. The trucking industry as a whole has slowed down because freight has slowed down. I’m happy to say that it’s coming back now, and the trends are promising.  Trucking tends to be a good barometer of the country’s prosperity.  If freight is moving and trending up, the economy follows.  If you see freight slowing down, the economy is faltering.

Q: What are the challenges for the trucking industry in the next 3-5 years?

A: Certainly the economic issues are a factor, but there are some signs of life and recovery. The point is that as the economy continues to recover, more and more freight will continue to move. We have to replace an aging workforce and develop a different way of attracting younger drivers. Many drivers are retiring now. The new drivers might not want to be out on the road three weeks at a time. They might want to be out one week. They want to know, “Will my Internet or iPhone work in my truck?” The drivers in the marketplace now aren’t as prone to working as an OTR driver. They want to be home more often. They want more flexibility. We need to be ready to respond with a new way to route freight around the country and with a higher pay package to get the new drivers out on the road.

If our industry can respond and attract the new drivers of the American highway, then I see nothing but positive growth and plenty of opportunity for employment out there, no matter where you live.

Back To The Newsletter