KAG Customer Newsletter Fall-Winter 2017

1 KAG Leadership Discuss the Solutions to Driver Shortage Trucking companies across the country continue to face difficulties in finding and keeping qualified drivers. Dennis Nash and Bruce Blaise talk about the reasons for the driver shortage, how it’s affecting the industry and what KAG is doing to ensure it has enough drivers to always meet customer needs. Dennis included Bruce in this interview as part of Bruce’s transition to his new role as CEO, in addition to his current role as President. The next edition of our newsletter will feature a Q&A with Bruce, as Dennis steps into a more-significant role as Executive Chairman. continued on page 2 Q: We’ve been hearing about this driver shortage for what seems like years. Is it really still a problem? Dennis: It is absolutely still a problem, and it’s a big problem. Transportation companies are getting hit from both directions, supply and demand. The supply of drivers will continue to decline in the foreseeable future. Over the next five to 10 years, the baby boomers who make up nearly 25% of drivers will almost all retire. Those vacancies aren’t being filled fast enough by younger drivers. So that’s the reduction on the supply side. On the demand side, we face tough competition for new hires. Some of that is competition for talent within the trucking industry, but our industry also has to compete with other industries. There are shortages of employees in construction and manufacturing, and many job seekers see those industries as more attractive than trucking. LEADING AT EVERY TURN A Publication of Kenan Advantage Group, Inc. www.thekag.com Fall/Winter 2017 Keeping America Going Bruce: Another factor is the ELD mandate that’s coming up in December. Carriers and drivers who were skirting hours of service rules in the past won’t be able to do that anymore. I’ve seen several estimates from a variety of reliable sources that, when it goes into effect, capacity will drop by 3% to 5%. That’s a lot of capacity take-out in an already tight market. Q: Do you see any chance for improvement? Bruce: The trucking business follows the economy in general. As the economy goes up and down, so does demand for trucking. If there’s a recession, that would ease capacity problems. I don’t think anyone wants that, and few people are predicting it, so we don’t see any improvement in the driver-shortage situation. Bruce Blaise, President and Dennis Nash, Chief Executive Officer of Kenan Advantage Group during a recent Town Hall Meeting. Page 7 See How Private Fleet Conversion is the Smart Choice in 2017.