by Tim O'Neill
May 2013
Trucks are an essential mode of transportation for moving valued goods throughout Minnesota and the United States. With 481 firms supplying 2,197 jobs, Truck Transportation is also a major and necessary part of the economy in Northwest Minnesota. Truck Transportation is a specific subsection of Transportation and Warehousing in the North American Industry Classification System (NAICS). Overall, the concentration of Transportation and Warehousing industries in Northwest Minnesota is much lower than the nation as a whole. However, Truck Transportation, specifically General Freight Trucking, has a higher concentration within the region than the nation (Table 1). Industries in Truck Transportation provide over-the-road transportation of cargo using motor vehicles, such as truck and tractor-trailers, according to the Bureau of Labor Statistics. Truck Transportation can be further divided into two sectors, General Freight Trucking and Specialized Freight Trucking.
| Northwest Minnesota Industry Employment Statistics, 2012 | ||||||
|---|---|---|---|---|---|---|
| NAICS Industry Title | NAICS Code | Number of Firms | Number of Jobs | Location Quotient | Total Payroll* | Average Annual Wages* |
| Total, All Industries | 0 | 17,293 | 213,893 | 1.0 | $6,779,841,076 | $32,552 |
| Transportation and Warehousing | 48 | 906 | 5,882 | 0.7 | $202,670,163 | $33,696 |
| Truck Transportation | 484 | 481 | 2,197 | 1.1 | $79,685,809 | $34,320 |
| General Freight Trucking | 4841 | 351 | 1,604 | 1.2 | $56,490,282 | $34,632 |
| Specialized Freight Trucking | 4842 | 130 | 592 | 1.0 | $23,195,527 | $33,644 |
| Source: DEED Quarterly Census of Employment and Wages (QCEW), * DEED QCEW 2011 Annual Data | ||||||
General Freight Trucking includes establishments that handle a wide variety of commodities, generally on pallets, which are then transported in a container or van trailer. Establishments, as such, provide for a combination of local pickup, local sorting and terminal operations, line-haul, destination sorting and terminal operations, and local delivery.
Establishments in Specialized Trucking are primarily engaged in the transportation of freight which, because of size, weight, shape, or other inherent characteristics, requires specialized equipment. Such equipment may include flat beds, tankers, or refrigerated trailers.
Overall, Truck Transportation in Northwest Minnesota is not much more highly concentrated than in the nation as a whole. With a more focused analysis, however, the concentrations of General and Specialized Trucking become more pronounced within the four distinct regions of Northwest Minnesota. Focusing on employment, EDR 2 — Beltrami, Clearwater, Hubbard, Lake of the Woods, and Mahnomen counties — has just 0.8 percent of its employment devoted to Truck Transportation, either General or Specialized. On the other hand, EDR 4 — Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse, and Wilkin counties — has 1.6 percent of its employment devoted to Truck Transportation, double that of EDR 2. EDR 1 — Kittson, Marshall, Norman, Pennington, Polk, Red Lake, and Roseau counties — has 1.4 percent, and EDR 5 — Cass, Crow Wing, Morrison, Todd, and Wadena counties — has 1.1 percent of its total employment devoted to Truck Transportation.
Focusing on location quotients is another way of discerning the importance of trucking in Northwest Minnesota. Location quotients are simply a ratio that compares the percentage of employment in a particular industry in a local economy to the percentage of employment the same industry constitutes in the national economy. In other words, location quotients are a measure of industry concentration. A location quotient equal to 1.0 means that the concentration of a particular industry in a local economy is exactly the same as the concentration of the same industry nationally. A location quotient of 2.0 would mean that the concentration of a particular industry in a local economy is twice that of the same industry nationally. Looking at EDR 2 again, the location quotient for Truck Transportation is 0.6, while the quotient for General Freight Trucking is 0.7. As such, the concentration of trucking within EDR 2 is less than that of Northwest Minnesota and the nation. In EDR 4, however, the location quotient for Truck Transportation is 1.3, while the quotient for General Freight Trucking is 1.5. Trucking within Region 4 is much more highly concentrated than in EDR 2, as well as Northwest Minnesota and the nation.
Along with differences in employment and concentration, wages for truck drivers also vary widely within Northwest Minnesota. For example, the hourly median wage for truck drivers within EDR 4 is more than 10 percent higher than the median wage for truck drivers in EDR 5, just a few counties east (Table 2).
| Employment and Wages by Region, 2012 53-3032 Truck Drivers, Heavy and Tractor-Trailer | |||
|---|---|---|---|
| Geographic Area | Employment | 25th Percentile Wage | Median Wage |
| EDR 1 | 720 | $13.31 | $16.21 |
| EDR 2 | 440 | $15.34 | $16.98 |
| EDR 4 | 1,790 | $15.19 | $17.90 |
| EDR 5 | 890 | $13.85 | $16.13 |
| Northwest Minnesota | 3,830 | $14.50 | $16.94 |
| Minnesota | 31,180 | $15.88 | $18.93 |
| Source: DEED Occupational Employment Statistics (OES) | |||
Despite the recent economic recession, Truck Transportation has witnessed healthy growth during the past decade, especially in Northwest Minnesota. Between 2002 and 2012 the region added more than 200 Truck Transportation jobs for 11 percent growth. Of these added jobs more than 180 were in General Freight Trucking. This constitutes 13 percent growth over the past decade in Northwest Minnesota, which more than doubles the 6 percent growth witnessed in Minnesota overall (Table 3). Much of this growth can be attributed to EDR 4 alone.
| Northwest Minnesota Industry Employment Statistics, 2002-2012 | |||||||
|---|---|---|---|---|---|---|---|
| NAICS Industry Title | NAICS Code | 2002-2012 Job Change | 2002-2012 Wage Change | ||||
| Numeric Change in Jobs | Percent Change in Jobs | Minnesota Job Change | Change in Wages | Change in Wages | MN Change in Wages | ||
| Total, All Industries | 0 | 4,450 | 2.1% | 2.4% | $143 | 29.6% | 28.7% |
| Transportation and Warehousing | 48 | 5 | 0.1% | -6.8% | $139 | 27.7% | 11.2% |
| Truck Transportation | 484 | 218 | 11.0% | 7.3% | $165 | 32.9% | 24.4% |
| General Freight Trucking | 4841 | 184 | 13.0% | 6.1% | $184 | 38.1% | 25.4% |
| Specialized Freight Trucking | 4842 | 33 | 5.9% | 10.6% | $115 | 20.8% | 21.9% |
| Source: DEED Quarterly Census of Employment and Wages (QCEW) | |||||||
Along with the recent growth in Truck Transportation, the demand for truckers in Northwest Minnesota is projected to increase significantly through 2020. This projected increase in demand can be attributed to both the recent economic recovery and an aging workforce. On one hand, while the overall economy of Northwest Minnesota has grown by only 1.3 percent since 2010, certain sectors that rely on trucking have grown much more significantly. For example, Natural Resources and Mining is up nearly 16 percent, Professional and Business Services is up nearly 10 percent, Manufacturing is up nearly 8 percent, and Construction is up more than 3 percent. Projections for such sectors show significant growth as well. With more jobs and increased economic activity, the demand for shipping and trucking follows suit (Table 4).
| Northwest Minnesota Industry Employment Statistics, 2010-2012 | ||||
|---|---|---|---|---|
| NAICS Industry Title | 2012 Data | 2010-2012 Job Change | 2010-2020 Projected Growth* | |
| Number of Jobs | Numeric Change in Jobs | Percent Change
in Jobs |
||
| Total, All Industries | 213,893 | 2,721 | 1.3% | 14.4% |
| Manufacturing | 27,130 | 1,897 | 7.5% | 16.6% |
| Professional and Business Services | 9,450 | 846 | 9.8% | 25.6% |
| Trade, Transportation, and Utilities | 45,825 | 722 | 1.6% | 12.4% |
| Natural Resources and Mining | 4,760 | 651 | 15.8% | 7.1% |
| Construction | 10,317 | 308 | 3.1% | 39.9% |
| Leisure and Hospitality | 25,751 | 5 | 0.0% | 8.9% |
| Educational and Health Services | 59,654 | -120 | -0.2% | 31.1% |
| Other Services | 6,172 | -158 | -2.5% | 7.5% |
| Financial Activities | 7,191 | -254 | -3.4% | 9.7% |
| Public Administration | 14,560 | -834 | -5.4% | 36.5% |
| Source: DEED Quarterly Census of Employment and Wages (QCEW), *DEED Employment Outlook Program | ||||
On the other hand, Northwest Minnesota is witness to an aging population. As the baby boomers begin to enter their 60s, the average age in the labor force has shifted upward, and the number of retirees is projected to increase. The American Trucking Association, which represents the big trucking carriers, stated in November 2012, that 'the need for drivers is acute' and that 'long-term trends could cause the shortage [in truck drivers] to explode in the next decade,' mainly from retirement and turnover. Over the next decade, the net gain in hires for heavy and tractor-trailer truck drivers in Northwest Minnesota is projected to be around 1,165, for a 27 percent growth. Another 860 replacement hires are projected to cover for retirements and turnover (Table 5).
| Northwest MN Employment Outlook: Heavy and Tractor-Trailer Truck Drivers | ||||||
|---|---|---|---|---|---|---|
| Occupation | 2010 Estimated Employment | 2020 Estimated Employment | Percent Change | Total Change | Replacement Hires | Total Hires |
| Total, All Occupations | 251,220 | 287,455 | 14.4% | 36,235 | 59,430 | 96,750 |
| Transportation and Material Moving Occupations | 15,834 | 18,521 | 17.0% | 2,687 | 3,710 | 6,410 |
| Heavy and Tractor-Trailer Truck Drivers | 4,296 | 5,461 | 27.1% | 1,165 | 860 | 2,020 |
| Source: DEED Employment Outlook Program | ||||||
All signs point to an increasing need for truck drivers in Northwest Minnesota. Truck driving is highly concentrated in certain regions of the area, the growing economy will put increased pressure on the need for Truck Transportation, and the aging workforce will result in a renewed need for drivers as current drivers retire or leave the occupation. Unfortunately, the demand for drivers is not being currently met. Factors contributing to this phenomenon include the type of work and compensation. Truck drivers many times sacrifice days if not weeks on the road, often living from the truck itself. This poses serious complications for those individuals with spouses and children. Not surprisingly, more than 85 percent of truck drivers within Northwest Minnesota are male. On top of this, wages for truck drivers have lagged behind inflation. Accounting for inflation, the median hourly wage for heavy-truck drivers in Minnesota fell from $18.22 to $17.00 between 2007 and 2012.
Despite these barriers, however, the outlook for truck driving in Northwest Minnesota remains strong, especially in EDR 4. As long as the economy continues to grow, the demand for trucking will grow as well. For students and job seekers interested in trucking driving, a high school diploma or equivalent is required. Once short-term on-the-job training is complete, drivers will be able to hit the road with a career that shows much promise for the future.
