Witness Testimony of Mr. Ray Kuntz, Chief Executive Officer, Watkins and Shepard Trucking Company and Chairman, Amer
Good afternoon Madame Chairwoman Herseth-Sandlin, Ranking Member Boozman and members of the Subcommittee. My name is Ray Kuntz, Chairman of the American Trucking Associations, Inc. and CEO of Watkins & Shepard Trucking, Inc. I appreciate the opportunity to appear here again before the Subcommittee on behalf of ATA to voice our continued support for the intent of H.R. 1824: to expand the scope of programs of education eligible for accelerated payments under the Montgomery GI Bill. ATA commends Representative Michaud for re-introducing this important piece of legislation. We look forward to working with Mr. Michaud, and the Subcommittee to explore ways to enhance the bill so as to realize its goal of improving veterans’ access to the accelerated benefit payment program, particularly as it relates to training U.S. veterans to driver commercial vehicles.
As a matter of background, the American Trucking Associations Inc., the national trade association for the trucking industry, is a federation of affiliated state trucking associations, conferences and organizations that include nearly 38,000 motor carrier members representing every type and class of motor carrier in the country.
TRUCKLOAD DRIVER SHORTAGE ISSUE
Madame Chairwoman, when I appeared before this Subcommittee regarding this legislation two years ago I stated that the long-haul truckload sector of the truck transportation industry annually experiences critical workforce challenges. I would submit here today that this situation has not significantly changed since 2005. Although shortages for this particular sector ebb and flow according to market demands, the driver shortage for the long-haul truckload industry segment still remains and is expected to worsen in the years ahead.
In the next ten years, ATA expects the economy and trucking to grow by 30%. As a result, the demand for long-haul, heavy-truckload services will increase - with the long-haul truckload sector expected to transport 3.3 billion more freight tonnage over this ten year time span than it does today.
Over the same period, economic growth will give rise to a need for a 2.2% average annual increase in the number of long-haul truckload drivers, or the creation of 320,000 additional jobs overall. At least another 219,000 new truck drivers must be found to replace drivers currently of ages 55 and older who will retire over the next 10 years. Combining these two figures places total expansion and replacement hiring needs of the heavy-truckload sector at 539,000 or an average of about 54,000 drivers per year through 2014.
CHALLENGES TO RECRUITING QUALIFIED TRUCK DRIVERS
As I have testified previously, there are several challenges to recruiting long-haul truckload drivers. One particular challenge is the fact that the truck driving industry is heavily regulated by the Department of Transportation, through the Federal Motor Carrier Safety Administration. For safety reasons, which we support, the Agency places many restrictions on motor carriers regarding the type of individual that they can and cannot hire to drive a truck. Additionally, the insurance companies that underwrite carriers, can place even more restraints on a company regarding who they can hire as a truck driver. Through my own personal involvement with Watkins & Shepard’s truck driving school, I can tell you that often times, truck driving schools have to reject more applicants than they can actually enroll, despite the driver shortage.
For example, my company’s trucking school, in the last year, received 1000 applications for truck driving jobs. From that total we were able to train and/or hire 58 qualified individuals. Put another way, last year, we were only able to train and/or hire less than 6% of the individuals who applied.
ATA & INDUSTRY EFFORTS TO ADDRESS THE LONG-HAUL TRUCKLOAD DRIVER SHORTAGE
ATA, its member motor carriers and its state trucking associations have been pro-active on several fronts to address these recruiting and training challenges. In the 2005 highway re-authorization bill, ATA actively sought and gained funding for a new FMCSA grant program to specifically train more commercial motor vehicle drivers. The grant program, funded at $5 million over the five years subsequent to the highway bill’s enactment, is administered and awarded by the FMCSA on a competitive basis. Public, private and motor carrier training schools are eligible to apply for the grant for purposes of making driver training more affordable to more students.
To more effectively assist in the driver recruitment effort, ATA’s Board of Directors allocated $700,000 in October, 2005 for the development of the association’s National Truck Driver Recruiting Campaign. The campaign, which was launched in early 2007, is a nationwide effort to promote positive images of truck driving and to recruit long haul truck drivers for ATA’s 50 state associations and their member motor carriers. ATA made matching funds available to interested state associations for them to purchase driver recruitment advertising media. Television, radio, outdoor advertising and decal programs are examples of what some states are using to serve as vehicles to promote www.GetTrucking.com. The advertising campaign directs new candidates, current truck drivers, motor carriers and trucking schools to the website. GetTrucking.com’s website has two functions: the first is to match new candidates with motor carriers or truck schools, and the second is to provide a job board for current CDL holders and motor carriers.
In efforts to make tuition more affordable for students, motor carrier schools often subsidize or even pay the total amount of a student’s truck driver training. In turn, the student agrees to work for the carrier for a specified time. Others agree to work for the carrier and repay all of or a portion of the tuition. Several ATA carriers, including my own, operate their own driver training and driver finishing schools. However, according to a recent ATA poll of the membership, fewer than fifteen of our member companies currently operate their own truck driver training schools. As a result, our remaining carriers without their own driver training schools, rely exclusively on public and private truck driver training schools for entry-level training of new, qualified commercial vehicle drivers.
Commercial vehicle driver training is essential and must be taught by a reputable truck driving school in order for the driver to obtain the knowledge and skills to successfully pass both the written and road-testing requirements of the commercial drivers licensing test. A company will not hire a driver, nor are any civilian individuals legally able to drive a commercial motor vehicle without a valid, state-issued CDL.
CONGRESS NEEDS TO EXPAND THE SCOPE OF EDUCATIONAL PROGRAMS ELIGIBLE FOR MGIB CHAPTER 30 ACCELERATED PAYMENT BENEFITS
Madame Chairwoman and members of the Subcommittee, for the past six years, an estimated 300,000 service men and women annually transition from Operation Enduring Freedom and Operation Iraqi Freedom to the civilian sector. Of this population, the Department of Defense statistics indicate that 54,000 Army and 24,000 Marine military personnel per year transition out of the military with significant transportation experience.
Just like moving armies and fleets, transporting goods across the country requires monumental logistical efforts and excellent driving skills. For transitioning veterans with military occupational specialties in these areas, professional truck driving may be a natural career path. Although many of these veterans may have experience operating large trucks in the armed forces, this experience does not readily translate to a civilian CDL. Additional education is usually needed to further train these individuals on: basic civilian truck operations, FMCSA regulations; newer, onboard truck technologies; and, on specific state and motor carrier road skills testing and requirements.
As ATA has previously testified, the current MGIB system of educational assistance for transitioning military personnel and veterans is an inefficient funding mechanism for truck driver training programs. ATA believes that H.R. 1824, if enacted, would go a long way toward fixing this particular funding problem and could potentially add a significant number of qualified veterans to the demand-driven, labor pool of commercial vehicle truck drivers. As currently written, this legislation would add commercial truck driving schools to the list of educational/training institutions eligible for the accelerated payment program under Chapter 30 of the Montgomery GI bill. However, according to the Department of Veterans Affairs, adding truck driver training school to the MGIB’s list of educational programs eligible for accelerated benefits would be cost-prohibitive.
Madame Chairwoman, I have reviewed the VA’s list of approved educational programs that are eligible for accelerated benefits payment assistance. ATA applauds the VA for encouraging veterans to enter high-technology career. We believe, however, that many of the approved courses of study on this list do not accurately reflect today’s market-driven career demands and/or opportunities. We would also like to point out that this eligibility list, developed in 2002 by the Bureau of Labor Statistics and the National Science Foundation for the VA Department, was done absent any specificity or direction from Congress. Further, ATA contends that many of the educational programs on the VA’s accelerated benefit payment’s eligibility list are two to four year degree courses that can be appropriately funded through the traditional monthly MGIB educational benefit payment process.
ATA RECOMMENDATIONS FOR ENHANCING H.R. 1824
ATA believes that returning service men and women should be encouraged to pursue careers in well-paying occupations that will contribute most to the U.S. economy. The Department of Labor has identified 14 industry sectors that are expected to add large numbers of new jobs or require new job training to meet the demands of the 21st century’s economy which include transportation, hospitality, financial services and homeland security. Many training programs in these high-growth industry sectors are short term and high-cost in nature, like truck driver training schools. However, truck driver training and these other high-growth industry training programs, are excluded from receiving MGIB accelerated benefit payments because they do not qualify under the VA’s definition of “high technology” educational programs.
ATA recommends that Congress consider amending P.L. 107-103, which authorizes accelerated benefit payments, to refocus the program and better define its scope.
Due to the cost of expanding the accelerated benefit payment list beyond what is currently prescribed by the VA, ATA suggests that the VA-approved list of programs eligible for educational assistance either be replaced or revised. Subsequently, any newly developed list should be an accurate reflection of jobs in industry sectors, such as truck driving, that: 1) are expected to add large numbers of new, well-paying jobs to the U.S. economy and 2) require educational career training that is truly high-cost and short term in nature.
If further cost-savings must be realized, ATA recommends that Congress limit the length of training eligible for funding through the MGIB accelerated benefit payment program to one year or less. Most two year or four year degree educational programs may not fall within the original intent of the MGIB accelerated benefit program - to improve the affordability of relatively high cost, short term programs.
Madame Chairwoman and members of the Subcommittee, not all veterans are college-bound. Accelerating the educational benefits available through the MGIB for a high-growth industry training program, such as truck driving, would allow veterans to complete an educational program with immediate employment results, without incurring short-term debt. Such a move would also make it possible for veterans, transitioning from the military or otherwise, to more readily support a family than if they were to enroll in a two – four year educational course.
For those individuals, like our nation’s veterans who are willing to work, are careful, safe and responsible, the trucking industry offers them a wonderful opportunity. In as little as two to three months, upon completion of truck driver training and by successfully passing a state commercial drivers’ license test, a veteran can be gainfully employed as a long haul truckload driver with a high quality trucking company, making an entry-level salary of approximately $40,000 a year, with benefits. This figure does not include potential “sign-on” or other bonuses that some trucking companies use to attract and recruit new drivers. Additionally, as truck transportation is the lifeblood of our nation’s economy, truck driving jobs are not likely to experience “downsizing” nor will they be “outsourced.”
In closing Madame Chair, I would like to reiterate ATA’s support for the legislative intent of H.R. 1824. However, we believe that, in order to move this bill forward, substantive changes need to be made to the MGIB’s accelerated payment benefits program. First, the VA’s current list of educational programs eligible for payment assistance should either be replaced or revised to reflect eligibility for training in HIGH-GROWTH industries rather than solely in HIGH-TECHNOLOGY industries. Further, in order to better align the accelerated benefits program with its original intent of providing affordable financing for high-cost, short term educational training, the program should be limited to fields of study that are one year or less in duration.
ATA looks forward to working with Representative Michaud and the Subcommittee on ways to enhance H.R. 1824 to improve veterans’ access to educational opportunities in high-growth, well-paying industry sectors, like truck transportation. This concludes my remarks Madame Chairwoman. I would be happy to answer any further questions.