Trucking for Jobs in Northwest Minnesota

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.

Table 1

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.

Regional Differences

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).

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)

Recent Growth

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.

Table 3

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)

High Demand for Truckers

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).

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).

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

Filling the Demand

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.