CHICAGO, Feb 6 (Reuters) - A chronic shortage of drivers means America's long-haul trucking companies are struggling to capitalize on cheap fuel prices that could allow them to take goods shipments away from railroads.
A 50 percent fall in oil prices from their peak last year should have erased some of the cost advantage railroads enjoy, especially for longer hauls.
But for customers hoping to save money by switching from train to truck, the lack of drivers makes that harder.
"It's a nice theory, but the math doesn't add up because of the driver shortage," said Jason Seidl, an Cowen & Co analyst.
An increasingly common way of shipping freight is by "intermodal" standardized containers that can be hauled by truck, ship and train. Goods coming from China, for instance, are hauled thousands of miles from the West Coast by train and then put on trucks for a shorter haul to their destination.
The lower the price of diesel goes, the more competitive standard shipping by truck becomes versus intermodal transport, so long as carriers can get enough vehicles on the road to achieve economies of scale.
During a Jan. 28 conference call, truckload carrier Knight Transportation Inc said if diesel fell by about $1.50 a gallon from the $3.80 the firm paid last September, trucks would be more competitive than intermodal for hauls of up to 750 miles, versus around 500 miles last September.
Whether diesel will fall that far remains to be seen. But with prices down around $1.00 per gallon from six months ago, carriers are still complaining of trucks sitting idle due to a lack of drivers.
Last year lobby group the American Trucking Associations (ATA) said the industry is lacking 35,000 drivers and that shortfall could grow to around 240,000 by 2020 if not addressed. The shortage comes amid rising demand for freight, as the ATA said truck tonnage rose 3.5 percent in 2014.
At the same time, intermodal rail shipments rose 5.2 percent to a record 13.5 million in 2014.
Driver shortages are common when the economy grows. But demographic changes are compounding the problem. The average truck driver is 55, and more drivers are retiring. Not enough younger workers are signing up, forcing companies like Werner Enterprises Inc, Celadon Group Inc and J.B. Hunt Transport Services Inc to offer signing bonuses to new drivers or in some cases to cover the up to $7,000 it costs to get a truck driver's license.
Many truck firms raised driver pay late last year by between 10 percent and 15 percent.
When reporting results on Feb 4, logistics firm Con-way Inc Douglas Stotlar noted that a 2.3 percent decrease in fourth-quartrer revenue at the company's truckload unit "was primarily attributable to the industry-wide driver shortage, which continued to impact our ability to seat tractors with qualified drivers."
Some hope that if the U.S. oil industry dramatically scales back production, it will free up more truck drivers. But Cowen & Co analyst Seidl says that even if thousands of the estimated oil industry's 100,000 drivers switch jobs, "that will be a drop in the bucket" compared to the estimated 2.7 million U.S. truckers.
Railroad executives also highlight the driver shortage when asked if falling fuel prices can help truckload firms take market share away from them.
"I don't think low oil will suddenly, magically translate into more truck drivers," said Wick Moorman, CEO of No. 4 U.S. railroad Norfolk Southern Corp.
After being caught out by a spike in demand last year that left them struggling, analysts say the railroads may actually be able to regain lost business if they continue to improve service levels.
But Jack Koraleski, executive chairman of No. 1 U.S. railroad Union Pacific Corp, thinks the net result "will be a wash."
"I don't think customers are going to make long-term shipping decisions based on short-term (oil) price moves," he said.
Reporting By Nick Carey; editing by Andrew Hay