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Friday Focus: Driver Wages and The Driver Shortage

In this Friday's editorial focus, we talk driver wages and driver shortage, and the importance of balance.

"You're probably going to see number of carriers bumping wages two, four, six cents a mile just to protect their driver base," said Richard Mikes, managing partner with Transport Carriers Association (TCP) in a recent interview with Today's Trucking for a story about driver wages.

It was interesting timing as the day before Maverick Transportation announced a wage increase for all current and new hirers.

And yesterday, Baylor Trucking, a 300-truck dry van fleet located in Milan, Indiana, announced a pay increase, bumping their drivers up to $.44 per mile, effective February 1, 2012.

The cherry on top for Baylor drivers, however, is the minimum weekly pay of $1,000 so that their over-the-road drivers have financial assurance.

During my conversation with Mikes on driver wages, he related a discussion he had had with a carrier. She sat back and looked at her drivers, Mikes said, at how many runs they made in a week and what they were getting paid. She asked herself, "Would I do that job for $50,000?

"No, I wouldn't," she told Mikes.

"Sixty-thousand is not an unreasonable rate to expect to be paying these drivers," she continued. "But will I go out and raise my wages tomorrow? Of course not. But the whole industry is going to have to gravitate towards that in the next few years," she said, "or we're really going to be in a mess."

The conversation stemmed from TCP's 2011 fourth quarter Business Expectations Survey that found that sixty-five percent of carriers believe that wages must be more than $60,000 — up from 49 percent in May 2011. During the same time period, the American Trucking Association's (ATA) data in driver turnover rates jumped from a range of 40 to 50 percent up to nearly 90 percent.

"Here we are now with two-thirds of the carriers versus half saying that we have to have wages above $60,000 to attract and retain people in this industry," Mikes says.

Here's Some Money, Now Go Away Driver Shortage

There's the long-term problem and the short-term problem. Long-term, yes, there is the issue of an entire generation retiring — a generation that decided to stick around when the economy took a dive. "We dodged a bullet there," Mikes says.

And here in Canada, a recent report by the Canadian Chamber of Commerce noted that the trucking industry is going to be short 37,000 drivers.

But, Mikes explains, recent reports have shown a big pop in freight rates increasing — well before the spring shipping season. "It's happening now, so we've got a lot of pressure to just retain drivers, not only increase the pool of drivers."

Yet in that same TCP survey, carriers reported that current ROI isn't keeping pace with costs. Imagine, Mikes explains of the current dilemma, that you are running your old trucks, replacing as necessary. You aren't going to buy any new trucks to meet demand. So you increase your supply of trucks because you aren't getting adequate return — you've got 10 percent unseated, anyway — and the only way that you can get drivers to drive your trucks is to bump wages up 20 percent.

"How are you going to balance that 20 percent increase when you are going to immediately give a nickel to stop the churning of drivers between carriers, and you're getting two bucks a mile so there's a two percent increase you're going to shippers with just on pay?"

For TCP, that's the message they are trying to get out to carriers for 2012: balance. Balancing available trucks with rising freight volumes and balancing driver wages with existing rates.

While drivers clearly do deserve a wage increase, throwing money at the problem blindly is not going to solve the long-term driver shortage, nor will it solve the short-term driver rentention problem. The solution must be strategic and incorporate additional programs (we explore this more in the upcoming March Issue).

While I haven't had a chance to speak with anyone from Baylor on more details about the wage increase, on the surface it looks good.

The minimum $1,000 a week gives their drivers some stability in what is often a very unstable profession from day-to-day. They thought about the need for money, but they also thought about financial security. Good for them.

The biggest hurdle to the driver shortage may not be an absence of warm bodies — we have enough people on this continent to fill the seats. The real problem is convincing people, the Gen Y'ers, that trucking is a cool, important job (that pays well, too!).

A fellow trucking journalist — much more seasoned than I am — sent me a survey on the 200 most popular jobs in America. Trucking was #171. "I don't put a lot of faith in these things," he wrote "but to the person on the outside looking in, this doesn't paint a very appealing picture of the job."

It's time to paint a more attractive picture, and increasing wages is just the start.

So, a weekend challenge: tell us why young men and women, and those looking for work, should consider being a professional driver.

 
Email Jason Rhyno     Comment Below
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H LANGE

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It is like sprinking Fairy dust to a huge problem. Driving a truck is a very good job but it has to going when the shipper load is ready. A driver has to go at any hour of the day and for long hours. Driver rates have to go up a lot more then is being offered . Other trades pay more so young people are not going to start driving truck. The trucking industry has start paying and treating drivers as trades people . NOT GET AS Much work for free as posible All truck carries do this.

Burt

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As an EX OTR driver all this talk about more money makes me smile. The paperwork and logbooks and DOT have done everything possible to make us experienced drivers look for other options. On one hand they offer us money, and on the other hand they make life impossible on the road. It is a big joke. There is NO DRIVER shortage. There is an abundance of stupid laws to make the industry less safe and motivate good drivers to leave. Have fun.

Anonymous

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I wouldn't at this point in time, recommend a job in trucking to any one. I agree there are so many things that could be done to make being a professional truck driver a good occupation, the problem is at this point in time it's not, it's horrible. Most decently paying trucking jobs require that you cannot have a life outside of your job, it guarantees a dysfunctional family should you want to have one. Health issues caused by sitting for long periods and not being able to use a bathroom when you need to, constant stress of dealing with uneducated and bad drivers on the roads, stress of attempting to be on time despite traffic and weather, and all others aside...the remuneration for doing the job is not worth the things you give up, like family, friends and health. No, at this point in time, the way things are, I could not conscionably recommend being a professional truck driver to anyone.

towoc999

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Hello ! Better pay , yes it is needed to make the job appealing to new hire as well as already on the seat driver ,what we need to is recognition of waht we do , paying for every hour spent waiting to be loaded and or unloaded , having good fringe benefits for shower meals , having internal rules so no one have to cheat their logs and making the customer understand that traffic delays are for real . As for not being home often enough is more a logistic problem than drivers problem ! why a driver need to cross the whole country , they have hubs to switch trailers that could make drivers driving almost like if they were local drivers and be home almost every night ! would it it better , yes for the driver and yes for the company as well .

Anonymous

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I wouldnt recommend this industry to an ANIMAL. Get a REAL JOB where you are HOME with your friends and family! There is ZERO future in being a truck driver. Mostly Illegal Aliens fill our truckstops today! You will be treated like Dirt and you are an expendible clown in the eyes of "management" who are hired from the fast food industry. FORGET the IDEA of being ABUSED in this rediculous industry.

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