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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.

 

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Filed Under: Driver wages Driver retention TCP HR.
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doug webster

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I make almost $2,000 gross per week in another trade . I left trucking in 2008 and sold my truck my friends are working 75 hours per weeks as owner-operators and are lucky to net $20.00 per hour I average $42.00 per hour

Anonymous

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Trucking is at its lowest point and falling fast.

Anonymous

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As much as money trucking must find a way to increase home time to make driving more comparable to what other tradespeople work. If more driving jobs guaranteed drivers would be home by Friday afternoon and be able to enjoy a 48 hour weekend at home without losing income more people would consider it a job they could live with. Even jobs that are considered 'Essential Services' typically get more home time than truckers. A 36 hour reset is a sick joke. Make trucking a job and Not a Lifestyle...unless a driver freely chooses to work more time they should be home every weekend if they want. Combine that with a livable wage and retention issues will be reduced.

Anonymous

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As much as money trucking must find a way to increase home time to make driving more comparable to what other tradespeople work. If more driving jobs guaranteed drivers would be home by Friday afternoon and be able to enjoy a 48 hour weekend at home without losing income more people would consider it a job they could live with. Even jobs that are considered 'Essential Services' typically get more home time than truckers. A 36 hour reset is a sick joke. Make trucking a job and Not a Lifestyle...unless a driver freely chooses to work more time they should be home every weekend if they want. Combine that with a livable wage and retention issues will be reduced.

blzerblu72

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This shortage has been comming for a long time. Government regulation, police, disrespect for trucks and drivers only scratch the surface. The people you select and train to WORK WITH the drivers are close to being the number one problem retaining drivers. If the people dispatching the driver has never had to experience what a driver goes through, how in the world can they relate when a driver has a problem, or know what the truck/and drivers capabilities are? Want to retain drivers? Don't treat them like they are a part of the machine they are driving. Throwing money at the problem alone will never fix it. If a driver cannot find a balance in his/her job, they will never stay. It's not just a money problem.

Anonymous

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I drive a truck. I've been driving them for 30 years, and since day one, I've been listening to two pieces of crap. First, the golden age of trucking is over and all the good ones got out, and second, the good times are just around the corner. I've given up hoping for the second, and I never believed the first. I earn over $100,000 a year from this truck. That's still minimal considering the time I devote to it, and I'm one of the lucky ones that actually gets home nearly every weekend.

Anonymous

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Too much regulation not enough pay companies are all too much willing to pay out claims than fact find first

flinshot

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I agree with the other comments. The economic model I am familiar with is : the higher demand and fewer resources= you pay more for the resource being the driver. Since the 1970s drivers wages have not kept up with inflation at all. We should be making about $210,000+ a year for the responsibilities that we have. That would be net and not gross. Drivers were making $125,000 back in the late 1970s when I was a security guard.

Anonymous

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You are away from home, sleeping in a truck. Your life and health are at risk every day. You have several layers of government agencies and thousands of Lawyers just waiting for you to make a mistake. You can be fined out a weeks pay or more in a heart-beat. You are expected to: Work 100 Hrs Required to Log 70 and actually get paid for 50. What other job does anyone do where they are told that their work time is for "Free"? You are responsible for equipment, travel times, and schedules, but have no say in any of it. I could go on all night! This is a TRADE...We are supposed to be professionals. And we are treated like dirt by all and sundry. Can't find drivers? Look In The Mirror! People are voting with their feet! And going elsewhere!

Anonymous

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nowhere near enough pay get out of the 70,s

Anonymous

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