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Focus: Transportation Management

Feature Article from Our Transportation Management Subject Area - See All
 

From SCDigest's On-Target E-Magazine

- March 3, 2015 -

 

Supply Chain News: Is Higher Pay Really the Key to Solving Driver Shortage?

 

Wages are Headed Up, but Impact as Yet Unclear; Maybe Carriers Should Increase the Respect Quotient Too


SCDigest Editorial Staff

 

The driver shortage for US trucking firms continues to be a real issue, and a key factor in why most trucking firms are not adding capacity on pace with the growth in freight volumes - they can't find the drivers the need to sit in new tractors.

That in turn is leading to higher rates for shippers.

SCDigest Says:

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Respect, however you define that, may be one key issue. Is anyone surprised that many drivers don't feel they are getting enough respect from the carriers they work for?
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Pay naturally enough continues to be a key issue in thinking about the driver shortage, both in absolute terms and relative to wages in the construction industry, which is usually cited as the sector that most competes with trucking for human resources.

Depending on the source, over the road truck drivers in the US on average make about $45-50,000 annually. There is a general consensus that the pay level needs to get up into the low $60,000s to attract and maintain more drivers.

And indeed, it seemed virtually every major carrier announced driver wage hikes in the past year, with some involving as much as a 20% increase in per mile rates. Gordon Klemp, who heads the National Transportation Institute, says the pace of these raises has also increased. A typical cycle of pay hikes across the industry takes about 33 months, he says. This latest cycle will take only 13-15 months to complete.

But have these increases had any real impact? Will it going forward? Walmart offers drivers pay in the low $70,000s and a better lifestyle than that had by most over the road truckers, but it continues to advertise aggressively for new drivers on radio programs. Truckload carrier Heartland Express is said to have already pushed driver pay into the low $60,000s and even a bit higher - and seems to face the same driver challenges as others lower on the pay scale.

The latest data from the American Trucking Associations found the US driver turnover in Q3 was a still high 97% - up a percentage point from the 96% pace seen in Q2.

Factors Beyond Pay?

There is of course no doubt that pay rates have an important impact on the attractiveness of truck driving as an occupation. But there are other factors as well, ones that perhaps ought to receive more notice.

Perhaps surprisingly, one such factor is as simple as a driver feeling like he or she is getting respect from a carrier.


(Transportation Management Article Continued Below)

 
CATEGORY SPONSOR: SOFTEON

 
 

John Elliott, CEO of expedited and regional truckload carrier Load One in Taylor, MI, found that out in a recent survey of its drivers. He told the TruckingInfo.com web site that his company's research showed the top factor in driver retention was "Respect, hands down. It was almost two to three times higher in scoring" in the surveys.

That could explain why turnover historically was much lower at smaller trucking firms, where there was a more personnel touch to driver relationships. However, recent ATA data has shown that turnover at under $30 million trucking firms is now almost as high as at larger ones - much different than in the past. Many in the industry, however, still believe smaller carriers still do a better job retaining drivers.

So respect, however you define that, may be one key issue. Is anyone surprised that many drivers don't feel they are getting enough respect from the carriers they work for?

 

Driver Shortage Expected to Continue

Source: American Trucking Associations

 

 

Lifestyle is of course another issue, which is why turnover in private fleets and the less-than-truckload sector is much lower than for truckload companies - their drivers get to come home most nights. On top of that, they pay better too. An ATA's survey found that private fleet van drivers, at $73,000, earned 58% more than the truckload van average. The National Private Truck Council's annual benchmarking study found that average pay for drivers overall in the private fleet community was $62,000 in 2013.

There doesn't seem to be a whole lot that truckload carriers can do about that issue.

Another key factor: productivity. A driver is only making money when he or she is on the road. So, delays at the shipper and the consignee - which can often last hours - reduce the amount of time drivers can be on the road making money. It's a form of underutilization.

"People get hung up on the cents per mile, when the real enemy is the inefficiencies around what the driver has to go through in order to optimize their earning potential," says Rim Yurkus, CEO of Strategic Programs, which does engagement surveys of current drivers as well as exit interviews for carriers.

Finally, SCDigest recently reported on how lack of parking space for drivers needing to rest is a growing issue that is in fact causing some to leave the occupation. (See Forget the Driver Shortage - Parking Spots for Truckers Increasingly Hard to Find.)

Drivers in many regions now say it can take hours to find a spot, an exercise in frustration that again as with loading and unloading delays hit a driver's productivity and in the end income. Surveys have shown that stress related to the parking situation is a key factor in many drivers deciding they have had enough.

The bottom line: the driver shortage is now very real, and pay is unquestionably rising - though it's too early to say if that if rising wages are really having an impact. But challenges in driver hiring and retention is a complicated equation, and the industry should look at other factors beyond per rates per mile - starting with one that should be free, a little R-E-S-P-E-C-T.


Do you think driver pay is the main issue in the driver shortage? Could carriers show a little more respect for their drivers? Let us know your thoughts at the Feedback button (for email) or section (for web form) below.

 


   
 

Recent Feedback

It all depends on what a person's definition of respect is. To some it is about money and others it is about "give me my paperwork and get the hell out of the way." It may mean to listen and fix every problem I bring to you. Alot of companies believe respect is a one way street. I gave you a job and I give you my money, so that is the only real respect I need to show.  Mostly respect is a matter of opinion.   By and large, unless you have a contract or something to can put in front of a judge, a trucking company can abuse you anyway they chose. You can back down and thank them for the choice or tell them where they can go. I worked for 2 different large OTR carriers in the early 90's and got tired of the business and had a friend hook me up with a non union LTL company. I've never been happier. My last year W-2 with the OTR company was comparable with my first year working LTL.  I made almost 7,000 more dollars and was home every night and off all weekends and holidays. 


Willis Vance
Company LTL driver
Dayton Freight
Mar, 17 2015

I was in accident that was not my fault when another truck hit my truck in a snow storm. I stopped to avoid hitting 3 people in a car and jumped out of the truck before it was hit. The insurance company has refused to pay for the repairs. I paid for some repairs out my pocket. I am now sitting at a salvation army homeless shelter with 2 other truck drivers who do not smoke. (Note: I do not smoke or drink. I worked on construction prior to taking this job with a lunch box working 70 hours per week at over $20.00 per hour plus overtime. The government will pay the $100.00 to get my permit back and all three drivers are going to get retraining and other jobs. I had been running more trucks and reefer trailers until we stood up to them on waiting time pay. With The very next load taken to their docks, we were blacklisted and told we would not get any of the money owed for loads hauled and not yet paid. I could fill 5 trucks tomorrow if  I knew I would get paid enough to pay the truck drivers $20.00 u.s. or $22.00 c.d. per hour off the log book and overtime after 10 hours per day (50 hours per week)and $140us. per day for layovers or resets.


Stephen Webster
owner
Virtual finity
Mar, 31 2015

Well let's see, wages haven't gone up since 1970 while cost of living has skyrocketed. See how many people want to work $1.45 an hour in today's world. That's was federal min wage in 1970. It is roughly $9.03 in today's money. Drivers were making $0.25 cpm in 1970 or $1.55 cpm in today's money.

It shouldn't take Einstein to figure this out, the pay is laughable, literally I laugh at these companies offering .30-.40 cpm it's a joke and gets worse with Lease Operators making a paltry $0.90-$1.00 cpm.

These companies are paying LESS than crumbs and want to come up with every excuse other than the slave wages as why they can't get anyone to live in these tin cans anymore.

Building huge fancy terminals, hiring tons of office staff & recruiters, buy tons of brand new fancy trucks every year. dropping $10's of millions, on this pet project over here or there and do everything under the sun EXCEPT pay a modern day wage to the drivers who are the only reason they exist in the first place. I hope these companies suffer from their own greed someday. Drivers need to strike & organize pure and simple. These companies have been abusing drivers for far too long.


Jeff
Company Driver
Unlisted
Apr, 01 2015
 
   
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