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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What Do You Say?
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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)
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