The waiver represents an unconventional approach to keeping drivers in
what could become an unprecedented
period of driver demand. While the
nation struggles through a painfully
prolonged period of high unemployment, driver jobs go begging.
Consultancy FTR Associates estimates
the industry is short about 188,000
drivers. National Transportation
Institute (NTI), a firm that tracks driver
employment and compensation trends,
pegs the shortfall at about 30,000.
THE REVOLVING DOOR
Beyond the shortage, however, lies a
more pernicious problem: driver
turnover, known in industry parlance
as “churn.” A report by the American
Trucking Associations (ATA) estimated
that, based on first-quarter numbers,
75 percent of drivers for large truckload
fleets will turn over in 2011, the fastest
clip since the second quarter of 2008.
Turnover at smaller truckload fleets is
projected at 50 percent, the highest
annualized level reported since 2008’s
third quarter, according to the report.
Some of the turnover is due to attrition from death, retirement, and drivers’ leaving the business. But Bob
For carriers, churn is a serious headache. Replacing a qualified over-the-road driver takes time and money. An unexpected departure also wreaks havoc on a carrier’s network.
churn threaten to disrupt their supply chains, but it forces
them to pay higher rates to compensate truckers for rising
labor costs. Lana R. Batts, a long-time top trucking executive and now a partner in Transport Capital Partners LLC
(TCP), a transport mergers and acquisitions advisory firm,
said virtually all of the revenues obtained from rate increases will be sunk into paying escalating driver wages.
Estimates vary on the likely impact of wage increases on
the nation’s fleets. Leo Suggs, CEO of the former Overnite
Transportation Co. and now chairman of Dallas-based contract carrier and third-party logistics service provider
Greatwide Logistics Services, told an industry conference
recently that wage hikes could drive up truckload rates by 5
to 15 percent over the next year. However, Schmidt of Con-way Truckload predicted only a 2- to 3-percent increase
during that time due to general economic softness and
labor slack in other industries like construction that compete for the same workers.
Schmidt added, however, that should the economy pick
up appreciably, “there will be a driver shortage the likes of
which we’ve never seen before.” Right now, he said, “I’ve
seen worse.”
WAGE GAP PERSISTS
Carriers seeking to keep their drivers don’t have much in
the way of options. They can pay their drivers more,
redesign their networks to provide drivers with predictable
schedules and a better work-life balance, or a combination
of the two.
At the moment, wages appear to be trending upward.
Rates for owner-operators have climbed to $1 per mile from
92 cents a little more than a year ago, according to Gordon
Klemp, president of NTI. Driver wages at for-hire carriers
are also rising, though not at the same pace, he said.
Another factor in drivers’ favor is that carriers are asking
their drivers for more miles, which pads the paychecks of
drivers paid on a per-mile basis, said Klemp.
But the industry has a ways to go to achieve the kind of
wage levels that attract drivers or keep them from jumping
to rivals. According to FTR estimates, the median annual
salary for a truckload driver is about $48,000, though pay
will range from $35,000 to $75,000 depending on the trucker’s financial condition and the driver’s qualifications. For
drivers at less-than-truckload (LTL) and private fleets, the
average is about $58,000, said Noel Perry, a senior analyst at
FTR. Klemp pegs the median annual salary for a dry-van
