newsworthy
U.S. Xpress lets loose with 13 percent
wage hike for solo drivers; will other
truckers follow suit?
IT MAY NOT HAVE BEEN THE FIRST SALVO FIRED IN
the truck driver wage wars, but it certainly packed a wallop.
Effective Aug. 25, U.S. Xpress Enterprises, a Chattanooga,
Tenn.-based truckload carrier, raised the pay of its over-the-road solo drivers by an average of 13 percent to a maximum of 46 cents per mile. The increase puts U.S. Xpress’
solo drivers in the top 10 percent of solo driver wage earners in the industry, the company said in a statement.
U.S. Xpress also eliminated its sliding pay scale for over-the-road solo drivers. It has replaced that model with a
simplified rate structure under which all drivers will earn
the same base per-mile pay regardless of the length of haul
of their trips, the carrier said. Drivers had complained that
the sliding-scale formula made it difficult to calculate their
base pay from week to week, according to the company.
The increase is the largest one-time driver wage boost
in U.S. Xpress’ 28-year history. The adjustments boost the
annual pay for solo drivers to between the high $40,000s
and the low $50,000s, depending on the level of experience, the company said in an e-mail. Truckload drivers,
on average, earn base salaries of around $50,000. Less-than-truckload (LTL) and private fleet drivers earn more.
The consensus among industry observers is that truckload
driver wages need to rise by about 20 percent to have any
meaningful impact on hiring and retention.
The changes will not apply to company drivers who
operate as two-person teams. Nor do they affect drivers
providing so-called dedicated services on behalf of specific
customers. Under such an arrangement, a trucker commits
rigs, trailers, and drivers for a customer’s exclusive use over
what is normally a three- to five-year contractual period.
In return, the customer compensates the provider for
an agreed-upon number of miles driven on a round-trip
basis. Dedicated services have become increasingly popular
because they offer capacity assurance in a world of tightening equipment and driver supply.
U.S. Xpress said it made the changes now because it
believes there will be a high level of demand for solo drivers
to support the “emerging business opportunities” it sees
headed its way. Solo drivers account for about 1,500 of U.S.
Xpress’ driver pool of approximately 8,000 people.
U.S. Xpress already pays its solo drivers an additional 3
cents per mile if they are on the road for 30 days at a time
and an additional 5 cents per mile for every 45 consecutive
days they are away.
INDUSTRYWIDE TREND?
Benjamin Hartford, a transportation analyst for the investment firm Robert W. Baird & Co., said the U.S. Xpress
increases are unusually high for the truckload industry.
Phoenix-based Knight Transportation, a truckload carrier
that hiked driver wages earlier this year, came in at about a
5- to 10-percent increase, Hartford said. The analyst said he
does not expect higher pay hikes, like the one implemented
by U.S. Xpress, to become the norm.
However, Nöel Perry, a leading transport economist,
said that if the economy gains momentum, increases of
that magnitude would be needed to attract drivers to the
field and avoid the high-double-digit turnover plaguing
the industry. Perry puts the driver shortage number well
into the six figures, much higher than the 30,000 figure that
has been quoted by the American Trucking Associations
(ATA), a motor carrier trade group.
U.S. Xpress wouldn’t comment directly on whether its
higher costs would be passed on to shippers in the form of
higher freight rates. “Raising freight costs is an industrywide concern, but our customers understand the situation
we are in as an industry and the importance of having
enough trucks to haul their freight on time and without
incident,” the company said in the e-mail.
Fatter compensation is the latest effort by carriers to
attract and retain qualified drivers in an increasingly tight
labor market. According to one industry executive, some
drivers are receiving signing bonuses as high as $15,000—
nearly three times what had been considered the standard
amount for signing bonuses. In addition, driv- p. 16 P H O
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