Article

Commentary: It's Time to Think About Hourly Pay

November 2017, TruckingInfo.com - Editorial

by Deborah Lockridge, Editor-in-Chief - Also by this author

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Deborah Lockridge
Deborah Lockridge

When Charles “Shorty” Whittington was chairman of the American Trucking Associations a decade ago, the founder of Grammar Industries called for the industry to look at paying drivers by the hour, he recalled last month during a panel discussion at the ATA’s annual Management Conference & Exhibition. “And I was about tarred and feathered.” Trucking companies told him to do so would be “business suicide.”

But things are changing.

Seriously evaluating how we pay drivers is something trucking needs to do as the industry faces its worst shortage of drivers since ATA first started keeping numbers. The shortage is projected to hit 50,000 by the end of the year. One Northeast fleet manager I talked to said he’s 15-18% short of where he needs to be on drivers.

Grammer Industries is one of a number of fleets ­— many in the tanker and bulk business ­— who have been quietly experimenting with hourly pay. Some of Whittington’s friends in the industry who have done so, he says, have seen their driver turnover drop to 20%.

Admitting that getting customers to accept the rates they’ll need to pay in order to make that happen is just one challenge in making this transition, he said, “but I think this industry has done a terrible job in communicating with the shippers.”

With the upcoming electronic logging device mandate, however, many in the industry have agreed that this kind of communication is going to be vital. And it also could mean that moving to hourly pay would make sense, at least in some situations.

It’s understandable how the mileage rate became the standard and accepted pay structure for the industry. With drivers out on the road for days and even weeks at a time, with no way to know much of anything about what they were doing other than the miles you could be reasonably sure they were traveling from origin to destination, mileage was the one number you could use to make calculations.

But with ELDs, that’s all changed. Used properly, you’ll know how many hours they’re driving, how many hours they’re sitting at the dock waiting to load or unload, and how many hours they’re off duty.

And for drivers who are leery of electronic logs, wouldn’t that be a lot easier to swallow if it meant they were actually going to get paid for every hour they worked?

Whittington said his company enjoys low turnover and spends very little on advertising for drivers. While he said the company culture values drivers, and that’s part of it, the hourly pay is a definite draw.

Louisiana-based Dupre Logistics has been paying drivers by the hour for years, and notes that it positively affects driver safety — when drivers are paid based on mileage or a percentage, it can push them to work when tired.

Not that such a move is easy. As Whittington said, “it puts a lot of strain on dispatch when you start down that path.” During the recent hurricanes in Texas, Louisiana, and Florida, “we paid out over $200,000 to truck drivers who didn’t move during those storms,” he said. “Was that tough? It was damn tough. But we’ve got people coming to work for us because we treat them right.”

Comments

  1. 1. edward richard [ November 18, 2017 @ 12:10PM ]

    What a novel concept! Getting paid for all you do it's about time

  2. 2. Robert [ November 19, 2017 @ 09:02PM ]

    From 1978 to 1993 I worked for a wholesale lumber distributor running about an 700 mile radius from Portland, OR. We were paid hourly at all times, with 1 1/2 after 40 hours. Plus a company Visa card for our expenses and lodging. We had sleepers but were told that they were emergency use only. As far as I know there was never any abuse of the privileges among the six of us. Never any question of our time or our expenses.. Few, if any, companies like this now unless they have a bargaining agreement.where you are paid for all work preformed.

  3. 3. Richard [ November 21, 2017 @ 09:56AM ]

    That should mean ALL everything done for and around
    the companies truck.
    That means fueling, checking tires, inspections, waiting for repairs and maintainance, communicating with company employees ANY and ALL company meetings for ANY reason.
    You are working for only one reason and that should be for MONEY and Company paid benefits PERIOD.
    They are not your friends or family like the purport to be!!!

  4. 4. BarbRRB [ November 26, 2017 @ 09:58AM ]

    Been paid by the hour since 1993. When I do go on over nights, paid from my log book and hotels are paid for.

  5. 5. Brian [ November 27, 2017 @ 09:33AM ]

    We are one of those few fleets that are testing the waters with paying our drivers by the hour. Let me tell you, it has worked out great for the most part. We do have that 1 driver that is trying to milk it, and he is about to be removed from the test bed. But the others, its working great. Our Customers have seen an increase in productivity, and its more equitable for the driver. Since the driver has been more productive, its a win for both the customers, and our company. Their wages have gone up.

    Basically, it can work, if applied correctly. If you have one of those drivers that gets the picture of moving, and earning, than the hourly wage will benefit all. But if you have one of those drivers that likes to stop by all the cherry slot machines, and has to stop at all the truck stops. Than it doesnt work. I made the most money I ever have in the trucking industry when I was behind the wheel being paid by the hour, and I was low man on the totem pole. I miss that job.

  6. 6. John Mullen [ January 23, 2018 @ 05:51AM ]

    The driver shortage will end with the end of the archaic and questionable (anti trust practice) of industry wide mileage compensation.Replace with a strict and simple method of hourly compensation from the time a driver reports for duty to the end of his duty, end of his available hours under FMCSA. This also provides the benefit of ending log falsification. If some think ELD will end that, give me a shot at it. Driver compensation will be comparable to or in excess of existing pay.

 

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