More than three-quarters of carriers in a recent survey plan to raise pay this year, nearly half by 2% to 5%, while another fourth plan to raise pay by less than 2%, according to Transport Capital Partners' Third Quarter 2012 Business Expectations Survey.
"The pressure on driver wages is evident in the survey and our visits with carriers," says Richard Mikes, TCP partner and survey leader, pointing to turnover figures reported by the American Trucking Associations. The annualized turnover rate for linehaul truckload fleets of all sizes surged in the second quarter, with turnover at large fleets breaking the 100% barrier for the first time in more than four years.
One of the reasons why carriers may be expecting to raise driver pay is due to the reported number of unseated trucks. While this varies by carrier size, overall 75% of carriers report unseated trucks in the survey. Due to the high number of unseated trucks, drivers are a controlling input in equipment plans.
"Without better pay and affordable health care for drivers, carriers will not be able to increase capacity for shippers," emphasizes Steven Dutro, TCP partner.
The health care debate is affecting carriers' plans for the future, but not as significantly as reported in November of 2011. Last year, 50% of surveyed carriers reported that recent changes in health care had adversely impacted their company, compared to only one-third of carriers this quarter.
Larger carriers (over $25 million in revenue) plan to have employees contribute more, while smaller carriers plan to reduce overall coverage. Other popular strategies include having employees pay for family coverage and implementing wellness programs.
"Many carriers are waiting on results of the Presidential election before considering health plan options and costs going forward," Mikes says. "Like decisions related to income and estate tax planning, the pause button has been hit, given the two different potential pathways ahead."
9/17/2012 Truckload Turnover Surges in Second Quarter
10/11/2012 Back to the Future: The Current and Coming Driver Shortage