There’s More Than One Way up with Driver Pay [Commentary]

While it may seem like all folks inside the Beltway do is belch noisome mandates and burdensome regulations at the trucking industry, at least one federal agency is working to help the industry beat back the seemingly never-to-end driver shortage. 

The Federal Motor Carrier Safety Administration has been actively pushing solutions to alleviate the driver dilemma. Initiatives range from a younger-driver apprenticeship program to a new Women of Trucking Advisory Board committed to recruiting, retaining, and supporting female commercial motor vehicle drivers.  

Those efforts are long-term strategies that, while benefiting many current and new drivers right now, hold a bigger promise of increasing the number of CDL holders over time.  

But nothing grabs any worker’s attention more than seeing the size of their paychecks increase. That’s why FMCSA is also on top of raising driver pay, which can deliver an almost immediate positive impact for carriers. To that end, the agency has begun a study of how driver compensation can affect both driver retention and safety.  

The agency said it will “study the impacts of various driver compensation methods on overall safety and retention rates through expert briefings, data gathering, and possibly case studies or interviews with relevant industry and academic experts.” 

Data recently compiled and analyzed by research firm National Transportation Institute underscores that driver wages have been heading up. 

Despite slowing growth into the first half of 2022, driver wages in the fourth quarter of the year continued to climb from the prior quarter and year over year, according to NTI data. 

The data shows gains in base driver wages — mileage and hourly pay — across all fleet types, industry segments, driver job types, and at all experience levels. And motor carriers and private fleets continue “to pad bonuses and incentives that contribute to drivers’ overall earnings.” 

NTI summarized its Q4 findings into these three key takeaways: 

1. Sliding Scale of Growth by Experience  

While wages for drivers of all experience levels advanced again in the fourth quarter, that momentum was most pronounced for drivers with the least amount of experience. Drivers with only one year of experience clocked a gain of 5.9% vs. late 2021. Wages for drivers with three years’ experience soared nearly as high, to 5.2% And wages for drivers with “maximum experience” rose 4.8%.  

By comparison, “cap earners” — defined as trucking’s highest-paid drivers overall — saw their wages increase by 3.2% on average.

2. Bonuses Point to Recruiting Momentum  

“Compensation incentives that signal a robust hiring environment remain,” NTI said in its analysis. The prevalence of sign-on bonuses, referral bonuses, and guaranteed pay options grew again, quarter to quarter and year over year, as did the dollar amounts of all three. More than 8 in 10 fleets are offering referral bonuses and more than 7 in 10 are paying sign-on bonuses. And dollar amounts for both reached all-time highs in the fourth quarter of 2022.

3. Working Holidays Pads Paychecks

What NTI reports about holiday pay suggest it’s a missed opportunity to reward drivers for fleets not offering it.  

NTI found that flat, work-on-the-holiday rates were mostly flat this quarter from a year ago. But some drivers apparently worked more holidays than others. Dry-van drivers saw their holiday pay rise 10% year over year. But reefer drivers scored a 33% holiday-pay hike, which made for “a well-deserved paid day off after frenzied food freight demand in the weeks leading up to a holiday,” as NTI noted. 

By the way, FMCSA is no newbie on this topic. Way back in 2014, the agency launched a study on “the possible unintended consequences of the various methods by which drivers are compensated.”