Truck driver pay may finally be getting the attention it needs. Photo: Dupre Logistics

Truck driver pay may finally be getting the attention it needs. Photo: Dupre Logistics

I called Kyle Kottke, one of our Emerging Leaders from 2016, to talk about how things are going in the refrigerated business for an update for our upcoming May issue. Kottke Trucking is a third-generation interstate hauler, in operation since 1938.

“We’re nearly turning down as much work as we’re hauling,” he told me. But are they buying new equipment to handle some of that business they’re turning down? No. “Our pipeline for drivers is currently not very healthy, so we’re just replacing our equipment,” he said. In fact, they’re looking at having their first unseated truck.

This is hardly unusual, of course. We’re hearing the same story all over. Business is booming and drivers are scarce.

Many drivers, when they read articles about fleets facing a driver shortage, will tell you, it’s not a driver shortage, it’s a pay shortage. And we’ve seen a rash of pay raise announcements from fleets in the past several months like we’ve never seen before. Not only per-mile pay going up, but various bonuses, and some creative approaches to addressing driver benefits and overall compensation. (See my March editorial, Money Is Not the Only Thing That Speaks to Truck Drivers).

The latest release of ACT’s For-Hire Trucking Index showed fleet equipment purchase intentions are strong, that they have or plan to increase driver pay, and that they currently have power in contract negotiations with shippers.

The capacity crunch is allowing fleets to charge higher rates, which in turn in many cases are being used to pay drivers more.

As part of this month’s survey, ACT Research asked fleets about their drivers’ pay in the past and coming three months. “It was a near unanimous response from our fleet panel that they have or plan to increase driver pay,” said Kenny Vieth, ACT Research’s President and Senior Analyst. “Many respondents expressed concern about the industry’s practice of sign-on bonuses as a way of attracting new drivers.”

But is it possible that increased pay is having some effect?

Kottke Trucking says it's facing an unseated truck – a first, at least in a long time. Photo: Kottke Trucking

Kottke Trucking says it's facing an unseated truck – a first, at least in a long time. Photo: Kottke Trucking

American Trucking Associations this week reported that the driver turnover rate for truckload carriers fell in the final three months of 2017. But the rate remained higher than it was for the previous year, according to ATA Chief Economist Bob Costello.

“Despite this dip in turnover, the driver market remains tight and the driver shortage remains a real concern for fleets and the industry,” said Costello. “If the economic climate continues to improve, I expect both turnover and driver shortage concerns to rise in the near future.”

Why the drop? Costello pointed to a couple of likely reasons. “First, freight demand was very strong, which may have encouraged drivers to stay at their current fleet because they were making even better money with strong volumes. And second, many fleets implemented or announced pay increases last quarter, which may have disincentivized drivers from moving to new jobs.”

Meanwhile, FTR’s Jonathan Starks points out in the upcoming April issue of HDT that February 2018 was a milestone for employment in the for-hire trucking industry. The 1.47 million-plus payroll employees recorded by the Bureau of Labor Statistics was the highest level ever. It was also the most workers added in a single month since May 2015. In fact, trucking has added more jobs in each of the last three months than it had in any month since March 2017.

“It appears that wage increases, sign-on bonuses, and other recruiting tactics are paying off,” Starks says. “Moreover, an all-time high in employment levels comes a couple of months after the industry surely lost some drivers over the ELD mandate.” Of course it’s difficult to really know the true impact of ELDs, due to the delay in hard enforcement until April 1 and several temporary exemptions and waivers.

Orders for new trucks have been quite strong since last fall, with January orders nearly setting a record high for any single month. There were concerns that all of these orders couldn’t be filled by additional drivers, but the payroll increases, combined with strong increases in new authorities being issued, would seem to say otherwise.”

Author

Deborah Lockridge
Deborah Lockridge

Deborah Lockridge

Reporting on trucking since 1990, Deborah is known for her award-winning magazine editorials and in-depth features on diverse issues, from the driver shortage to maintenance to rapidly changing technology. 28 Jesse H. Neal honors.

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Reporting on trucking since 1990, Deborah is known for her award-winning magazine editorials and in-depth features on diverse issues, from the driver shortage to maintenance to rapidly changing technology. 28 Jesse H. Neal honors.

View Bio
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