An aging and shrinking labor pool coupled with rising demand for capacity is going to force fleets to push up pay, bonuses, and other benefits in order to recruit and retain enough drivers.
Though trucking may be experiencing “the toughest-ever recruiting time for drivers” right now, the worst may be yet to come, according to trends being tracked by the National Transportation Institute (NTI).
In a conference call hosted by Stifel Capital Markets, Gordon Klemp, NTI’s founder, president, and CEO, and Leah Shaver, the company’s COO, highlighted a variety of demographic and wage-related trends that will significantly crimp the supply of truck drivers just as the freight industry is poised to experience a significant pickup in freight demand and rates.
That combination of factors may result in steep driver pay and benefit increases the likes of which the industry hasn’t experienced in over a decade, they argued.
“The [truck driver] job and pay package has been completely re-engineered over last decade,” noted Shaver. “It is now rare to see pay packages without ‘regionalization’ now [because] there are simply not enough drivers to sustain the long-haul model.”
She said that pay increases for truck drivers across the country are averaging one to two cents-per-mile, but there are “outliers” where pay moving up to the tune of four to seven cents-per-mile.
“Changes in pay are weighted to region and experience now; no longer one or the other,” Shaver noted.
She added that for-hire fleets are favoring “referral bonuses” more frequently now, where drivers get $3,000 or more for referring in a new candidate and extra mileage pay for three to 12 months as well.
“Carriers are realizing that these [referred] drivers can be their best recruits,” Shaver noted.
Yet she stressed that sign-on bonuses not only remain popular but are getting heftier, too, with $10,000 the “new lure.”
“We’ve seen the re-emergence of $10,000 sign-on bonuses with 40% paid out in first four months,” Shaver said, noting that “established” drivers team can command a $20,000 sign-on bonus, based on location, paid out over 12 months.
Though private fleets are in a better position in terms of pay and home time, they are finding recruiting to be getting harder as well, NTI’s Klemp explained.
“Private fleets have it a little different – they recruit from a more experienced driver pool [and] from for-hire carriers. That’s been a cake walk in the past for them,” he said. “But now they are running advertisements consistently, announcing first-year wages of around $50,000 – sometimes $70,000. That means they are having a difficult time finding the drivers they want; the pool is diminishing.”
In a separate report, Jason Seidl, an analyst with Cowen & Co. noted that salaries and benefits are typically the largest operating expense for trucking companies – usually comprising about 30% of revenue and slightly more than 30% of total operating expenses.
To read the full story, visit http://www.fleetowner.com/driver-management/nti-truck-driver-pay-poised-spike.