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Home » How high do U.S. driver wages need to go?
Forward Thinking

How high do U.S. driver wages need to go?

July 27, 2018
Mark Solomon
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Truckload driver wages in the United States need to hit at least US$75,000 per year if truckload carriers have any hope of attracting and keeping qualified drivers in the fold for the long haul, one of the industry's top executives said this week.

Lana R. Batts said in an e-mail that driver wages "certainly" must hit the US$75,000 threshold for seats to be filled and to stay that way. Another possible metric, that of wages equaling 60 cents per mile, is irrelevant, Batts said because drivers aren't getting the miles they need to make a solid living due to issues such as delays at shipping and receiving docks.

Batts' comments indicate that drivers must be assured of miles equating an annual wage of US$75,000 or more for the truckload sector to compete with other industries for valuable labor.

As of May 2017, the median truckload driver wage was slightly more than US$42,000 a year, according to the U.S. Bureau of Labor Statistics (BLS). The top 10 percent of earners pulled down more than US$64,000, according to BLS data. Since then, an increasing number of fleets have substantially increased driver wages. Many salaries have risen by double-digit amounts during the past year or so.

Still, wages remain below the levels that Batts believes are necessary to bring steady supply into the market. Benjamin J. Hartford, transportation analyst for Baird, an investment firm, said the average driver wage is between US$45,000 and US$50,000 a year. Batts pegged it at between US$55,000 and US$65,000 a year. The shortage of qualified drivers is most keenly felt among the larger fleets.

Batts is co-president of Tulsa-based Driver iQ, which develops background screening products and services for the trucking industry. In her 46-year career, she has served as senior vice president of regulatory affairs for the American Trucking Associations (ATA) and president of the trade group's Truckload Carriers Association.

In Driver iQ's second-quarter forecast on driver recruitment and retention trends, 45 percent of fleet recruiters surveyed expect driver turnover to increase in the third quarter over already high levels in the prior quarter. The ratio is twice as high as in the fourth quarter of 2017, according to the survey. The remaining 55 percent were split on whether turnover would increase or decrease in the current quarter, the survey found.

About 7 percent of carriers reported no unseated trucks, the report said. However, an equal percentage said more than 10 percent of their trucks were unseated. Smaller fleets reported that they had less of a problem filling their seats, according to the report.

About 60 percent of the larger carriers—those with US$100 million or more of gross annual revenue—said they would add 1 to 5 percent capacity in the third quarter, while smaller carriers said they planned to add between 6 and 10 percent of capacity. The report defines small carriers as those with less than US$30 million in annual revenues and mid-size carriers at between US$30 million and US$100 million in annual revenues.

While about two-thirds of recruiters at larger companies said their drivers were retiring at their expected times, about the same percentage of executives at smaller carriers indicated their drivers were staying longer, according to the survey. Driver iQ said the wide discrepancy may point to a broader trend of drivers preferring to work for smaller firms than their larger brethren.

Logistics
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Mark Solomon is executive editor—news at DC Velocity, a sister publication of CSCMP's Supply Chain Quarterly.

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