What are Trucking Companies Doing to Solve the Driver Shortage?

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Last week’s TruckWorld event at the International Centre in Toronto was a great opportunity to connect with old friends and get updated on the state of the freight transportation industry. It was clear from the huge attendance at the show that is a very good year to be in trucking. The negotiating leverage has clearly swung over to the carrier side. Shippers are being told to accept rate increases or risk losing their truck capacity to other manufacturers and distributors.

One trucking company owner summed up the state of the industry this way. The industry is facing four problems: drivers, drivers, drivers, and drivers. This caused me to reflect on what various trucking companies are doing to address this issue.

Signing Bonuses

Companies are offering from $2000 to $10,000 bonuses to experienced (one year plus) drivers.

Orientation Pay

During orientation, one company pays $1,000 to first-week solo drivers and another $1,000 the second week. The company also provides drivers with meals, a rental car for their comfort and convenience (in specific locations) and a single hotel room.

Base Pay

Truck drivers are being offered $0.50 per mile and up as base pay. In one company the pay program for linehaul drivers provides a guaranteed weekly gross minimum pay determined by their pay bracket. Drivers who earn 46-50 cents per mile are guaranteed $1,000 per week; those who earn 52 and 53 cents per mile are guaranteed $1,100 per week; and drivers earning 54-56 cents per mile are guaranteed $1,200 per week. In addition to the guaranteed weekly pay, the company prorates holiday weeks.

Pay Increases

Drivers at all experience levels can receive pay raises with as little as three months’ experience (a 2¢ per mile raise) to those with two years or more (a 5¢ per mile raise).  

Lifestyle Enhancements

Some companies will allow their drivers to bring along riders and pets, offer in-cab DirecTV, and/or they guarantee they will be home 3 of every 4 weekends.

Pay for Performance

Performance Bonus Pay is available in some companies and is based on achieving certain safety, fuel economy, miles driven, and/or on-time delivery KPIs. Performance bonusus may be paid monthly or quarterly.

Benefits

A variety of benefits are being made available including low cost medical, life, dental, and disability insurance, a 401K (RRSP in Canada) with company match, direct deposit, paid weigh station bypass and tolls, profit sharing, and/or paid vacations.

Referral Bonuses

This is another source of revenue made available to drivers who can encourage their experienced friends to join the team.

Summary

The driver shortage has certainly helped boost driver compensation which has been long overdue. To keep pace, some truck fleets are considering further double-digit driver pay increases later in the year. The common feeling is that this current capacity crunch is here to stay for another 18 to 24 months. Trucking companies need to adjust to the current realities of what it takes to recruit quality drivers and serve their customers.

 

To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466).

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