Detention raises significant issues
Typically, firms compensate truck drivers by the mile, but that model raises significant issues including detention. Drivers are not typically compensated for the time they spend waiting for their trucks to be loaded or unloaded. That time, referred to as detention, can be significant. Drivers often report detention times of between 3 and 5 hours. For the driver, that’s time he can’t move, and therefore can’t earn.
Real wages have fallen for 30 years
In addition, the compensation model has changed significantly over the past three decades. When adjusted for inflation, truck driver pay in 2016 is about one-third of what it was in 1985. The decline in inflation-adjusted truck driver salaries comes largely as the result of deregulation and de-unionization in the workforce. To make matters worse, real wages for truck drivers fell nearly 25% after 2005. From a monetary perspective, choosing to drive a truck is less rewarding than ever.
Truck driver pay not comparable among fleets
Truck drivers who work for private fleets are paid significantly more than their independent counterparts. Employment status is also a thorny issue. Some trucking firms routinely classify drivers as independent contractors even when they meet the IRS definition of employees. As the result of unfavorable court judgments, transportation firms have paid millions of dollars in back wages and benefits to their drivers.
Hiring needs to combat attrition, growth
More experienced drivers are retiring, leaving a gap of about 50,000 unfilled jobs. Trucking firms estimate that they will need to hire about 90,000 drivers annually just to keep pace with attrition. That leaves trucking firms in the lurch when it comes to recruiting new drivers.
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Pay variations lead to shortages
These variations in truck driver pay increase the discrepancy between private-fleet drivers and for-hire drivers, and ultimately lead to more unfilled positions in the industry. Turnover among drivers in for-hire fleets approaches 100%. In comparison, turnover among drivers in private fleets is about 15%. All firms base their hiring on driver safety to some extent, but drivers with poor safety records tend to gravitate to for-hire firms. That increases the challenge for for-hire fleets to find qualified drivers for their open positions.
Specialized truck driver pay packages
The issue of truck driver pay comes clearly into focus in the personnel office. To attract younger workers, the industry has instituted regionalized pay and benefits packages. Specialized drivers may receive additional compensation and incentives. Drivers who achieve safety targets may also receive cash bonuses. Some firms now offer guaranteed truck driver pay packages.
Could per-mile give way to per-hour?
Chronic staffing issues have led to some discussions about revamping the pay model from a per-mile basis to a per-hour one. Proponents argue that per-hour pay would compensate drivers for detention, traffic congestion and weather delays. Others argue that a repeal of the Fair Labor Standards Act exemption for interstate transportation workers is in order. That would make truck drivers eligible for overtime pay.
Survival may dictate new truck driver pay model
While nothing may come of the debate from a legislative perspective, circumstances may rework the truck driver pay model. What seems most likely is a hybrid model that combines base pay and incentives. An alternative may be an hourly pay combined with some type of mileage-based rate. Transportation firms may adopt a new truck driver pay model simply as a retention strategy.
Overall strategy needs to address turnover, recruitment
Industry analysts note that a long-term strategy for truck driver compensation is in order. Higher pay may stem the issue of turnover, but it doesn’t adequately address the issue of recruiting new drivers into the workforce. Additional benefits, shorter hours, more predictable schedules and a national strategy to reduce urban traffic congestion may make truck driving more attractive to a new generation of drivers.
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