Truck News

News

The hour has arrived — or has it?

It’s a rare thing for employees to say they would be willing to accept less money, but a Kriska Transportation driver recently offered that very thing. The driver was happy enough with his annual take, amounting to about $60,000 a year,...



It’s a rare thing for employees to say they would be willing to accept less money, but a Kriska Transportation driver recently offered that very thing. The driver was happy enough with his annual take, amounting to about $60,000 a year, but fluctuating weekly payments were driving his wife to distraction. Even if an equalized compensation plan came with some sort of financial penalty, the driver told a fleet manager that he would be willing to accept the cost.

Peaks and valleys in pay cycles are commonplace throughout the trucking industry, particularly in jobs behind the wheel. And, productivity-based payments—whether by the mile, per load, or as a percentage of revenue—offer an added incentive to use time wisely. (Don’t delay when securing a load or sitting at a truck stop. If you want to make money, you need to move freight.) But the approach also exposes drivers to the burden of everything from traffic congestion to seasonal shipping demands which are beyond their control.

Increasingly, the burdens are becoming commonplace, rather than the rare exceptions they used to be.

“The list of non-driving activities is just getting longer and more time-consuming,” said Kriska Group CEO Mark Seymour, who is also chair of the Canadian Trucking Alliance’s Blue Ribbon Task Force on the Driver Shortage.

“We pay for a lot of things other than just driving a truck and driving a mile, but who’s to say how long they take?”

An extra $7.50 for crossing the border may be enough if the crossing takes less than 30 minutes, but it amounts to pocket change after a three-hour delay; a fixed fee-per-distance seems fine at highway speeds, but downright depressing in the middle of a traffic jam; a payment for refueling faces a similar problem if there is a long lineup at the pumps. Aside from these examples, a long list of supplemental payments can leave inexperienced drivers wondering exactly what they can expect to make.

“For the time they put in, compensation packages for most truck drivers, but especially long-haul drivers, are no longer competitive with other industries,” the Blue Ribbon Task Force concluded after it explored the role that compensation models play in attracting future drivers. “On average truck drivers make [or slightly exceed] the average annual wage for all workers. However, they tend to work significantly more hours to make that wage. In addition, truck drivers are not always compensated for all of their time on the job.”

Hourly pay

Debates about potential solutions often turn to some form of hourly pay, but the answer is not straightforward.

“An hourly pay system is not a panacea for solving the driver shortage across the industry. Unlike some industries where there is more flexibility to work longer hours during periods of peak demand, truck driver hours are capped by the hours of service regulations,” the task force report observed. “The reality is that drivers do inevitably arrive at some sort of per-hour calculation of what they are paid. Carriers must be competitive with each other. The key is not necessarily how drivers are paid, but how much they are paid.”

Some fleets already pay hourly wages for work in short-haul applications or when the tasks are limited exclusively to driving. J. F. Kitching & Son Ltd., an aggregate hauler in Queensville, Ont., has been paying drivers this way for decades and has no plans to change, even though many competitors pay per load or on a percentage. The latter models create a highly competitive environment, argues Lynn Paxton, who oversees safety and compliance.

“It’s never a good environment where people become territorial and concerned about their ability to secure loads versus their co-worker. It doesn’t support our business model in terms of promoting a safety culture and a team setting.”

A predictable pay structure even helps to retain drivers, she added. “I want to have a stable workforce here, and I want to know that people are going to come to work and be able to work a reasonable day that’s compliant with the legislation, go home at the end of the day, have a good quality of life, and not be concerned with how many loads they’re going to get tomorrow.”

“If we can pay the same or less [than Kriska’s long-haul competitors] and bring some calm and peace to our existing workforce, then why wouldn’t we do that?” Seymour asked. “It’s probably the easiest change we could all make.”

But an hourly pay structure for long-haul drivers would introduce a different challenge. Unlike their P&D counterparts, who are able to watch drivers coming and going each day, how do long-haul companies best monitor productivity in faraway locales?

Put another way, said Seymour, “How do we make sure we’re getting an hour’s work?”

It’s one of the reasons why he thinks line-haul drivers should rally behind calls for mandated electronic on-board recorders (EOBR). Some truckers have balked at the idea, much like an earlier generation of workers who compared logbooks or satellite tracking to the prying eyes of Big Brother. Seymour said the latest tool could give fleets the confidence to support different pay structures.

“Basically, you log onto your EOBR, you’ve effectively made yourself available to work. Now it’s up to us to make sure you’ve got something to do and you’re productive while doing it.”There is no reason for fleets to think drivers will laze about without the incentive of productivity-based pay, said Rob McDonald, president of Apps Transport Group, which delivers LTL shipments along the Windsor-Quebec City corridor, among other services.

“Treated well and given enough work, the guys will work as hard as they can.”

They shouldn’t be expected to shoulder the burden of being tied up at a shipper, or delayed because of poor routing instructions from a dispatcher, he added.

While his fleet pays drivers by the hour, it has ways to reward the most productive workers. Performance is track-ed by monitoring key performance indicators (KPIs) such as pounds-per-man-hour, drops-per-man-hour, and other driver-influenced costs such as tire wear, fuel economy and idle time.

“Our objective is not to have them run like a bat out of hell. It’s to have them productive but safe. I don’t want them feeling if they get into a traffic jam it’s costing them money, so we think the base hourly [pay] is kind of the starting point, and if you’re more productive you get rewarded on top of that,” McDonald said.

One worry about paying long-haul drivers by the hour is that such a wholesale change could introduce unexpected costs, leaving an opening for competitors who are more than happy to undercut steeper rates and take the freight. “I don’t think any of us can afford to pump more cost into our system without completely understanding what that cost may be,” Seymour said.

Paxton admits that even some of the aggregate fleets which pay by the load could have a pricing advantage if drivers are encouraged to squeeze in an extra trip per day. Rushed drivers who are paid by the load are simply more likely to make mistakes, she said. Hourly pay builds a “safety culture” which offers dividends in the form of lower insurance rates and better Commercial Vehicle Operator’s Registration records.

Maybe a change in the payments to long-haul drivers is inevitable, but who would take the first step?

“If somebody decides to be first, that leads the charge, then God love them for that,” Seymour said. “I don’t know if it’s going to be me, [but] I’d love it to be me because I’d love to be a hero.”


Sidebar: Hourly wages in the shop

The discussion a
bout hourly pay is not limited to the driver’s seat. During a session at this year’s annual meeting of the American Trucking Associations’ Technology and Maintenance Council, shops also debated the choice between paying technicians an hourly or flat rate. Scott Witt, vice-president and general manager of Virginia Truck Center, pays hourly with bonuses, offering other rewards for jobs completed quicker than expected. “If it’s 10 hours to do a clutch and they do it in eight, they are going to get paid (extra),” he said.

Bryan Leskowsky, director of service with Peach State Freightliner, prefers a flat rate. “I call it capitalism at its finest. Technicians are motivated to perform,” he said. Six months after the shop shifted from an hourly pay to a flat rate, one-third of technicians had left, but it still billed $200,000 per month with the remaining 10 technicians, all of whom made more than they had under the previous model. The model just requires a combination of the right tools and quick access to required parts—not to mention the chance to juggle multiple jobs and keep busy when parts are on order.


Truck News

Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
All posts by

Print this page

Related Posts



14 Comments » for The hour has arrived — or has it?
  1. Guy Broderick says:

    I have had the opportunity to work for both systems and I must say I cannot understand why drivers are paid by the mile. Everything we do has a time factor involved. Dropping a trailer, pre tripping another, paperwork to follow. Everything takes time. And no trailer switch is perfect. Time is always a factor. Just like traffic. Paying drivers by the hour in my opinion is the better way and as to tracking hours for long haul drivers. EOBR is the easiest and best way to track.

  2. Murray says:

    Every month we read about driver compensation. Every month it just gets another disguise. WHY DO PEOPLE EVEN BOTHER TO DRIVE A TRUCK? Lets face it RATES are not going up. Lets face it DRIVERS will continue to do more work for less pay.

  3. Al Goodhall says:

    All this worry about tracking the productivity of drivers before implementing a pay by the hour system for drivers is frankly, ridiculous.

    The industry already possesses all the data it needs. Fleets know the average speed per mile a truck moves in real time for each of the different lanes they operate in. You can’t tell me that fleet executives and managers don’t know how long it takes to drive between any two fixed points in North America for a single or for a team. You also can’t tell me that fleet executives and managers don’t have the know how to factor in potential delays, they happen. Productivity is built into the system. You hire a driver with the expectation they can meet a set of minimum delivery time standards between points. The EOBR becomes nothing more than a time clock. It measures the standard agreed upon at time of hire.

    The elephant in the room is always the hourly rate of compensation. Nobody wants to talk about it. Why? Because it would bring transparency to the issue of driver pay and compensation.

    If a line haul driver is working 2500 hours per year (driving and on duty) for $60,000 that’s a rate of $24 per hour based on an average work week of 50 hours per week and a 50 week year (2 weeks off for vacation) so that’s 2500 hours per year. Many line haul drivers presently work well in excess of 2500 hours per year. An average 60 hour work week is 3000 hours per year. Now for that same $60,000 per year income we are looking at $20 per hour. We have not even approached the 70 hour per week cap fleet executives often bandy about when they are discussing maximizing productivity.

    Okay drivers, now think about the risk you put yourself at, the demands this job takes on your health and family time, the skills you employ everyday navigating a piece of heavy equipment safely on today’s public roadways and the expectations, limits, responsibility, and liabilities that are placed on your shoulders by legislators and fleet executives.

    In a world of pay per hour compensation a line haul driver shouldn’t be accepting anything less than $30 per hour. That’s a starting point for fair compensation that executives within todays trucking industry probably don’t even want to think about, let alone talk about.

  4. Mark Perkin says:

    “In a world of pay per hour compensation a line haul driver shouldn’t be accepting anything less than $30 per hour. That’s a starting point for fair compensation that executives within todays trucking industry probably don’t even want to think about, let alone talk about.”

    Well said Al. My sentiments exactly.

    The folks in the trucking industry claim there’s a driver shortage… Personally I don’t believe it because driver wages aren’t going up which is what would happen in a free market environment with supply and demand…
    But that said…

    Drivers are going to go where the money is…

    And the oil patch is paying a hell of a lot more than the cheapskates that are still stuck talking about their ‘driver shortage’

    Talk is cheap… and that’s all those folks seem to want to do about it…

  5. Richard Corbeil says:

    As far that I’m concern, we should all be paid by the hour, from the first minute to the very last!

    Why shall we work for free?

    If carriers can’t pay Drivers $30.00Hre + overtime, then they have 2 choice; raise the rate accordingly or shut down!

    No pity!

  6. Simon says:

    I have been a p&d driver for 20 years, and the reason I haven’t gone on the highway is that I have always made the same or more than my friends on the highway, and I am home every night with my wife an kids.

    The industry complains about shortages and retention, but does very little to try and fix the problem. As soon as people suggest giving driving the same status and income as a red seal trade the companies and government make all sorts of noise about it not being viable. Unfortunately they are right in some sense, there is always another company out there willing to do it for less.

    Every time a company low balls a contract they hurt us all, the good companies and the drivers. Maybe someday someone will figure it out, until then I guess I will continue to buy my lotto tickets.

  7. Michel Patry says:

    Mr Al Goodall did hit the nail on the head.

    trucking companies dont want to pay by the hour because the way they pay now, they can make drivers work for nothing and lower theyr rates.

    It’s about time that people realize that a lot of drivers left the industry because of that.

    How many experienced drivers are doing something else out there?

    Companies can come up all they want with surveys telling everybody that money is not why drivers are leaving the industry.
    Put money on the table and watch them come back.

  8. Martin says:

    Personally, I would like an executive or owner of a company, to inform everyone how much the it would cost a shipper to raise the fee of a FTL to allow a driver to make $30 an hour rather than by the mile. I do know it would be almost impossible to give an exact amount however, try to give a couple of runs to the USA and back.
    Instead the company would rather take that little extra and pay their executives a bonus for helping the company raise their yearly income, the driver is always the last to receive a pay raise. You are correct “Supply and Demand” speaks volume. Seems to me the demand is high and the supply???

  9. justin says:

    When are truck drivers gonna stand up and say enough is enough? If ppl don’t stand up for change, the pay in trucking will be the same 10 years from now…The only way to bring home decent pay check is work a lot of hours,not fair…. it does bug me that overtime in trucking is paid after 60 hour a week for a city driver. Thats a question I wanna ask why only is trucking like that? In a few short years minium wage will be close to that of a truck driver. If you are in your early 20 and thinking of getting into trucking….don’t. Learn another trade , go to school. What to expect, long work days, hitting the road away from family, working for free or cheap loading unloading, waiting time, traffic, diet, inspection stations officers, dispatch…..cost of applying for jobs, abstracts, criminal record , fast card, medicals.

  10. Rick says:

    30 plus years ago (early 1980’s) a union linehaul driver made approx $18 / hr, a team split .41 / mile, hotels were paid, any driving speed averaging less than 45 miles pr hour was paid hourly (ie sitting in slow traffic), and several had a per diem as well. I have pay stubs and T4’s from the early 1980’s showing annual income of $69,000 as a company driver. Several companies paid .94 / mile for a O/O tractor, and the company PAID the co-driver. In essence the O/O was paid for every single mile that truck made, and the co-driver was a company man. Even as a rookie back in the mid 80’s earned .35 / mile or .18 / mile as a team driver with full benefits & pension plan.

    So here we are in 2014 and driver’s are lucky to make .45 – .48 / mile. If they get any hourly pay at all they’re lucky if its above $20. No benefits or pension.

    Let me tell you, if a truck driver today could earn $28 / hr for 40 hrs, and $42 / hr (time & a half) for the next 20 hrs…you’d have stacks of qualified, clean cut, decent & safe driver applicatons to choose from. That’s approx $1960 / wk for a 60 hr week. Throw in an employer matched group RSP and medical benefits and in most areas of Canada you’d have several employees for life.

    There is no driver shortage. There’s a decent drivng job shortage.

  11. stephen webster says:

    Many people including myself have parked the trucks and got other jobs because the wages and rates in this industry dropped in the fall of 2008 and have not went up enough to make worth while to run .Other jobs pay more than driving truck today Stephen Webster Blyth Ont

  12. Kevin B. says:

    There is no driver shortage. There’s a decent drivng job shortage.

    Exactly why I left the business. After 16 years of driving and the last 12 as an O/O, I had enough. There is no other business/job that you have to give up your time for free. Many times I would call back to the dispatcher to complain sitting at a someone’s dock -for free, just to be told to be patient. Would the dispatcher sit in his office after hours for free? Don’t think so.
    I sometimes miss it but then I talk to some drivers and glad I changed.

  13. Kevin B. says:

    There is no driver shortage. There’s a decent drivng job shortage.

    Exactly why I left the business. After 16 years of driving and the last 12 as an O/O, I had enough. There is no other business/job that you have to give up your time for free. Many times I would call back to the dispatcher to complain sitting at a someone’s dock -for free, just to be told to be patient. Would the dispatcher sit in his office after hours for free? Don’t think so.
    I sometimes miss it but then I talk to some drivers and glad I changed.

  14. steve says:

    The CTA . need to sit down with truck drivers and set what their members and Transforce should be paying truck drivers. Any CTA. member not pay local truck drivers with one or more years ex. $20.00 per hour plus over time and OTR truck drivers $23.00 per hour with 2 years ex. in Canada or the US. should be banned from the CTA for 2 years

Have your say:

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>