Hourly pay: Is there any way?
I’m going to wade into meslippery’s favourite subject for a moment; paying drivers by the hour. Just how realistic is this? I was surprised to see Lou Smyrlis tweet the following during a speech by Kriska Transport’s Mark Seymour at the recent TransCore User Conference: ‘Paying by the mile is going to have to change: Seymour.’
That’s a pretty bold statement from a fleet executive, especially one as esteemed as Seymour, who currently also serves as chair of the Ontario Trucking Association. I wonder if that remark will bring some heat from his co-horts at OTA?
At any rate, it needed to be said. Driver pay isn’t sufficient and it’s encouraging that the industry’s top executives acknowledge that. Seymour isn’t the first to do so. At last year’s OTA convention, a panel of trucking executives was equally candid about the subject. Moderator David Bradley posed the question: “Drivers have been paid on a productivity basis for most of the industry’s history. Now with GPS and possibly EOBRs, you really can get a handle in terms of the driver’s performance. Is it time to pay drivers by the hour?”
To which Vaughn Sturgeon of Warren Transport (now Atlantica Diversified Transportation Systems) said: “If you think the driving force is going to continue on without demanding changes, you are fooling yourselves. Canada is approaching 70% of its population in the current workforce. We have a demographic tsunami heading our way. We are going to need to attract new people who are not used to our pay practices. They are just not going to put up with it.”
And then Bruno Muller of Caron Transportation added: “The whole discussion in this industry is how much more can we squeeze out of the driver? We are in for a crash down the road. If you are totally honest and account for what the driver gets paid for the total amount of hours he puts in, the guy is basically working for minimum wage most of the time. I don’t think there is any way to soften this. I believe drivers are underpaid not 5% or 10%, I think drastic numbers. And that carries through to the owner/operators. When the economy picks up, we haven’t got a chance of competing with other industries. And there will never come a day when we have a computer driving a truck. Take it to heart; we have a problem: Our people don’t get paid enough and it’s going to hurt us big time down the road.”
Those are some profound admissions from industry leaders. When speaking with our recently crowned Owner/Operator of the Year, Howard Brouwer, he said driver pay is the number one issue facing the industry. And while he tracks his costs meticulously and runs a smart operation, he would welcome the switch to hourly pay.
“It would take a lot of stress off you,” Brouwer said of hourly pay. “The biggest thing right now, with the hours-of-service, is the stress of running the miles in that 14-hour day, especially when you get sitting at a customer’s. The stress level goes sky high. If I sit, I get bored. When I get bored, I get tired. So now you have a bored, tired truck driver on the road. With hourly pay, you can be relaxed and do the job properly because you’re not worried about making up that time.”
This is no secret, but Brouwer says the onus is on carriers to make shippers accountable for detention time. Only then, is hourly pay feasible.
“The trucking industry has to look more at detention time at customers,” he said. “They don’t want to say to customers that ‘You have to pay for our equipment sitting in your driveway,’ but they have to. Customers demand 98% on-time delivery but then you sit in their yard for six hours waiting to get loaded.”
We seem to be at a tipping point. Drivers, for the most part, would welcome the switch to hourly pay. Forward-thinking fleet executives agree change is necessary. But as long as there are fly-by-night operators running with a blatant disregard for the regulations, as is the case today, it will never happen. Fortunately, technology is now allowing for the more effective and efficient enforcement of the rules. Carriers that don’t adhere to the regulations will soon be exposed and squeezed out. CSA 2010, EOBRs, satellite tracking – these are the great enablers for enforcement agencies that should spell the end for non-compliant carriers. Then, and only then, will it be possible to make some progress when it comes to how – and how much – drivers are paid.
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Hi James, great post! It is long overdue that the management at some of these companies are finally realizing that something has to change in the way that drivers and O/O’s get paid! Many good drivers have given up on this industry and gone to do something where the pay is appropriate. This is especially true the last decade or so and not only does this create a “driver shortage” ( I personally don’t think there is a driver shortage, but instead, a shortage of pay for drivers), but the other problem that most big companies seem to overlook is the fact that when the good drivers leave, there isn’t enough of them left to ‘mentor’ the up and coming new drivers and be there to help teach and answer questions and such. The new drivers don’t have many ‘old hands’ to look up to and learn from anymore! The big companies think that with enough classroom time and a couple trips across town to drop a trailer or two, their new drivers are ready for anything the job can throw them, but NO amount of “training” of that sort will ever replace the experience that walks out the door every time an ‘old hand’ quits and goes to run a backhoe or something where they will be paid for ALL their time at work. It would be so simple to pay drivers and O/O’s by the hour, either from the log book or the EOBR or whatever you have and it would solve a bunch of the industry’s pet peeves. You wouldn’t catch drivers leaving out ‘on-duty’ time from their logs, drivers likely wouldn’t grumble about having to wait and wait and wait for forklifts, cranes, customs brokers, etc. and they wouldn’t even argue with dispatch/safety/management about all the policy and procedure that some of these companies have dreamed up over the years! You want the driver to make sure they are doing a thorough pre-trip and post-trip and wash the windows and fuel up at your fuel stop opposed to fueling where they prefer not having to wait for 3 gallon per minute fuel pumps, no problem! If they were paid accordingly, who would complain? However, the carriers will have to do their homework when quoting freight rates to ensure the revenue will afford the hourly wages! I think that more carriers need to charge by the hour for the trucks also, and if the customer refuses to pay that way, leave their freight where it sits! If some carrier wants to still haul it cheap, then they will soon not be able to afford the good drivers and soon their customer service will suffer and eventually the rates will have to go up. On another note, James, it is not only the ‘fly by nighters’ who cause the problems! Some very big ‘well respected’ carriers are very guilty of disregarding the rules when it suits them and are quite often the lowest freight rates out here!
I drove 17 months for Big Horn Transport and they paid by the hour using your logbook and the disc off the tachograph. We were also governed to 95 kmh. Their hourly pay may not have been the highest but you knew when you were sitting and waiting you were still earning. I also drove 11 months for another outfit for commission. That was a bad scene because the commission could be dropped and you wouldn’t know until payday what happened.
I feel that if the companies paid by the hour and in turn charged waiting time by the hour then shippers would soon become better schedulers or they would have a dock full of product and no one to move it. Come on companies, if you all change your ways then things will be better for all.
Mr. Seymour makes a bold statement, but then what? If he feels so strongly about driver’s pay then why is he not at the forefront of change? It is one thing to say the status quo needs to change but where is the implementation at Kriska? I believe he quoted that his drivers make about $54000/yr. So, why doesn’t he boost them up to $60000 or $80000 or whatever he feels is appropriate? Rates are low and will continue to be low for quite awhile. Consumerism is low in N. America, demographically we are aging and older people don’t buy as much. Drivers earn what the market will bear. When there truly is a “driver shortage” this will play out, but until then things will stay the same for some time.
James, I agree with Stephen large and Ray Pratt. I do however, take exception to Kevin’s comment that “Drivers earn what the market will bear”. Carriers are tripping over one another to compete for freight, and the biggest loser is the driver. Part of the problem is the drivers willingness to work cheap and donate their time at loading docks, fuel islands and simply waiting for dispatch.
According to the hours of service regs, all of this time is to be logged on line 4, on duty not driving. This time may not be productive so far as the carrier is concerned, but it is time the driver loses out on from a revenue generation standpoint and should be compensated for.
Maybe we should be looking at the log book itself and revamp the grid, doing away with lines 2 and 3. Line 1 would be off duty, with absolutely no job related activities, and line 4 being on duty, covering ALL driving and job related activities. There should should also be some compensation for drivers forced to reset away from home.
We hear fleets boast about driver pay and how they put drivers first. They don’t talk about the time spent away from home to make the so called “big dollars”.
Hourly pay is long overdue, paying drivers for all time spent. I wonder how many office personnel, or anyone else in the workforce, would donate their time?
To me it is as simple as this.
James would you like a job putting fence posts around my land.
I will pay you $20.00 per post if you deem that fair be here at 8.00am.
Good morning James I dont know where the posts are they where to be
here at 8.00am. They show up at 1.00pm so for 5 hrs you make nothing.
Or James would you like a job putting fence posts around my land.
I will pay you $20.00 per hr be here at 8.00am. The post show up at
1.00pm you have made $100.00 not your fault you were there on time.
I have been driving truck for over thirty years and this subject has always been at the top of the list.These guys talk a good game, but as long as there is people out there willing to work for lower wages it will never happen.You can have as many rules and regulation you want someone will always promise to get the load there first.
drivers were the reason companies went to mileage as they would be ‘Dogging It’ all day. either spending more time then needed at a coffee shop or sight seeing but taking 8 hours to do what another guy could do in 5 hours was just a waste. i do however believe in a combination of mileage and hourly so a driver does not lose out. things like fueling and loading/unloading time should have a hourly figure.
meslippery call me when the posts arrive and maybe you should have had them delivered by someone getting pay my the mile.
Today might not look like the right time to pay a driver by the hour but down the road, it’s a real possibility!
There’s too many regulations and committments on the driver’s shoulders to bear for the reward currently being offered!
Paying a driver by the hour will be a win/win situation for all! Happier, Healthier and Safer Driver!!!
Excellent quote James. I read and re-read that exact quote several times this last week (Seymour). It’s a very enticing topic. Good points one and all. Blogs were designed for just these kinds of topics. Here is my two cents worth (and change can be returned :)).
Canada is a socialist country, definitely not as socialistic as Europe but it still leans considerably to the left. The ONLY way to have most/all drivers get paid by the hour is through government intervention. Europe achieved universal hourly pay primarily through political and union WILLPOWER (supported by a more socialist population). Canada (as a society) is not nearly as committed to government control (at least not presently). We would have to abandon deregulation rather than support deregulating policies. Most of the freight would need to be RE-governed (as opposed to advance within the free market system). Even if Canada would move towards it, the US (even WITH Obama) will never submit to it. Canada MUST compete with the US carriers using THEIR system. If we try to compete using a less cost effective method we would be decimated, almost instantly! Margins are far too narrow to survive the change (though some market niche’s can, and actually are… I am commenting only on “general” freight).
In the end I believe the compensation system must be changed but it must be based on valued productivity not on time alone. Each component (hours, speed, equipment, expertise, boarder, paperwork, safety, routing etc.) must be measured and factored into the costing/quoting/billing system. Today components are not all properly measured and factored, therefore the complaining drivers.
My personal opinion is that a blanket hourly pay structure will produce more problems than it would be designed to fix. However, the topic needs to be addressed because it brings up all the components of a drivers job. Rock on James!
My personal opinion is that a blanket hourly pay structure will produce more problems than it would be designed to fix. However, the topic needs to be addressed because it brings up all the components of a drivers job. Rock on James!
Posted by: Robert D. Scheper | August 3, 2010 07:44 PM
My personal opinion is that Speed limiters, sat tracking,and EOBRs
will produce more problems than they are designed to fix.
Thanks for the excellent comments, everyone. I’ll address a few:
Stephen Large: James, it is not only the ‘fly by nighters’ who cause the problems! Some very big ‘well respected’ carriers are very guilty of disregarding the rules when it suits them and are quite often the lowest freight rates out here!
That’s a fair point about rates, Stephen, although I suspect they are able to offer low freight rates more due to economies of scale than evasion of the rules. I hope so, anyways.
Ray Pratt: I feel that if the companies paid by the hour and in turn charged waiting time by the hour then shippers would soon become better schedulers or they would have a dock full of product and no one to move it. Come on companies, if you all change your ways then things will be better for all.
Ray, I couldn’t agree with you more. I think, and hope, that day is coming.
Kevin: It is one thing to say the status quo needs to change but where is the implementation at Kriska? I believe he quoted that his drivers make about $54000/yr. So, why doesn’t he boost them up to $60000 or $80000 or whatever he feels is appropriate?
Kevin, I can’t speak on behalf of Kriska, but in the current environment with margins as slim as they are, I don’t think it’s realistic to arbitrarily raise driver pay by $6K or $26K. Acknowledging drivers are underpaid is an important first step. But several things have to come together to enable significant industry-wide pay increases, including better enforcement of the regulations and a reduction in capacity – both of which are on the horizon. The old saying “He who has the drivers wins” is about to once again become very real. Who will be the first major carrier to introduce hourly pay to help attract drivers? It may just take that one domino to fall to bring about significant change.
Truckerbutt: as long as there is people out there willing to work for lower wages it will never happen.You can have as many rules and regulation you want someone will always promise to get the load there first.
True. But take a look at the younger generation – folks in their 20s and 30s. You think they’re going to work for free? No way. And as for getting the load there first, that issue goes away when everyone’s playing by the same rules. And with the current technology that’s available, that day could soon be here.
Grad: drivers were the reason companies went to mileage as they would be ‘Dogging It’ all day. either spending more time then needed at a coffee shop or sight seeing but taking 8 hours to do what another guy could do in 5 hours was just a waste.
Grad, It’s difficult to ‘dog it’ with the current technology that’s available. When the truck’s not rolling, the shipper’s going to be paying for the driver’s time. Dogging it should be pretty easy to identify with GPS, EOBRs, etc. And won’t drivers be more motivated when they’re being paid for all the time they’re putting in? I suspect drivers would once again take a lot more pride in their profession if they’re properly and fairly compensated for all that they do.
Doug Brown and Pontiac04, Well said!
Robert: In the end I believe the compensation system must be changed but it must be based on valued productivity not on time alone. Each component (hours, speed, equipment, expertise, boarder, paperwork, safety, routing etc.) must be measured and factored into the costing/quoting/billing system. Today components are not all properly measured and factored, therefore the complaining drivers.
Thanks for the kind words. I think you hit the nail on the head, but there’s no reason this can’t all be calculated using technology. My brother-in-law is an electrician. Anybody can accurately price an electrical job using sophisticated software that takes into consideration everything from wages, equipment, gas/mileage…everything right down to the cost of copper wire on any given day. You just plug it all into the computer, along with the margin you wish to earn on the job and it spits out the suggested quote. Maybe the industry needs to get more sophisticated in how it prices jobs. Then again, it goes back to there always being someone willing to do the job for less. And you must also consider that even a disciplined trucking company may quote low on a headhaul in order to get where it needs to be to pick up a lucrative backhaul…or vice-versa. Hey, there’s no easy answer…smarter people than me have spent a lot of years thinking this through. But it makes for interesting blog fodder. And getting back to my original point, it’s encouraging that there’s at least an open acknowledgement among the industry’s leaders that driver pay has to improve – both the remuneration and also the method.
Hi James Menzies.
Drivers pay? How much are the drivers being paid per mile today vs ten years ago? Now factor in cost of living increases. Why do drivers have to work 60-70 hours per week to make a living when people in a nice office job would never think of putting that many hours to make a living? We are skilled people, we have to share our work space with the general public, who by the way, think that we cause all of the problems on the highways. Check the stats, car drivers cause more collisions than truckers and get away with it. (Speed limiters) Who in there right mind, working in an office or warehouse would work for free for the first two hours when someone (shipper) says “just what for your load”. Or gets yelled at when you arrive 2.5 hours late at the customer (of the shipper) because you were held up getting loaded. We are the second most regulated individuals out there. (Pilots are the first). We move the goods for our countries economy and yet no one will give us the respect we are due. Paid by the hour is the right way to go. Drivers will slow down enough to be safer. No one can ever say that a true, hard working trucker is over paid. If you can not do what we do, then you can never understand what we go through. (Not you James) this industry is changing and if we (the older drivers) don’t train the younger drivers (there are many “schools” out there that do not train what the new drivers need to know) then our image will forever be tainted by the media.
This is s great topic.
I believe some folks missed Ray Pratt’s message when he said Big Horn does pay by the hour.
There are fleets who do run long trips (USA & across CDA) and do pay by the hour. I managed fleets who did this for
years and it is not too diffucult. Fleets can establish trip standards for the lanes they run or for average kms per day and have Professional Drivers claim their exception hours for load, offload, scales, inspections, border crossing,
One point people are missing is when we sign poor freight agreements it is very difficult to pay by the hour or the km.
We have 285,000 Professional Drivers who keep the economy of Canada rolling everyday and as a industry we need to do a better job of selling this.
‘dogging it’ can be watched through a variety of ways today but it still goes on and it is worst with a strickly hourly pay structure. i’ve seen both sides and hourly drivers will say if i’m going to get a half hour overtime i might as well get a hour to make it worth it. but give a driver an incentive system through the mileage pay structure and make sure they do get fairly paid for their down time then i feel you have a fair pay system. you give a driver hourly then there’s overtime (which a driver will want) so there is extra breaks (can’t stop them from stopping) which in turns makes the time the next driver can come into work a little later(scheduling problems, late load possibility, lost of customers). a hourly pay system will not work but neither will a mileage system but combine the 2 and a driver should feel that they are getting paid fairly.
I get hourly pay for detention after two hours, then mileage pay when I am on the road. My theory is that if a customer is 12 hours away, he is still twelve hours away when I finally get loaded. That is why I am late over 90% of the time. Oh well, sucks to be the customer, I did my job. If they want it delivered on time, they should do their job and get me loaded on time.
You may get a positive response from trucking executives for hourly pay, but as you know from the past history of this industry, it will take 20 years to implement. How did Mick Jagger sing it. You can’t always get what you want.
When I look for a company to work for I look ask about hourly, mileage, waiting time, customer base, driver logistics, and geographic area. If they all appeal to me I take the job. If one of these areas are unsatisfactory I politely apologize for wasting their time. If they lie to me I have a very short employment.
I work for a company that pays its company drivers mileage and hourly, so from the time that I start it up, to the time I shut it down I get paid. I may not make as much gross as an owner operator, but I have the satisfaction of being paid for every second that I work. If the owner operators all said that they wanted similar compensation, and put it in a union type proposal, they would have the power to get the companies to pay them fairly. If the drivers weren’t willing to work, then the company wouldn’t make any money, and would rectify the situation really fast.
These guys are just cluing into the issue of unpaid time now? I left the industry eight years ago after twenty eight years for exactly that reason. My only regret was not leaving sooner.
i drive transport for a company that pays me by the hour , but they say i dont get overtime pay until after 60 hours per week , is this right or have they been ripping me off
Eddy – unfortunately, your company is correct. Trucking is federally regulated (*unless* your company doesn’t ever cross provincial or international borders, which is almost unheard of), which means that they don’t have to pay OT until after 60 hours. Here’s the info from the gov’t site:
I know the discussion of hourly pay almost inevitably brings up the topic of ‘dogging it’, but as someone who works quite often on hourly pay (we have a radius – outside of that radius we’re on combination hourly/mileage), I have to say that I still have expectations place upon me as far as the amount of work I accomplish in a day. As well – no matter how much more satisfying it is when I’m on the clock for the day (and yes, there’s a huge difference mentally), there are still many, many things in my life outside the job, so I honestly have no interest in making my day longer than it needs to be in order to bleed a few more nickels from my employer. And in all honesty, my viewpoint represents the vast majority of my co-workers. Certainly there are strokers – no different than any other job and/or industry, and those others manage to survive paying hourly. If it were as bad as some seem to think, then there’d be no city work getting done…