The thorny issue of how, and how much, professional drivers should be paid came up during the Truckload Carriers Association’s Bridging Border Barriers event Nov. 17.
Speaking during a panel discussion on human resources best practices, Michael Zelek, HR director for Wellington Motor Freight, raised eyebrows when he said his company pays its drivers a salary. “We took the onus off the driver for earnings, and put it on planning, dispatch and our operations team,” he said.
Local drivers who are home every night are guaranteed $65,000 a year while longhaul drivers earn $75,000 to $80,000. Drivers are told they’re expected to put in 50 hours a week. The approach seems to be working. The company has a 98% driver retention rate and once went 18 months without losing a single driver.
But while Wellington’s drivers are seemingly satisfied with their income, Zelek admits it’s still not enough. “Drivers should be paid a lot more than they are,” he admitted.
Mark Seymour, CEO of Kriska Transportation Group, agreed drivers are underpaid. He thinks professional drivers should make a “minimum” of $100,000 a year.
“We all pay about the same amount of money. The way we pay it might differ, but at the end of the day we only have the ability to pay what we charge. It’s a function of what we charge,” Seymour said of driver earnings. “We’ve never been in a better position than we are today to charge a lot more for what we do.”
Indeed. Fleets are unable to do what they usually do in a hot freight market: add more trucks. The supply chain disruptions affecting new truck builds, and even used truck availability, assure that. Those challenges are expected to continue through much of 2022, maybe even longer. Shippers are under the most intense pressure to get their goods to market than ever before.
But as long as there’s sufficient capacity in the market that hasn’t yet adjusted pricing to account for the shortage of available trucks and drivers, fleets are limited to what they can do on the rate, and in turn the wage, front. It’s a frustration for well run fleets that want to do better for their drivers.
“Overall, they’ve got to make more than $100,000,” Trevor Kurtz of Brian Kurtz Trucking agreed in reference to drivers. “We have people in the offices making as much as they are, and they are eating in the lunchroom and going home to their families.”
So, how do you pay drivers what they deserve to earn? Sign-on bonuses were universally decried by the panelists as a short-term solution that’s insulting to tenured, loyal drivers working for the company. Even though some of the fleets represented do offer them.
Wellington’s salary approach has paid off, but Zelek admitted it’s no magic bullet. Drivers are happy working 48-49 hours a week but the one week they hit 50.5 hours, there is inevitably some grumbling and an ensuing conversation.
As I was pondering the answer to new, creative ways of getting drivers more money in a market that will support it, a press release from Birmingham, Alabama-based Montgomery Transport crossed my Inbox. The company has taken the bold approach of adding a “Driver Shortage Surcharge” of five cents per mile to all loads. It goes, in its entirety, to the drivers hauling the freight.
“This year has presented our industry with many challenges as supply chain constraints have forced all companies to adapt and discover new ways to push their businesses forward,” Rollins Montgomery, CEO of Montgomery Transport, said in the release.
“The labor force has been affected particularly hard within the transportation industry as many drivers have found new local opportunities and/or better pay in areas such as warehousing or final-mile delivery to support the e-commerce boom. We chose to address this issue by further investing in our best asset, which is behind the wheel.”
The flatdeck fleet expects shipments to be at an all-time high over the next 90 days, and hopes this move will help it retain and reward its driving force.
Is it gimmicky? I dunno. But do the drivers care? They’re certainly not going to turn down the money. Will shippers accept the unusual surcharge? Do they want to get their freight shipped during the peak season? Will there be a revolt among drivers if the freight market collapses and the company attempts to end the surcharge? Maybe. All these questions merit a follow-up in the future.
But in the meantime, I give credit to the company for thinking outside the box to raise its drivers’ incomes. It may never become universally accepted like a fuel surcharge, but a driver shortage surcharge is certainly a compelling way to reward drivers in this market. Because the one thing anyone even remotely familiar with the trucking profession – even shippers, if they’re honest – can agree on, is that drivers deserve to make more than they do.
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