Is a Driver Shortage Surcharge the answer to raising driver pay?

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.

Picture of Montgomery Transport truck
(Photo: Montgomery Transport)

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.

James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 18 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.

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  • We need minimum wage and freight rates and overtime pay. Ido not like surcharge that suggests that drivers wages will drop like a fuel surcharge. E logs will reduce truck drivers freedom to stop when they want pushing out more drivers
    In Ont it is too much money to insure new drivers for smaller fleets.

  • I have been in this industry for 26 years I was an owner operator for 18 of those years. I agree wages are the biggest issue that keeps people from wanting to get into this industry. My son is 21 and just got his license through the company I work for I tried to talk him out of it for 2 years. It’s in his blood he’s a fourth generation driver in our family and he is a natural. His license cost 11000 $$ and if you look at the wages it’s not worth it. You can almost go get a factory job for close to the same wage he had learned to drive a 13 speed and wanted nothing to do with the automatic. When the examiner at the drive test got into the truck and seen the standard she was almost shocked only 5 to 10 percent of new drivers are learning this skill. And it is a skill and disappearing rapidly company’s want to fill seats and not have to teach this any longer get automatics problem solved fill the seats quicker. I’m very sad at the direction the industry has gone I’m turning 49 this month and I constantly have conversations with my wife on exiting this industry. There is a definate need for wages to change now with the M.E.L.T. program and the high expectation required of a licensed driver there shouldn’t be a qualified driver making less than 80k a year. Things have to change autonomous trucks aren’t the answer wages are the biggest problem facing this industry but nobody wants to address or deal with the problem. Everytime there is an article I like in a positive way to say it truthfully but in a direct manner of the problems that face this industry thanks for the opportunity to comment.

  • What driver shortage? The shelves are stocked, gas stations have fuel. Show me freight piling up on docks! The media and the trucking associations have bern lamenting about the imaginary driver shortage for decades…I’M yet to see it!

    • Go to the grocery store. Look behind the products you see at the front of the shelf. It’s an empty space. There aren’t enough drivers to move the freight.

  • Nice words and substantially higher pay will never happen, ESPECIALLY cross border freight. We still have shippers asking for lower rates, fuel surcharges are non-existent and large deadhead miles are common. Add in lack of parts plus multiple days wait time for truck repairs results in the perfect storm for drivers to leave en-masse. My Truck has required about 18 hours of repairs (in November 2021), I have lost 14 days of work for that 18 hours. The lack of mechanics is exacerbates the situation.

    • O t R drivers should make 1.9 times after 5000 hrs experience. Mechaniis need to make 2.1 times 16/ hr plus a $3 / hr tool allowance after 5000 hour after getting their full permits. The industry seems to count on off shore workers. Farms should be limited to 50 off shore workers and truck companies should only be able to get 2 person/ year.

  • For at least the past ten years the mega carriers having been talking about increasing wages and how. Well what are you waiting for? An engineers report, an environmental assessment, a community focus group? Let me guess you’re showing government bureaucrats how to drag your feet even slower. Here’s an idea pay by the hour with time and a half after eight hours. All of the trucks have GPS and most have cameras so there is no reason not to. While I’m at it how about the driving schools bring in a labour lawyer and have them tell the students their rights under federal and provincial law. I’m sure the carriers if they have any ethics and morals will endorse this idea. Here’s an example… under federal law you are entitled to THREE PAID SICK DAYS per year under the labour code. Don’t believe me look it up.

  • Company drivers need to be paid by the hour based on their e logs. Quit asking them to work for free it’s insulting to their inteligence and something that no one else in your company would do. Without drivers you have zero revenue it’s time for this industry to wake up and hold shippers / reveivers accountable for turning trucks around efficiently or paying for the privlege of having it parked waiting in your yard. This is simple to solve and companies are greedy!

    • Well said Andy and 100% true. Drivers are the bread & butter of a company. No drivers no company. And sadly the drivers are treated the worst.

  • That’s handy ! When the driver shortage wains a bit, the surcharge turns into a pumpkin and the drivers loses again.

  • I retired from trucking 3 years ago after 43 years.
    I was an owner operator most of those years hauling tankers coast to coast.
    I remember when a bunch of us guys were sitting in the drivers room waiting for dispatch. The dispatcher would come in and say I need someone to go pick a loaded tank or drop off a tanker etc etc. at first someone at the table would do the task. But when the pay statements came in no one was paid. So next time they asked no one flexed a muscle. We told them our trucks run on fuel which cost money! Our time is worth something also. I remember the dispatcher saying well your sitting here doing nothing and waiting for a load at least you can do something. Absolutely no respect for owner/ operators! And can go on and on but those of you who have been in the business for some time know exactly what I’m talking about!

  • Surcharges are a pox on the industry. Just have the fortitude to increase the rate. Shippers don’t want to be hit with surcharges every time you prove you can’t manage your business.