It’s time to end pay by the mile

No conversation about safety would be complete without a look at how we pay our drivers. Yet pay and safety are rarely mentioned in the same sentence.

Many stakeholders, including myself, believe the pay-per-mile model favored by 90% of highway carriers contributes to declining safety on the road.

When drivers only get paid when the wheels are turning, their incentive is to cover as much distance as possible regardless of the conditions. I cringe every time a truck flies by me in the middle of a blinding snowstorm.

hourly pay on speedometer
(Illustration: iStock)

With more inexperienced drivers — armed with their minimum 103.5 hours of “intense” training — getting behind the wheel, I am worried about the risk that comes when chasing miles.

At MSM Transportation we never had the courage to change to an hourly model even though we knew it was a better system. This is what carrier executives who have made the switch are telling me about their experiences.

Positives of hourly pay

Fair pay for fair work is paying dividends for fleets that have made the leap to per-hour alternatives. Recruiting drivers is easier and new hires are hanging around longer, improving their retention rates.

The commitment to hourly pay and framing it around safety can attract a more conscientious recruit. This “state of mind” is reflected in improved safety ratings and reduced insurance premiums. A happy driver is a more productive and safer driver.

Costs hard to capture

Hourly pay comes with costs that can be hard to capture, though, and they weigh heavily on fleets as they look at this model. Expect significant implementation costs to get it right. Your team has to be ready for short-term pain before any expected long-term gain.

Also prepare for operating costs to increase once you start paying for work that once was “off the clock.” Many fleets told me that once delays were on their nickel, they worked a lot harder to eliminate them and other costs that were once acceptable.

ELDs are the game changer

One of the fears carriers express about paying drivers hourly is the potential for “stealing time.” How do you police a driver’s activities when they’re 1,200 miles away?

Electronic logs have calmed the old-school naysayers. Every over-the-road carrier I spoke with said how much easier it is to manage hourly pay when the vehicle has an ELD.

As one CEO told me, ELDs create a standard that’s hard to beat: “Every driver uses the same technology on every truck, all day, every day.” With telematics, that 1,200-mile distance doesn’t seem like such a big deal.

Not all or nothing

As I mentioned in last month’s column, the safer carriers are safer than ever.

Most top fleets recognize the inherent dangers of chasing miles. They augment their pay-per-mile model to make sure drivers are compensated when the wheels aren’t rolling. Today, lots of fleets pay drivers for unexpected delays. They dole out bonuses for winter weather driving, daily minimums, and productivity.

What about paying drivers a salary? Yep, there are highway carriers doing it.

Fearful of costs

My guess is that 10% of highway carriers are all-in on the hourly model. When you consider the benefits, you have to ask why more haven’t switched.

Some are fearful of the added costs. Short-term inflation and economic uncertainty have put the kibosh on many carriers’ plans to change.

Some owners I spoke with agree that we’d all be better off with an alternative to per-mile pay but aren’t prepared to take the risk. They understand the cultural change and work involved. “Upsetting the apple cart at this stage of the game” is not on the table for a lot of successful fleets, one exec told me.

Attracting drivers

Putting safety aside, an hourly wage makes the driving job more attractive. People coming from some other line of work — or from a competitor — don’t have to wrap their heads around a Byzantine compensation system to know how much you’re going to pay them.

The industry has a problem in that currently no one wants to be a truck driver. The ones who do insist on being paid as independent contractors. Paying drivers by the mile is not working very well. It hasn’t for years, and it’s time for change.

Mike McCarron is the President of Rite Route Supply Chain Solutions, a 4PL that provides “Over the Road Technology Driven Logistics” solutions. He can be reached at 647-478-4921 or mike@riteroute.ca.


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  • Well said we need to set a min rate for drivers with 5000 hrs of experience for O T R drivers. Also a plan to train and insurance for new truck and bus drivers. The current model of mileage pay with e logs will push out more truck drivers. We’ll said . The result of doing nothing will be laws like the A B 5 being brought it

  • Oh it’s time for change,should been done yrs ago.
    Alot has changed ELD, in some cases speed limiters (which by the way is law in Cabada) even though isn’t enforced by either MTO/OPP,some xarriers out there think they are above the law.
    Secondly if this industry wants to attract new drivers then
    In my opinion why should drivers be losing $$ all because a shipper/receiver
    Plays games and ties these drivers up for hours,border crossings
    Traffic congestion(there is more traffic volume on our road ways then was 40 yrs
    Ago.
    All this more and affects a drivers pay,please tell what industry do people work for free! No one does,all back onto the driver, not the company
    We all know they are still making profits,in alot cases
    Hugely.
    And lastly this at end all plays into safety, one would only think paying hourly would be way to go.

  • I worked for a company that paid hourly. We had one of the best safety records in Canada and almost zero accidents that were our at fault. Pay per mile is asking for trouble.

  • Schneider National will have all drivers on hourly pay by the end of July. I’m helpful this will help recruit and retain drivers in the long run.

  • Pay per mile or trip destination in my mind is still the better way,but I would add that carriers must
    Be realistic in providing adequate time for a driver to reach destination,including proper rest times fueling,lunch or dinner stops! As well drivers must be paid hourl when they are tied up at shippers or receivers doors waiting and waiting,when I owned Transit Transport our drivers were rewarded monetary funds and recognized for outstanding safety for a years free accident driving!

    • Gaylea pays by the hour with time and a half on Sunday company share plan 5% pension match a good medical plan home daily and no driver shortage .ost make about $28 base plus bonus a safe place a model for other companies also help drivers and other employees to find housing at the teaswater location

  • Good evening Mike
    Your question about the trucking Industry moving to an hourly pay scale is an interesting one. I was recently a speaker at a driver recruitment and retention symposium when this question was brought up. As a twenty-five year driver veteran i was strongly against it. I’ve seen a lot of changes in this industry some great, some good and others. With the bringing in of elogs I’ve seen the pendulum swing from the “Get er done” to the ” I have no hours”. The latter would love an hourly pay. People like myself who do LTL would not. The more I do the more I make. Something my company does is a top up pay. They have figured out my daily pay. If for whatever reason I don’t achieve my daily average for the week, my company will pay me 90% of my average. You talk about chasing miles, maybe we should be educating drivers to a higher standard. Make the trade a red seal trade. Get rid of the misnomer that this is an unskilled vocation that has a bunch of uneducated yahoo’s tearing up and down the road. Yes we have a few but they aren’t as common as they once were. I’ve seen the mile chasers, some with my company. When you talk to them and explain the advantages of doing things this way rather that it is quite amazing when you see that proverbial light come on.

    If you have any questions, feel free to email or call me at 902 308 9828

  • Hello Mike,

    Interesting concept albeit challenging to find a fair working model
    for drivers that that do long haul and and spend several days or a couple of weeks on the road.

    I’m looking forward to the feedback from company owners.

    Regards,

    Don Faiers

    Simcoe Driver Service

  • ELDS might work for some but I still see drivers at place I go to siting sitting waiting to go in to the place they have to del. Killing time and after unloaded sitting hanging around because they get paid by the hour then blame it on the Company they are delivering to there was a line up of trucks I see that a lot where I do a lot of picking up.

  • If you’re talking about safety, perhaps you should look at the service centers and other places that the drivers have available to stop. There are few truck stops left in Ontario and many of the slips are unavailable due to full time parking practices. In order to stop, you often have to drive a lot further, creating an urgency to make it there before all the available slips are taken and your time runs out. In the northern areas of our province, they have taken the liberty of carving out a place in the sides of the road to display billboards encouraging drivers to “Take a break.” How about creating a few places for them to do so? I mean, we’re talking safety here, right?

    • Ont needs another 13,000 truck parking spots with wifi and bathrooms. 5000 of those spots should have 110 v 20 Amp plugs free from for trucks with a special card for those companies alow 10% of their spots to competition and owners ops on a share parking network.