Top Fleets Continued Increasing Driver Pay In First Quarter

Freight may be slowing, but truck driver pay is not as fleets continue to grapple with an economy near full employment. According to the National Survey of Driver Wages (NSDW) report for the first quarter of 2019, driver wage growth has slowed slightly, but pay changes rank as substantial, the National Transportation Institute (NTI), which produced the report, said.

"Our subscribers tell us that while freight has dropped and driver churn [turnover] has increased, the need to monitor driver pay attributes that produce desired outcomes remains especially high," Leah Shaver, chief operating officer at NTI, said in a statement. "Some of these outcomes include referrals, safe, productive driving and fair compensation for down time. We're in a market with near full employment, and driver expectations are raised after a record year in 2018. In these conditions, the driver situation changes rapidly."

Per-mile pay for solo drivers is approaching 65 cents per mile for the top fleets, NTI found.

Full survey results are distributed exclusively to NTI subscribers, but Gordon Klemp, NTI founder and CEO, told FreightWaves that the top 10 percent of fleets in the quarterly survey have boosted their top per mile pay rates.

"It's getting more difficult in the marketplace to find high-quality drivers," Klemp said. "The first quarter was a fairly easy recruiting environment from where we've been. The reason [pay] continued to move… is that people have freight and have a need for highly qualified drivers with impeccable records. They are still having a very difficult time finding those drivers, so they are competing fiercely for those people when they find them."

Klemp said the per-mile pay for the top 10 percent is up about 23 percent, or 12 cents per mile over last year, and it continued to jump in the first quarter of 2019, rising about 5 cents per mile.

The bottom 10 percent saw upward movement in pay as well, rising about 14 percent, or about a nickel, to 35.5 cents per mile. Klemp said this group could include entry-level drivers, but also those drivers who have less-than-perfect driving records and are not considered as desirable.

NTI tracks over 70 attributes for the report.

Klemp noted that the firm would expect to see some softening or pullback of pay if the economy slows and capacity increases. That is one of the reasons why it takes so long for pay to rise, he noted, saying that you need to have freight volumes and rates to support the pay increases.

Fleets continue to offer sign-on bonuses for drivers, although the size of those bonuses has decreased. Guaranteed pay continues to be an attractive option for some drivers, and fleets are responding. (Photo: National Transportation Institute)

Even as rates have fallen off in recent weeks, though, the NTI first quarter survey indicated that fleets are still having trouble keeping high-quality drivers.

"Those people who really do have the [higher pay], they're still really struggling to find the right people, and I think that is reflected [in the survey results], otherwise there would be no movement in the first quarter," Klemp said. "The market is getting pretty picky on [driver] experience and driving records because they have a set of drivers to choose from [as opposed to November 2017 through 2018]. Even with more applications, we saw movement in that top 10 percent of pay. Most of the top 10 percent held, but we saw some [increase pay] and that moved the pay from 60 cents to 65 cents."

According to the latest survey, more fleets are beginning to offer guaranteed pay as a way to attract and keep drivers. A guarantee is most common among flatbed operators with close to 60 percent of fleets offering some kind of minimum weekly pay. Refrigerated and dry van carriers are between 25 percent and 30 percent.

Most fleets, nearly 80 percent in all operations, are offering sign-on bonuses, although those are shrinking.

"Our observation is that in Q1 the size of signing bonuses continues to decrease, although the number of carriers offering bonuses continues to remain fairly high. At the same time, carriers that are utilizing some form of guaranteed pay are seeing a positive impact on turnover and hiring," Klemp said.

According to the American Trucking Associations, driver turnover in 2018 rose 2 percentage points over 2017 to 89 percent, although it dropped to just 78 percent in the fourth quarter for large fleets with more than $30 million in revenue. Smaller carriers saw their rate rise to 77 percent and finish the year at 73 percent.

The 2019 Q1 National Survey of Driver Wages report is available through a subscription. To learn more about the report and how to subscribe, visit DriverWages.com.

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