More Trucking Companies Leverage Pay to Attract Drivers
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Trucking companies are continuing to boost compensation packages as the coronavirus pandemic and the ongoing driver shortage intensify the challenges of keeping seats filled behind the wheel.
Asset-based regional and national carrier Cargo Transporters on March 17 introduced a program aimed at providing choices and stable higher per-mile pay rates for drivers. Called the All In program, it is an optional package the carrier offers in addition to standard per-mile rates, and follows a standard pay increase the company instituted earlier this year, Chief Operating Officer Jerry Sigmon Jr. told Transport Topics.
“We had an across-the-board pay raise for all of our drivers in January,” he said. “But we, as many other companies have noticed, we’re still having trouble getting drivers to the door. And one of the things we looked at — even once we put that pay raise in place — was: ‘Do we do a good job communicating what we have to offer?’ ”
Sigmon noted that while the company offers a productivity bonus on top of its base pay rate and benefits package, how much a candidate could see in combined earnings wasn’t translating during recruiting.
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“That’s where we come up with providing a secondary package,” Sigmon said. “Different people like to manage their finances differently. And this way we would be able to basically advertise: ‘Here’s what it is. This is what you’re getting, come drive for us.’ ”
The All In package combines holiday and vacation pay with base rates and productivity bonuses, and lets drivers choose how they’d like to receive payments, he said.
“We also understand that there’s no silver bullet right now that’s going to fix everything,” Sigmon said. “It’s going to be a little bit of everything. And that’s what we’re trying to look at — trying to find out what resonates with the most drivers.”
“Driver wages are influenced by specific factors,” National Transportation Institute CEO Leah Shaver told TT. “Driver supply, which is deteriorating; demand, which is very high; driver turnover, which remains quite high; and freight rates, which are escalating. So we have the perfect equation to see an escalation in driver compensation.”
Artur Express noticed that it was losing drivers as the pandemic drove up spot rates, and responded with pay increases. The carrier in July 2020 raised rates for company drivers from 48 cents per mile to 60 cents per mile, and has since lifted rates to 65 cents. Contractors have gone from $1.55 per mile to $1.99 over that same time.
Shaver
“We noticed, with the contractors, that they started chasing that spot market,” Artur’s director of fleet operations, Steve Green, told TT. He noted that contractors began turning to brokers after seeing steep increases amid the pandemic.
“Pandemic hits and all of a sudden it’s better to do broker loads because a customer pays you $1.50 a mile in normal days. Well, during a pandemic they’re paying you $3.00,” Green said.
He added, “Five years ago we did a lot of broker loads. Now we’re in customer loads.”
Green noted that company drivers were tempted by those spot market rates, so the company reached out to customers to explain why it was necessary for Artur to raise its rates.
“It just came to supply and demand,” Green said. “We were going to start losing drivers if we didn’t get an increase from the customers. We just said it’s time to start paying more now so we don’t have a huge exodus of drivers.”
Cheema Freightlines, a regional truckload carrier based in Sumner, Wash., raised pay by 4 cents per mile March 1. That lifted earnings potential for drivers to between 58 and 60 cents per mile.
“I’m a big believer of drivers need to be paid more for their work and their time,” Cheema Freightlines CEO Harman Cheema told TT. “At the end of the day, they’re truly out there and their job isn’t easy. With the shortages everywhere and COVID and everything else, it’s been kind of the perfect storm.”
He added, “It’s no secret that rates are up and so, with that, we’re able to finally pass some of that back on to our drivers and, hopefully, make it a more attractive job.”
Cheema said with retirements and a slowdown in new entrants, he believes its important to take care of the drivers sticking with the job.
“We’re not trying to just bring on new guys,” Cheema said, noting that while he needs to hire as his company grows, he must also look after drivers already there. “We don’t want to just bring on new guys and forget about the guys that have been here.”
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