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The Road to More Money
Drivers, you’re in the ‘catbird seat’
From his perch in the “Catbird Seat,” legendary baseball announcer Red Barber had the best seat in the house. This is where the nation’s truck drivers are right now: in the catbird seat.
Not unlike the Boston Red Sox, truck drivers may be about to shed a historic curse, which includes years of low pay and no respect

Professional truck drivers have suffered like the late comedian Rodney Dangerfield – he suffered such lack of respect, he once said, that when he stuck his face out the window, he got arrested for mooning.

But these days, according to corporate reports and independent sources, the transportation demands of an upward-trending economy have drivers coming out winners as a “sea change” roils the freight industry.

“There does appear to a greater demand for drivers,” said Todd Spencer, OOIDA’s executive vice president. “Industry experts say a high turnover rate is partly to blame. The latest turnover rate for good carriers is about 116 percent.”

Spencer said there was a growing realization that sign-on deals would have to get better if carriers are going to address their long-term needs for drivers. But it’s more than that. Spencer pointed out that the “good companies know if you lose drivers out the bottom as fast as you put them in the top, it does no good to offer just perks” to get quality people in the door.

“They need to improve pay and working conditions – the question is, do they have the courage to do it? In the meantime, the key point we’re making to drivers is, ‘you have value, so don’t sell yourself cheap’”

Salary issues
Freight company executives have acknowledged that truck drivers’ wages must rise by up to 50 percent if the capacity dilemma is to see serious relief.

The average annual pay for a truck driver was $32,134, according to a July 2003 Labor Department survey. That was slightly above the average pay for all so-called blue-collar occupations, but it doesn’t take into consideration that the trucker worked twice as many hours to earn it. Although base pay – cents per mile – has risen 22 percent in the last 10 years, inflation has risen 27 percent during the same time frame.

OOIDA Foundation project leader John Siebert says the Labor Department figures also apply to owner-operators.

“That’s because the difference between company driver pay and owner-operator pay is traditionally negligible,” he said. “The truly forward-looking carriers want to build a sustainable business with long-term fixes, like changing the inherent nature of the truck driver’s job description so we can get quality people to select truck driving as their profession of choice.”

Meanwhile, the demand is unlikely to abate soon, as the government estimates the number of truck drivers needed will jump 19 percent from 2002 to 2012 – making it one of the fastest-growing occupations.

“There are not an awful lot of people who are raising their children to be truck drivers,” said Scott Arves, president of the transportation sector at Schneider National, Green Bay, WI. “Until we are able to move wages up significantly, I’m not sure we are going to be able to attract vast amounts of people.”

Schneider and other trucking companies are trying to fill jobs by offering owner-operators and other drivers cash bonuses and prizes such as boats and vacations to refer fellow drivers who switch to their firms. Base pay is rising, and trucking companies are guaranteeing drivers more time at home. Some firms are offering generous 401(k), stock-option and health-care packages and other perks. 

Pay for dry-van truckload company drivers increased 2.8 percent from spring to summer and rose even higher by the end of this year as pay scales made their biggest gains in 10 years, according to the National Survey of Driver Wages. 

However, wages for long-haul drivers are still not high enough to permit much of an increase in truckload capacity, which has been held back by motor carriers’ inability to recruit and retain enough new drivers, the survey said.

Gordon Klemp, who conducted the research for SignPost Inc. of Hudson, WI, said wages had to rise substantially in order to secure enough drivers.

At a “capacity constraints” conference in Atlanta in October, Celadon’s former chairman and CEO, Steve Russell, commented on the issue.

“High fuel prices and driver availability are the two main areas of risk we foresee that could affect profitability,” Russell said. “We expect competition for quality drivers to remain intense and that driver numbers will be the most substantial limiting factor on capacity growth.”

Russell said that although Celadon’s driver-pay increase and its new tractor program have actually improved the company’s percentage of company trucks with drivers compared with the same time last year, Celadon is cautious about its continued ability to recruit and retain quality drivers in this tight driver market.

“We do not anticipate further compensation increases for our drivers during the second fiscal quarter (January-March 2005),” said Russell, “but we believe additional increases by all carriers will be needed in the future, as rates allow.”

J.B. Hunt’s Kirk Thompson said the Arkansas truckload giant agreed that “the current driver wage is inadequate to attract enough qualified drivers.” To find a long-term solution, Thompson recommended manipulating shipments to take advantage of weekends, essentially keeping the trucks rolling.

“Everybody knows when the wheels stop, the money stops. While carriers could find solutions 24/7,” OOIDA’s Siebert said, “the shippers do not yet have any motivation to do their share in making this happen. If capacity continues to decrease, they’ll find their motivation.”

OOIDA’s executive vice president summed it up.

“This is not a greed issue,” Spencer said. “It’s as simple as this: Drivers want to be productive when they are on the road; that means getting loaded and getting unloaded in a reasonable amount of time and not performing free labor. They need to get deliveries made without wasting an inordinate amount of time. When it’s time to be off, they want to be home with their families. This isn’t unreasonable.”

Spencer said there’s been no better time for all professional drivers and small trucking businesses to hold fast to negotiations for better pay and better working conditions, better routes and more time off.

Sandi Soendker, managing editor, also contributed to this article.

dick_larsen@landlinemag.com
sandi_soendker@landlinemag.com

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