It may not have exactly been “the shot heard ‘round the world,” but for many company drivers, it may have been the most important event in the American trucking industry last year, the echoes of which are still being heard.
In the middle of August last year, U.S. Xpress (12th on Commercial Carrier Journal’s Top 250 ranking) announced it was raising pay for its solo drivers by a mammoth 13 percent, the highest single raise in the history of the Chattanooga, Tenn.-based company.
(See a video of U.S. Xpress Chief operating Officer Eric Fuller discussing the company’s reasons for the pay raise below.)
As a result, 2014 created a new high-water mark for company driver pay, and most likely set the stage for more of the same in 2015.
What was good for U.S. Xpress drivers turned out to be beneficial for many others, as numerous other companies, including — and especially — industry leaders like Swift (third on the CCJ Top 250 list) and Knight Transportation (26th) raised driver pay as well.
Gordon Klemp, whose National Transportation Institute (NTI) has tracked truck driver pay for many years, says the actions of U.S. Express, Swift and other trucking companies made 2014 an exceptional year for driver pay, something he expects will continue throughout 2015.
Klemp uses the NTI’s Driver Wage Index to track changes in pay for company drivers (Class A CDL holders & Class 8 equipment, OTR and regional). Created in 1994, the baseline for driver wages was set at 100. It advances or falls (as it did in the early 2000s) as wages go up and down.
The NTI Driver Wage Index for 2014 improved from 144.27 in the first quarter to 147.83 in the fourth. It also climbed from 2013’s 143.57.
|2014 Company Driver Pay Index|
The indices for each of the three categories tracked by Klemp – dry van, flatbed and refrigerator – all moved up in 2014.
“Overall driver pay in 2014 was the strongest we have ever seen,” says Klemp. “We have 20 years of history and 2014 topped all other years in terms of the amount of activity and the size of the moves.”
|Company Driver Pay History|
“U.S. Express made a huge move,” says Klemp. “It was somebody who stepped up and made a major move, and was loud about it. Loud to the driver community.
“It did touch off a lot of others who moved in response. The market took a ratchet up because a market leader made a big move and everybody noticed. It got a lot of people doing their own thing and making significant moves with their drivers.”
Klemp, located in Hudson, Wisc., said many of the biggest pay moves were made by industry leaders.
“Some big, aggressive carriers began to move,” says Klemp. “Crete (20th), Hunt Transport (6th), Covenant (40th), Heartland (28th), all large operators, made pretty bold moves and separated themselves from the pack, and now the pack is responding.”
According to Klemp, these major carriers set reducing turnover – which is at an all time high – as a goal, and their raises were meant to help meet it. Increasing pay was also the most direct way for companies to deal with the driver shortage
Klemp says he expects to see driver pay to continue to increase this year. And, he says, so will other aspects of driver compensation, benefits and driver comforts.
“Very few new people are coming into the pool,” says Klemp. “People are making an effort to retain their high quality drivers, and some are having success with it.”
But, pay raises still may not be enough this year as freight demands remain strong and there is no sign of the driver shortage abating any time soon.
“From all signs,” says Klemp. “This (2015) will be a very competitive year to hire drivers. We see a lot of pressure on the market. It is almost impossible to hire the number of drivers needed.”
This rising tide of improved driver pay has lifted the boats of each industry segment: dry van, flatbed and refrigerated.
“All three (categories) moved up very nicely this year,” says Klemp.
And, here’s what he said about each:
Flatbed: “It was a great year for flatbedders.”
Refrigerated: “It was a very good year for refrigerated. It’s a very solid driving career. The miles are good month in and month out; not lots of ups and downs in the economy.”
Dry van: “It wound up being a great year to be a dry van driver. The first half of the year was not too exciting, but they finished great.”
The wage index for dry van drivers advanced the most in 2014. It advanced from 139.11 in the first quarter to 145.44 in the last; a jump of 6.33.
For flatbed drivers, the wage index moved from 147.19 at the beginning of the year to 150.96 at the end, advancing 3.77.
The wage index for refer drivers moved from 145.51 to 147.10, a change of .59.
|2014 Quarter||Flatbed||Dry Van||Refrigerated|
As it did for company drivers, pay for owner-operators improved in 2014. According to ATBS, a financial services provider for owner-operators pay for leased operators and independents earned and average of $56,167 last year, a 7 percent gain.