Trucking Firms Raise Pay To Keep Moving

by Marty Cook  on Monday, Aug. 11, 2014 12:00 am  

Maverick Transportation opened its new $4 million driver training center in late July in North Little Rock. | (Photo by Wil Chandler)

When Steve Williams held grand opening ceremonies for Maverick Transportation LLC’s driver training center in late July in North Little Rock, the event came on the heels of his company announcing two pay raises for its drivers.

Williams said the pay raises, one an across-the-board 2 cents-a-mile raise and the other the waiver of a waiting period for a performance bonus, would raise his drivers’ annual pay to $50,000 to $58,000 for a first-year driver and to as much as $80,000 for an experienced driver. Then, Williams added an important insight.

“It’s not enough,” said Maverick’s founder and CEO.

Listen to any Arkansas trucking company executive — with the possible exception of unionized ABF Freight — and you will hear lamentations about driver shortages in the industry. Williams, in his opening remarks at his center’s christening, said it was important that potential drivers look at the industry as a “career of choice and not a last resort.”

Short of cultural change to repopularize the job, executives know they have to pay more to attract drivers and work harder to keep them. The trend doesn’t look like it is going to get any better anytime soon.

USA Truck of Van Buren had an otherwise positive quarterly earnings report tarnished a bit by problems caused by driver shortages. USA Truck reported net income of $700,000 on $125 million in total revenue, its first positive quarter since 2011, but the trucking segment of the business still had a quarterly operating loss of $1.7 million on $83.2 million in revenue because of unseated trucks.

Executives said 8.1 percent of the company’s 2,196 trucks — about 177 at any given time — sat unused because of a lack of drivers. Filling just 100 of them would be enough to break even, Beckham said.

“We could put hundreds of drivers to work if we had them,” said USA Truck CFO Cliff Beckham, who last week announced his resignation. “Everybody is scrambling. It’s like a game of musical chairs. When the music stops everybody tries to grab a chair, which is the driver.”

John Simone, USA Truck’s CEO, said in a conference call that the company is continuing to try different methods to recruit and retain drivers. He said turnover peaked in April and was improving through July, but said it was too early to tell when the company would hit its goal of 6 percent for unseated drivers.

During the same July 31 conference call, Beckham said the company would institute a pay raise that would average about 1 cent per mile per driver. Beckham agreed with Williams that pay raises will help but would not be the only cure.

“There’s a long-term demographic structural problem in our industry,” Beckham said. “There are more jobs than people coming in to take jobs. We have seen a tightening of the labor pool.”

Jim Ray, a co-founder of Fastport, a company formed to help combat the driver shortage problem, said the average age of truckers is 55 and that 300,000 jobs will need to be filled by 2020.

 

 

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