Arkansas Trucking Companies Showing Drivers the Money

It isn’t all doom and gloom in the transportation industry, and that is good news for those who drive trucks.

Transportation companies in Arkansas are reporting robust earnings in the first quarter of 2022 amid a bevy of supply chain disruptions that have plagued the industry for the past couple of years. Two Arkansas companies, USA Truck Inc. of Van Buren and ArcBest Corp. of Fort Smith, will report their first-quarter earnings between the time I write this and the time you read it.

Last month, J.B. Hunt Transport Services Inc. of Lowell said it made $243.3 million in the first quarter. That’s a whopping increase from the $146.6 million in income J.B. Hunt reported for the same quarter a year ago.

Not only that, J.B. Hunt is hitting the gas in its intermodal division. It said in March it was extending its partnership with BNSF Railway Co. and wanted to add as many as 45,000 intermodal containers in the next five years. The goal is to reach 150,000 of the containers.

During the company’s conference call April 18 to discuss earnings, CEO John Roberts said the company had added 1,889 drivers in 2021 and more than 1,400 so far in 2022. Rates and demand are up — the two are obviously related — and the supply chain movers are reaping the profits.

“Our hiring teams are built out to levels not seen before in our history,” Roberts said on the call. “The increased ability to improve hiring performance [is] enabled by the increases in driver compensation, improved benefits, reliable schedules with predictable home time and a company environment centered on growth for future career expansion.”

Drivers are in line for some benefits since they have enviable leverage in the current environment. The trucking industry has complained, legitimately, about a driver shortage for years; for four consecutive years the driver shortage has been the No. 1 concern of companies, according to research by the American Transportation Research Institute, the nonprofit organization of the American Trucking Associations.

The ATA estimates a driver shortage of 80,000, which could increase to 160,000 by 2030. One way to attract drivers is to pay them more.

Demand for goods is strong, and companies can charge higher rates for transporting them but they must have drivers. And these drivers can pick and choose which company they drive for — or if they even want to drive at all with jobs in other fields such as construction also available.

Walmart Inc. of Bentonville is following the pay-more strategy, as the company recently announced it was boosting pay for its private fleet, some 12,000 strong. First-year drivers can now earn between $95,000 and $110,000, up from the previous average of $87,500.

At J.B. Hunt, profits are rosy despite a sharp increase in employee-related expenses, i.e., salaries, wages and benefits. In the first-quarter report, J.B. Hunt said it paid out $763.6 million in salaries, wages and benefits compared with $620 million in the same quarter a year ago; obviously, J.B. Hunt has non-driving employees earning some of this pay.

PAM Transport Inc. of Tontitown reported earnings of $23.9 million for the first quarter of 2022, an increase from $11.9 million a year ago. PAM CEO Joe Vitiritto said it was the best first quarter in company history.

PAM’s profits increased without much expansion — it had only 40 or so more trucks in operation and total loads went up just 1.6%.

Rate increases were the big factor as revenue per truck was $4,736 a week, up nearly $1,200 from a year ago. PAM also paid out $39.3 million in salaries, wages and benefits, compared with $33.4 million in the same quarter a year ago.

A previous version of this story misstated the number of intermodal containers J.B. Hunt wants to add.

*In billions; other figures are in millions
Source: U.S. Securities & Exchange Commission