The quarterly report by Transport Capital Partners (TCP) has been published containing information that should be of interest to truckers, carriers, and anyone else involved in the transportation industry. Among the most interesting bits of information that TCP found was that only 66% of carriers surveyed were expecting to raise driver pay at any time in the next year.
Like many consulting firms, TCP does copious amounts of research to get a feel for a market in order to give their clients a competitive edge. Reports like this aren’t meant to be read by the people that it discusses in terms of percentages, averages, and risk potential which means there’s no shiny gloss put over the hard facts.
So here’s the truth: According to the survey, most companies (especially large carriers) are expecting substantial gains in freight volume in the coming year so they’re looking to expand their carrying capacity by adding more trucks and therefore more drivers. As we all know, carriers have no problem hiring new drivers, it’s keeping those drivers that they struggle with. With an annual driver turn-over rate of over 100%, consulting firms like TCP are looking for ways to increase driver retention for their clients. The most straightforward plan to increase retention is to raise driver pay.
Unfortunately for drivers, as of August of this year only 66% of carriers have plans to increase driver pay over the course of the next year. Of those carriers, only 41% are considering giving their drivers more than a 5% raise.
Despite their need to fill more seats, carriers are still losing drivers faster than they can recruit them. But why is the idea of raising driver pay to increase retention so widely ignored? According to a partner at TCP it has to do with shippers.
“Many observers believe higher driver pay is needed to bring more drivers into the industry,” said the partner. “But, until shippers are willing to pay more, carriers will be unable to meaningfully increase compensation levels.”
This essentially amounts to a claim that carriers cannot afford to increase driver pay. Contrary to this assertion, smaller carriers are on average more likely to increase driver pay or provide better benefits, and have significantly less turnover than large carriers. In fact, 33% of all small carriers surveyed have fully seated fleets despite working with the same shippers that large carriers do.
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