What am I missing?

Why do some companies happily churn through new drivers? Because they can collect subsidies for hiring the unemployed, they can "train" them in house for next to nothing, they're self-insured, & they can con the financially unsophisticated into horrible lease-purchase programs.


Of the big publicly traded companies, revenue per loaded mile runs from 1.40-1.75 + fuel surcharge.

 

According to Forbes average is 3.6%. High is Heartland Express @ 12%

 

Well, those numbers are what's reported. The real question is, how much profit is hidden in the accounting--"fees", "expenses", "writedowns", etc--and isn't publicly reported?? How much of the actual profit is absorbed by outlandish "executive" salaries and bonuses?

I think if they actually wanted to keep drivers, they would work them as much as they could, and give them the opportunity to get the miles that would help them earn a living. But, as someone has already pointed out, they aren't interested in that because of the windfall they get from corporate welfare that's predicated on abusing the new hires and churning them out the door.

 

The supply and demand equation is rather interesting but I suspect it only scratches the surface when examining pay structure.

There is a high demand but then there is also a very high available supply. Unfortunately within that supply there is a significant percentage of chaff before you can separate the sought after kernels; these kernels are the kind of employee who the employer would like to hire and if they could hire nothing but kernels then I believe market forces would reflect a more appropriate scale of remuneration.

What percentage of CDL students have unfavorable driving records but who slip through the vetting process and get hired only to be terminated for tickets, unsafe practices, or, worse yet, cause an accident before they have been discovered? What percentage are undesirable due to criminal activity, unsavory conduct while on the job, unwilling to perform to standards, or lack the skill set to actually drive safely and negotiate the intricacies of a large mechanical beast?
It appears to me that to be a quality driver you have to have a high degree of motor skills, but you also have to have a high degree of functional intelligence and you have to have adequate social skills that allow you to drive in your own little world all day and then deal with a shipper, dispatcher, mechanic effectively without yelling, complaining or creating an adversarial war of wills. Reading a few post on this and other forums one is left with the impression that there are a few drivers who might have the skill set to drive but may struggle with the social skills and/or may lack a nuanced appreciation or a general understanding of the processes of business. Take any bombastic denouncement of one of the “usual suspects” it is usually littered with unsupported accusations and untenable absolutes that show a lack of understanding for how a service is marketed, sold, and supplied; all while taking place in a competitive business environment that has an ever changing playing field.

Even with a high demand, the available supply is loaded with marginal candidates that until the candidate pool improves across the board the companies will not feel the pressure to increase starting pay. As a number of experienced military personal are mustered out in the next few years that level of discipline and professional conduct may start to create some movement but then it will have to be weighed against the level of overall unemployment (the size of the supply) and the general economy’s growth and the need to transport goods to market (the demand).
From a company's stand point, what is the saturation factor of available shipping units compared to demand? What are the projections not for drivers but for trailers? This would tell us how many drivers are actually needed. Of the drivers needed projections, what percentage are factored as rejects or short term hires 1-3 years? If everyone hired drove for 10-15 years then what would the projection look like?

Great question OP...sorry if I left the pavement and kicked up some dust.

Little Eddy

 

There is no driver shortage.
That is simply a number that reflects drivers that leave one company to go to another, or simply leave the industry, or how many drivers companies would like to hire.
Totally misleading, in every respect.

The CDL schools can not turn out more, they are already maxed out. That is thousands every week!
Swift alone has probably 1,000 new students every week (between the schools and orientations). But they don't increase their number of employed drivers by nearly that much even on a monthly basis.


Supply and demand is a valid point.
But if the demand was SO much higher than the supply, it would be obvious.
And it isn't.
Which means that the demand is actually equal or lower than the supply.

See? No driver shortage, but the opposite.
Too many people wanting to get in, but nearly as many washing out.

It keeps things constant.
And when supply and demand are constant, I doubt a wage increase is likely.

 

I am happy witn werner.. as a new driver.. I am on a dedicated account, they keep me rolling Monday througn Fridah and home on weekends, I net $1200 0r more a week, have good benefits...

I was able to take the Smith driving course and werner is thinking abojt making it a part of orientation... I have a good fleet manager and plenty of support... as I get better and more efficient as a driver I make more.. I have to maintain a certain level of performance to stah on fhe account.. if I dont I can be take an placed on an accou t where I wont make as much. ?

 

I think there are a few considerations, here are two:
First, for some it isn't about the money. Maybe they hate being away from family, or maybe they hate the hours and the regulatory all seeing eye, or maybe they hate chains and bad weather. I am sure there are lots of stories of drivers walking away in the face of very lucrative situations because they were over it. No pay rate will solve any of these problems...well none that are reasonable for this discussion
.
Second, the convoluted pay structure itself is confusing enough to make some throw their hands up in frustration not knowing how much they are actually making for their time and efforts.
If I hit the clock at 7am and punch out at 5pm 5 days a week I worked 50 hours. I take my gross and divided by 50; that is what my time and effort is worth. There is no down time I never wait for someone else before I can punch the clock their are no regulatory limits on when I can punch in or out. Anybody lucky enough to have such a straight forward paycheck?
You get cpm and maybe a flat rate to drop a trailer or load and tarp and maybe they factor in a safety bonus but they already have that as part of your cpm so actually it is not added it is deducted if you don't qualify; per diem, quarterly performance bonus...etc. etc. Most NFL players contracts are not as complicate or convoluted.

Maybe start by revamping the system but be prepared for a real ###### fight. Change comes slowly if at all....

More dust...sorry.

Little Eddy

 

You guys are way over-thinking this.......