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Capacity Crunch to Propel Truck Driver Pay Upward

An aging and shrinking labor pool coupled with rising demand for capacity is going to force fleets to increase, bonuses, and other benefits in order to recruit and retain enough drivers, reports Fleet Owner.

In a conference call hosted by Stifel Capital Markets, trucking trends analyst, the National Transportation Institute (NTI), highlighted a variety of demographic and wage-related trends that will significantly shrink the supply of truck drivers just as the freight industry is poised to experience a significant pickup in freight demand and rates.

That combination of factors may result in steep driver pay and benefit increases the likes of which the industry hasn’t experienced in over a decade, they argued.

“The [truck driver] job and pay package has been completely re-engineered over last decade,” noted Leah Shaver, the company’s COO. “It is now rare to see pay packages without ‘regionalization’ now [because] there are simply not enough drivers to sustain the long-haul model.”

She added that for-hire fleets are favoring “referral bonuses” more frequently now. “Carriers are realizing that these [referred] drivers can be their best recruits,” Shaver noted.

Though private fleets are in a better position in terms of pay and home time, they are finding recruiting to be getting harder as well, NTI’s founder, Gordon Klemp, explained.

“Private fleets have it a little different – they recruit from a more experienced driver pool [and] from for-hire carriers. That’s been a cake walk in the past for them,” he said. “But now they are running advertisements consistently … That means they are having a difficult time finding the drivers they want; the pool is diminishing.”

Yet NTI’s Klemp noted the average age of today’s truck drivers rising and fewer young people even want the job, despite increasing wages.

“Millennials today are totally disinterested in truck driving as a career,” he said. “It’s physically demanding work.”

But now, with freight demand and rates rising, he said “we are seeing a [trucking] market that will potentially take off; we are at the edge of the cliff we’ve talked about for a long time and never reached.”

Klemp warned pay will keep rising until the industry can solve the balance of supply and demand equation.

“We think a lot of crazy things can happen; the next 12 to 24 months will be very interesting,” he said.

Full Fleet Owner story here.

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