A overwhelming majority of carriers surveyed say they are likely to increase wages while expanding their searches for replacement drivers as attracting and retaining operators continues to be a growing challenge for the industry, reports Transport Capital Partners in its latest fourth quarter business expectations survey.
As capacity tightens and cost rise, carriers are responding with higher rates. “However, carriers remain hesitant to add capacity because of a shortage of experienced drivers, with replacement far outpacing additions on order boards for new tractors,” observed Richard Mikes, TCP Partner and survey leader.
In the latest TCP survey, over 90% of carriers reported driver wage increase expectations. More than one-third said they expect wage increases to be in the range of 6-10% – double what was TCP reported six months ago.
“Carriers are seeing potential applicants go to other sectors, like construction, where there is more predictable home time and where extra pay is not limited by Federal Hours of Service regulations. The end result is that revenue from rate increases will go into purchasing new equipment, driver wages, rising maintenance costs, and regulatory costs – and not as much into the carrier’s pockets in 2015,” added Steven Dutro, TCP Partner.
Despite the shortage of qualified drivers, there has yet to be a major shift to hiring entry-level drivers. Although over 80% of respondents say they support hiring younger drivers to fill seats, the percentage of carriers actually hiring inexperienced drivers is only at 33%.
“It is likely that the shift to hiring more inexperienced drivers will continue, albeit slowly – sixty-four percent of carriers surveyed indicated they would be interested in hiring less experienced drivers. Larger companies are twice as likely to hire inexperienced drivers as smaller companies, perhaps because they have the staff and resources to invest in training facilities and co-drivers,” said Richard Mikes.