TL carrier USA Truck said it boosted pay rates for new independent contractors by 33 cents a mile effective October 1; raising pay from $1.02 per mile to $1.35 per mile for them, depending on length of haul.
The company added that its independent contractors will also receive substantial discounts on retail fuel prices at all “in-network” fuel stops, along with preferred labor rates and discounted parts when they take their equipment to USA Truck maintenance facilities.
“Our continued success in serving our customers derives from selecting the best contractors available, which we can do by providing fair and equitable compensation,” said Martin Tewari, the carrier’s president, in a statement.
Stifel Capital Markets recently noted in a research update that USA Truck “has been in the middle of a transformational turnaround period” after having struggled through the Great Recession and “expects operational improvement” to be the focus of the asset-based portion of its business for the time being.
The firm added that USA Truck has “respectable cash flow” but expects the carrier to use it for share buy backs, not for merger and acquisition activity.
Stifel also pointed out in its note that the driver shortage/turnover problem is “the major challenge perennially” facing the trucking industry and that offering higher pay is but one tactic that can be deployed to help alleviate the issue.
“While it may be unsolvable, the cost of high turnover can be actively managed by harnessing survey data to make mid-course corrections in employment policies, pay and benefits programs, loyalty/rewards programs, recruiter and dispatcher staffing decisions, etc.,” the firm said.
