More fleets upping pay to pull in and hold onto experienced drivers

What goes up, must come down, right? Not always. Just consider the implications arising from the results of a new truck-driver wage survey.

According to the latest "National Survey of Driver Wages," a quarterly report issued for the trucking industry by Hudson, Wis.-based SignPost Inc., longevity pay is climbing faster than starting pay, and wages are accelerating the fastest at the top end of the pay scale.

SignPost says higher longevity pay and the upward tilt on the high side are the most significant wage trends because of their immediate impact on the bottom line.

Survey results show that in the first quarter of '96, 25% of the van carriers responding offered maximum starting pay of no more than 25 cents a mile. Two years later, less than 7% of the fleets are in that category. And back in '96, no carrier had starting pay of 34 cents a mile or greater. But now, 7% of the carriers pay in that range.

The graph also charts significant growth - nearly 20% - in the middle two categories, spanning the 26 to 33 cents per mile range for van carriers. Now, 87% of all carriers offer pay in this range. More specifically, the 26-28 cents category has declined from 48% of carriers to 41%. But the 29-33 cents category has just about doubled, growing from 27% to 47% of carriers.

SignPost reports similar trend lines can be drawn for the flatbed and refrigerated segments of the industry. Both segments recorded big drops in the 25 cents-and-under category. The flatbed decline was from 35% to 14% of carriers and the reefer from 40% to 14%.

As with vans, the middle two categories grew. The refrigerated number spiked from 61% to 81% and the flatbed from 58% to 70%. Again, like vans, the most dramatic growth occurred in the 29-33 cents category. Here, the reefer figure went from 21% to 42% and the flatbed from 31% to 38% of the carriers.

Looking across the board, SignPost points out a growing gap evident between the "most aggressive" pay packages and the most conservative ones. "Carriers whose pay packages are being left behind by this move," the firm admonishes, "have some decisions to make."

But wait, there's more. The new survey also indicates more than half the carriers run team operations. The average premium paid these drivers is 34 cents a mile - and almost a third of the team packages put the top pay scale above 37 cents a mile.

Among fleets that have recently announced significant upgrades to driver pay scales is KLLM Transport Services. In August, the Jackson, Miss.-based nationwide carrier said it will boost pay for drivers in its reefer operations by 20%.

Under the new pay structure, drivers with a year's experience at the carrier will see their base pay bumped up from 24 to 30 cents a mile. Base pay can climb above that level - reaching a ceiling of 39 cents a mile available to drivers with 10 or more years of experience. The fleet's team drivers will also gain similar increases in base pay.

These big pay hikes reflect the hard-cash value now being placed on retaining drivers. Having seen the light, however, KLLM is not relying only on base rates pegged to experience to hold onto its drivers.

The carrier is also implementing a $10,000 longevity bonus to be paid to drivers upon completion of five years' service with KLLM. That's a smart move. Truck drivers with a payoff like that awaiting them in just five years are sure to think long and hard before jumping ship to another carrier.

Offering such longevity bonuses also pays off for the carrier in the near term. Drivers who may realize such an award for loyalty will likely want to do all they can to ensure their employment - and the carrier's success - in the meantime.

And it's quite possible that that ten grand will end up less than the recruitment costs, including sign-on bonuses, the fleet would rack up if it let the revolving door of driver turnover keep spinning over those five years.