It’s time for the U.S. trucking industry to end the charade of pretending not to know that pay-by-the-mile is a failing model that robs drivers of reasonable compensation and leads to increased carnage on our highways.
While the U.S. trucking industry continues to focus its legislative efforts on weakening federal safety regulations, and as almost 4,000 Americans a year continue to die in truck-related crashes, Australia is poised to take a major step in improving road safety by making an historic change in the way truck drivers are paid.
Beginning April 4, many independent truck drivers there will be guaranteed a minimum rate of pay for all their working time, a major change from its current distance-based compensation that is similar to that employed by most motor carriers in the United States.
Australia is taking the dramatic step of restructuring driver pay, even though its overall highway safety record is far better than that of the United States. During 2013, there were less than 1,200 highway deaths in Australia, compared with about 32,000 here. But while Australia’s fatality rate is about half that of the United States on a per-capita basis, more than 27% of all road fatalities there involve a truck, compared with about 12% in the United States.
Safety advocates cite pay-by-the-mile as a primary culprit in highway accidents involving trucks, since it encourages drivers to break the law in order to improve their compensation. For U.S. truck drivers, if their vehicles aren’t moving, they aren’t earning. And, in order to combat fatigue, the federal government caps the number of hours drivers may work, so that stationary time – whether caused by congestion or a delay in loading or a hurricane – reduces the hours a driver may legally earn pay. This has led to a number of unsafe driving behaviors, especially speeding, and to widespread falsification of work logs.
The pay change in Australia was ordered by the Road Safety Remuneration Tribunal and is designed to remove the incentive for drivers to violate road regulations. For now, the rule applies only to self-employed long-haul drivers and independent drivers delivering to supermarket chains; the RSRT is working to expand the new pay regime to other trucking sectors.
Most notable in the board’s action is that the new rules will guarantee that drivers are paid for all their efforts.
Despite a lack of press coverage here on the decision, the board’s actions are remarkable, in that they place an overall benefit to society – namely reducing highway deaths – above the all-pervasive, worldwide drive for faster deliveries and lower distribution costs. Australia’s Road Safety Remuneration Tribunal is, in effect, moving to reduce highway crashes by raising the cost of moving goods and ensuring that the money is used to increase truck drivers’ pay.
The largest group representing fleets, the Australian Trucking Association, has taken no stand on the RSRT’s work, even though the rule is sure to increase fleet costs. “Our members deal with industrial relations matters individually,” said an ATA spokeswoman. “Accordingly, the ATA has been directed by our council that … [it] should not involve itself in RSRT issues. … ”
Unfortunately, this stance is the opposite of that taken by the largest trucking trade group in the United States, the American Trucking Associations, which often takes the lead in opposing government attempts to increase oversight of the industry. The American group said recently that because per-mile pay “is, and always has been, pervasive in the trucking industry,” it “opposes arbitrary rules that would prohibit carriers from paying their drivers on a piece-rate system.”
That stance ignores the reality that drivers don’t get paid for much of their usual workday. “Billions of dollars” of drivers’ time is wasted each year as they wait to load and unload, according to Todd Spencer, executive vice president of the U.S.-based Owner Operators Independent Drivers Association. He told a January meeting of the Transportation Research Board in Washington that drivers are routinely not paid for about a third of their actual working hours and, since drivers are primarily paid by the mile, there is no penalty to the shippers who delay them.
While the U.S. trucking industry continues to question the link between higher driver pay and increased safety, research here and in Australia clearly supports it.
The American Trucking Associations spokesman said that due to the complexity of compensation programs currently in use by fleets, “it would be impossible to pinpoint what impact” changing from per-mile pay would have on safety.
But Michael H. Belzer, a professor at Wayne State University who has written extensively about driver pay, told an audience at the TRB meeting that studies have clearly shown that for every 10% increase in truck driver pay, there has been a 9.2% decline in crash rates.
In Australia, research conducted for the RSRT found “there was a link between driver remuneration and safety outcomes in the heavy vehicle industry.” The agency found that “economic factors … create an incentive for truck drivers to speed, work long hours and use illicit substances” in order to stay awake. The research showed that owner-operators were almost twice as likely as employee-drivers to break hours-of-service regulations in order to make a living.
The Australian legislature created the RSRT in 2012, after much study and debate, as an independent body to oversee driver-related issues in the trucking and bus industries. The tribunal is composed of appointees from the industry, driver groups and the government’s Fair Work Commission, which governs workplace relations. The RSRT has oversight of driver pay issues, collective bargaining agreements involving drivers and research involving matters affecting road safety.
The RSRT has also ruled that independent drivers may bargain collectively with fleets, contrary to the situation in the United States where owner-operators are deemed to be independent businesses and are prevented from bargaining as a group. Truck drivers in Australia are covered by the minimum wage laws of the nation; in the United States drivers are exempted from the protective provisions of the Fair Labor Standards Act that govern most workers.
The move to pay drivers more seems certain to increase the cost of moving goods around Australia, a huge and relatively sparsely-populated island, that is very dependent on motor carriers. But it is a cost the government is apparently prepared to absorb in the name of improved highway safety.
As the Australians have shown, there are other ways than pay-by-the-mile to compensate drivers that allow fleets to get the freight moved without pushing drivers into taking unacceptable risks that endanger us all.
Howard Abramson is a freelance writer who was an executive at American Trucking Associations from 1998 to 2014.