According to its latest survey, the American Trucking Associations (ATA) said median salaries for truck drivers all sectors of the industry – from TL to private fleets – remains on the rise. That echoes similar findings recently released by the National Transportation Institute (NTI).
Per the ATA’s latest Driver Compensation Study, the median salary for a TL driver working a national, irregular route topped $53,000; a $7,000 or 15% increase from ATA’s last survey, which highlighted 2013 pay levels. Meanwhile, median private fleet driver pay jumped to $86,000 from $73,000 over the same four-year span, the trade group noted – a gain of nearly 18% – with median pay for all types of truck drivers combined up 11% compared to ATA’s last study.
“This latest survey, which includes data from more than 100,000 drivers, shows that fleets are reacting to an increasingly tight market for drivers by boosting pay, improving benefit packages and offering other enticements to recruit and retain safe and experienced drivers,” noted Bob Costello, ATA’s chief economist, in statement, who added that in addition to rising pay, fleets are also offering more “generous” signing bonuses and benefit packages to attract and keep drivers.
“Our survey told us that carriers are offering thousands of dollars in bonuses to attract new drivers,” he said. “And once drivers are in the door, fleets are offering benefits like paid leave, health insurance and 401(k)s to keep them.”
Those findings are backed up by data from the Quarterly National Survey of Driver Wages report compiled by NTI, which found the trucking industry is “experiencing unusually aggressive and volatile movement” in driver pay – evidence that the market is headed into a significant driver shortage.
“Driver compensation is changing faster than it has since 2015,” noted Leah Shaver, NTI’s COO. “We’re seeing unprecedented movement in driver pay.”
Per NTI’s research, TL driver pay moved up an average of 2.9 cents per mile in the first quarter this year, with sharper pay increases for flatbed and refrigerated or “reefer” operations of 3 cents and 3.3 cents per mile, respectively.
In terms of sign-on bonuses, the increases are even steeper, said NTI. For example, in January, average sign-on bonuses jumped from $2,500 to $7,000 in year-over-year comparisons for the dry van sector, increased from $1,000 to $3,000 in the reefer segment, and jumped from $1,500 to $6,000 in the flatbed sector.
“[The first quarter] is off to a fast start with more announced and implemented pay changes than any first quarter in our 23‐year history,” noted Gordon Klemp, NTI’s principal, in a statement.
“Our belief that this year will be one that the pricing power officially moves from shippers to carriers is beginning to unfold; and it will stay that way until there is a solution to the driver shortage,” he added. “While we expect carriers to be bigger winners than shippers, there are many opportunities for shippers to lower freight costs by reducing unnecessary inefficiencies at the loading and unloading docks. In fact, one of the best ways shippers can quickly increase capacity, is to drastically reduce driver downtime at the dock.”
Yet the need to find and keep more drivers is only becoming more problematic for trucking, said ATA’s Costello. Currently, per ATA data, the industry will need about 900,000 new drivers over the next decade or so largely as replacements for an expected wave of retirements. Indeed 49% of those 900,000 will be needed to cover driver retirements, with only 28% required to handle ongoing freight growth, according to the trade group’s numbers.
The reason for that “retirement spike” is that the average age of a U.S. truck driver now hovers around 50, compared to 42 for the average U.S. worker, Costello noted; pointing out that the industry was also short about 51,000 drivers last year, based on freight demand – a shortage that is expected to jump to 174,000 by 2026 if the trend lines don’t change.
“That does not sound like a lot when you compare that to the often-cited 3.1 million truck drive population figure,” Costello said. “But when you whittle it down, 1.7 million of them are tractor-trailer drivers and 500,000 of those are in that long-haul irregular route TL segment, which is where most of the shortage is. And being short 51,000 drivers in a population of 500,000 is a bigger deal.”
Dan Murray, vice president of the American Transportation Research Institute (ATRI), added in separate commentary that truck driver age levels are a “sobering issue” as the industry has one of the smallest percentages of younger workers. “And trucking is 5% of the nation’s GDP,” he added.
NTI’s Klemp voiced similar concerns in his commentary on driver pay trends as well.
“We should all find it alarming that the only age groups where we find a higher percentage working are in the 55 and over categories. Combined with a low labor force participation rate and a current unemployment rate of 4.1%, which is very nearly full employment, and you can see we have a problem,” he said.
“The threat is obvious; we have very few people who want to work who are not working and have an accelerating economy, [so] it appears that there is no help on the horizon for what will become a growing driver shortage,” Klemp stressed. “Our conclusion is 2018 will be a banner year for growth and profitability, but trucking will confront a very serious driver shortage which will require shippers to become participants in solving bottlenecks at the docks.”
ATA’s Costello echoed that outlook as well. “This data demonstrates that fleets are reacting to concerns about the driver shortage by raising pay and working to make the job more attractive,” he said. “I expect that trend to continue as demand for trucking services increases as our economy grows.”