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June 15, 2015 3:30 AM, EDT
New Steps to Boost Driver Pay Include Weekly Guarantees
Covenant Transport

This story appears in the June 15 print edition of Transport Topics.

Driver pay increases are continuing at a brisk pace as fleets turn to weekly guarantees, new mileage calculation approaches and steps to cushion fuel price swings, carrier officials and industry experts said.

“It was a very active first quarter for driver pay adjustments,” said Gordon Klemp, principal at the National Transportation Institute, which compiles a report on compensation trends based on 300 benchmark fleets. “We are still short of drivers. On the owner-operator side, people who own their own trucks are really valuable and are getting harder and harder to find.”

Nearly 15% of fleets raised pay during the first quarter, with an average increase of 8.1%, Klemp said. The intensity of driver pay increases measured by NTI peaked in the third quarter last year, when 42% raised pay, nearly four times the typical number of increases.

In recent weeks, Covenant Transportation introduced a $1,000 weekly minimum pay guarantee for experienced hazardous-materials team drivers, while Super Service added guarantees and raised pay by adjusting mileage calculations. In addition, both Bay & Bay Transportation and Transport America raised pay twice in less than three months, with a broad focus on experienced and new drivers and owner-operators.

“One thing we have heard for years from drivers is that the difficult thing with mileage pay is the inconsistency,” Rob Hatchett, Covenant’s vice president of recruiting, told Transport Topics, because of factors out of the driver’s control, such as weather, equipment breakdowns or freight delays. “It can be hard to plan for life when you are being paid by the mile.”

Covenant ranks No. 43 on the Transport Topics Top 100 list of U.S. and Canadian for-hire carriers.

The fleet added features for experienced hazmat drivers such as additional guaranteed home time, compensation when delayed and higher pay for driver trainers.

Hatchett also said the hazmat driver guarantee could be expanded to other parts of the company if it works well.

“We wanted to try to address a few specific things with our driver compensation package,” Dan Strong, CEO of Super Service, told TT on June 11, with guaranteed minimum pay for new entrants or experienced drivers switching to the company.

“This will reduce the uncertainty around pay for new entrants into the trucking industry and provide a safety net for professional drivers,” Strong said.

“We wanted to begin moving away from a one-size-fits-all pay,” Strong said, by adding pay for performance such as safety and fuel mileage.

Super Service also made changes “to reflect the work drivers are actually doing every day,” Strong said, such as paying drivers based on the miles they actually drive instead of the shortest route shown on a map.

Transport America, a truckload carrier owned by No. 9 TransForce Inc., is setting a higher base rate of $1 per mile for independent contractors on July 1, ending a differential between hazardous materials and general freight.

The new mileage standard is the second increase in two months at Transport America. On May 1, the company enhanced fuel and diesel exhaust fluid discounts to pass through 100% of savings to owner-operators.

Its recent enhancements are a $2,000 sign-on bonus for drivers who own their truck, and other pay supplements.

“We’re invested in our drivers’ careers as much as they are, and they understand that we’re able to provide them with the support and opportunities needed for success,” said Mike Bash, director of recruiting for the unit of TransForce, which is based in the Montreal area.

Minnesota-based Bay & Bay Transportation raised pay twice in less than three months, including both new and experienced driver compensation.

The latest increase raised experienced drivers’ base pay to 41 cents per mile to 45 cents based on years driven. Additional bonuses, also based on experience, can add as much as 4 cents per mile.

“In response to the market in general, we are trying to reward those drivers who have been loyal to their carrier,” said Aaron Thompson, executive vice president. “The experienced driver is at the end of the rainbow, standing by a pot of gold.

“The quality of [driver] applicants we have seen in the past few weeks is head and shoulders above what we were expecting” when pay was increased for veteran drivers, he said.

Earlier this year, Bay & Bay raised new driver pay 3 cents per mile.

Asked about the future, Klemp said, “The only thing that will restrain the increases in driver wages is if freight rates don’t continue to move up to support them.”