How Fleets Are Adjusting Driver Pay in a Soft Freight Market

Estes Express Lines has structured its routes and dispatching practices to enhance drivers’ work-life balance. (Estes Express Lines)

After implementing substantial driver pay increases several years ago amid the recovery from the COVID-19 pandemic, motor carriers are now looking to protect their margins during a prolonged freight market downturn without cutting wages and risking capacity.

Economic and industry data suggest that the soft freight market — described by some experts as a freight recession — is likely to extend into a fourth year as the trucking industry heads further into 2026. The surge in demand and freight rates driven by the pandemic recovery began to unwind in early 2022, with freight volumes and rates remaining under pressure ever since.

Alex Leslie, senior research associate at the American Transportation Research Institute, has been tracking driver wages over the past several years. The COVID surge led to a 15.5% jump in driver pay in 2022, followed by a 7.5% increase in 2023 and a 2.5% gain in 2024, which was below the inflation rate for the year.

“There’s a couple different ways to read that,” Leslie said, adding that it’s important to note that wages are still increasing, albeit at a slower rate. “It still locks in those huge increases we saw in 2021, 2022 and even 2023. It’s still increasing, at a decelerating rate. We’re not looking at cutting back on wages.”

That deceleration helps explain why many drivers describe pay as flat, even though wages have continued to go up.

Cutting wages is not seen as a viable option for many fleets, said Greg Richardson, vice president of human resources at less-than-truckload hauler Estes Express Lines.

“Driving resources remain scarce,” Richardson said, noting that Estes has continued wage increases despite the soft freight market, prioritizing retention and stability. “The increases over time really are a ‘thank you’ for the hard work our employees put in every single day to take care of our customers.”

At the same time, Estes and other motor carriers continue to confront long-standing perceptions about life on the road that have discouraged younger workers from entering the industry.

“There’s this narrative that drivers live on the road 365 days a year and spend holidays in their trucks at a truck stop,” Richardson said. “That perception, whether true or false, is one of the reasons younger generations don’t see trucking as a career path.”

To address that perception, Estes has restructured routes and dispatching practices, expanded guaranteed-pay programs in some lanes and adjusted how it engages drivers across generations with differing economic priorities.

Richardson said younger drivers tend to prioritize predictability and home time, while more experienced drivers are often focused on earnings stability and long-term security.

“You’ve seen a significant shift by LTL carriers to create more stability for drivers and get them home more frequently,” he said.

That home-time predictability has become a key retention tool, particularly for younger drivers.

“We continue to see really strong retention numbers,” Richardson said. “Focusing on work-life balance has helped us from a retention perspective.”

More Than Dollars and Cents

ATRI’s Leslie said that while pay per mile rates have remained stable and miles per truck have increased, there are other factors impacting how much pay truckers are taking home each week.

The cost of driver benefits increased by nearly 5% in 2024 compared with the prior year, driven largely by higher healthcare expenses, according to ATRI data. The increase has been especially pronounced among smaller fleets.

“We’re seeing smaller fleets, in particular, are increasing benefits the most,” Leslie said. “They’re being driven to do more in that area to stay competitive with larger fleets that have traditionally been at the forefront of offering healthcare, dental and 401(k) plans.”

At Estes, Richardson said he views the persistently soft freight market as an opportunity to test whether the company’s business strategies remain effective across economic cycles.

“From my perspective, strong strategies to reduce dwell time, improve network connectivity and ultimately standardize driver utilization are not simply a strategy for a softening market environment,” he said. “The softening market should instead test that your business strategies remain nimble through any economic environment.”

Improved transparency helps fleets use labor more efficiently and maintain service levels, even as capacity shifts with market conditions.

“We’re now getting instantaneous information as soon as a shipment is picked up, which allows us to constantly balance inbound and outbound freight with the schedules we need to create across the network,” Richardson said.

He said the expanded use of operations technology has helped Estes move from having a largely reactive planning model to real-time network management, allowing the company to deploy drivers more precisely, reduce transit times and maintain consistent service. By expanding terminals and breaking freight movement into smaller, more manageable segments, he said the carrier has been able to better match labor resources with demand.

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Leslie

ATRI’s Leslie said the data does not yet point to a near-term turnaround in the freight market, nor does it point to a breakdown in driver pay. While capacity continues to exit the market, the pace has been slower than many expected. Overall driver employment has remained relatively stable.

“There’s really nothing on the horizon right now that would trigger a freight market flip,” he said. “We’re not seeing major increases in housing or manufacturing, and while consumer sentiment has weakened, consumer spending over the past few years hasn’t collapsed.”

For drivers, that means the current environment is likely to remain one of stability rather than growth, Leslie said.

Wages have not been clawed back, miles per truck have held up and fleets have increasingly leaned on benefits, guaranteed pay and operational efficiency to maintain earnings in a prolonged downturn.

The challenge ahead, he said, will be sustaining those strategies if the freight recession continues.