Truckers are getting big pay hikes, but there’s still a shortage of drivers

America’s truck driver shortage is driving pay higher. But it’s not solving the scarcity of truckers.

Massive increases in online ordering during the pandemic have sent demand for delivery truck drivers through the roof. That’s increased competition for those willing to be long-haul truckers, forcing those trucking companies to hike pay. But that hasn’t persuaded enough people to take the long-distance driving jobs that the industry needs to fill.

Huge turnover

The pay hikes are instead prompting many drivers to bounce from company to company.

The average annual turnover rate for drivers is about 95% for truckload carriers, the segment of the industry that moves trailer-size shipments long distances. Truckload carriers are experiencing the industry’s most severe driver shortages.

Drivers appreciate the increased pay, but they’re keeping an eye on what’s being offered elsewhere, said Daniel Walton, a 47-year-old truck driver at Roehl Transport, a Wisconsin-based trucking company with 2,300 drivers,

“Everybody loves getting more money,” said Walton. “You hear numbers thrown at you, there is a temptation to go elsewhere.” Recently he had one friend go to Walmart, another to FedEx (FDX), which have more regular routes and time at home for their drivers.

The opposite effect

Ironically, rising pay itself may be exacerbating the shortages it’s designed to solve. Many drivers are using the larger paychecks to cut down on their driving. “Drivers want to be home more. They have expressed that to us,” said Tim Norlin, vice president of driver employment at Roehl.

Walton said he knows drivers who are using the increased pay to cut back their time on the road.”You see guys with young children, they were out there working,” he said. “This affords them the opportunity to be home a little more with their children.”

A tough life on the road

Walton is on the road about four weeks out of every five, but after a 22-year career in the merchant marine before becoming a truck driver, he said his family is used to him being away for long stretches.

And while Walton says he enjoys life on the road, he acknowledges it’s not for everyone. He helps train new drivers at Roehl, and he’s had drivers quit soon after joining because of stress or homesickness.

Daniel Walton, a truck driver for Roehl Transport, said some of the other drivers at his company are using two recent pay increases to drive less and be at home more.

“In a truck you are alone, and it takes a fair amount of fortitude,” he said.

The greatest shortage of truckers is in the segment known as truckload carriers, which move trailer-size shipments of freight long distances. Drivers working for those companies are often on the road for weeks at a time, taking one load after another, driving the maximum hours allowed and sleeping in their trucks when they’re off.

So companies like FedEx, UPS, Amazon and Walmart that can offer more regular routes and time at home have an edge beyond pay when competing for those drivers.

Another source of competition for drivers comes from the hot construction market, where workers don’t have to be on the road.

Rising pay to stay competitive

Trucking companies are boosting pay to keep drivers on their payrolls. This week, Roehl put in place its second pay increase of this year, which together should increase driver pay at the company about $4,000 to $6,000 a year, or about 9% to 11%.

“We have to offer that addition pay to be competitive,” said Norlin..

Another truckload company, CR England, announced in April its third pay hike in the last three years, increasing its drivers’ pay by more than 50% compared to 2018.

The trucking companies are charging higher rates to customers and taking on more work when the drivers are available.

“Our customers have been very understanding that it’s necessary to raise rates,” said Norlin. “I could literally hire 500 to 1,000 more drivers – we have the business offerings from customers to keep them busy.”

Walton said that he’s seen his pay increase from about $40,000 a year a few years ago to probably $70,000 this year.

Drug tests and teenage drivers

Tanker trucks sit in front of storage silos in Sunray, Texas, U.S., on Saturday, Sept. 26, 2020. After all the trauma the U.S. oil industry has been through this year -- from production cuts to mass layoffs and a string of bankruptcies -- many producers say theyre still prioritizing output over reducing debt. Photographer: Angus Mordant/Bloomberg via Getty Images

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One factor that has reduced the supply of drivers is a new federal clearinghouse that alerts carriers to drivers who have failed drug tests, DUIs or other substance abuse problems on their records. Some 54,000 drivers have been barred from driving since the clearing house went into effect in early 2020.

“We are in favor of the clearinghouse. We do not want those people on the road,” said Bob Costello, chief economist for the American Trucking Associations.

What his group really wants, however, is a roll back of federal law prohibiting anyone younger than 21 from driving heavy trucks.

“Why are 18, 19 and 20-year olds able to drive tanks and fly planes in the military and they can’t drive trucks?” he said. The industry is concerned that those graduating high school are precluded from considering a career as a driver for three years, prompting them to seek other jobs and choking off the pipeline of potential drivers.

“If we got to them earlier, we might be able to attract more drivers to the job,” he said.

But even that change wouldn’t be enough to stem the shortfall. “There’s no one reason for the driver shortage, so there’s no one solution,” Costello said.