The truck-driver shortage in America has dominated headlines in the logistics space this year.
While trucking companies are offering five-digit bonuses and record-high pay raises, the problem has not dissipated.
Roadmaster Group CEO John Wilbur said the real reason behind the shortage is not how much drivers are paid but how they are paid.
Truck drivers are generally paid by how many miles they drive, which means they must carry the burden of many external factors such as weather and traffic, Wilbur said.
It’s no secret that America has a massive shortage of truck drivers.
More than 50,000 more truckers are needed to support the shipping demand from US companies, like retail giants such as Amazon and Walmart, and that deficit could grow to 175,000 by 2026, according to the American Trucking Associations.
While trucking companies are offering five-digit bonuses and record-high pay raises, many are still complaining their wage hike hasn’t helped attract new drivers.
“It’s not so much how much the drivers are paid, but how they are paid,” John Wilbur, CEO of Roadmaster Group, an Arizona-based specialized transportation company, told Business Insider.
According to Wilbur, truck drivers are generally paid by how many miles they drive, which means they must carry the burden of many external factors such as weather and traffic. This pay model adds many volatilities to drivers’ compensation.
“That is the single biggest systemic flaw in the industry,” Wilbur added. “It creates issues in this industry about finding and keeping drivers in the system.”
Generally, being a truck driver is a difficult job, with drivers away from home for weeks at a time while living in a truck on the road. Wilbur says drivers usually hop from one company to another because they feel they are neither respected nor compensated appropriately.
According to data from the American Trucking Associations, the annualized turnover rate, which measures how often a driver leaves a large truckload carrier, or fleet with more than $US30 million in annual revenue, was 96% in the first half of the year, putting 2018 on pace to have the highest annual rate since 2013.
To attract more drivers, Wilbur’s Roadmaster Group has been using a salary-like pay structure since 2012, guaranteeing the minimum wage a driver will make in a day or a week.
But the mile-based pay model is not the only hindrance that pulls drivers out of the trucking industry. Since December 2017, the trucking industry has implemented an electronic-logging-device mandate that limits drivers to 11 hours of driving in a 14-hour window.
Many truck drivers have stated that they hate the ELD mandate because their salaries are taking a hit, their independence is being curtailed, and they can’t find places to park and sleep.