Commentary: It’s Time to Think About Hourly Pay
Deborah Lockridge
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Deborah Lockridge
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When Charles “Shorty” Whittington was chairman of the American Trucking Associations a decade ago, the founder of Grammar Industries called for the industry to look at paying drivers by the hour, he recalled last month during a panel discussion at the ATA’s annual Management Conference & Exhibition. “And I was about tarred and feathered.” Trucking companies told him to do so would be “business suicide.”
But things are changing.
Seriously evaluating how we pay drivers is something trucking needs to do as the industry faces its worst shortage of drivers since ATA first started keeping numbers. The shortage is projected to hit 50,000 by the end of the year. One Northeast fleet manager I talked to said he’s 15-18% short of where he needs to be on drivers.
Grammer Industries is one of a number of fleets — many in the tanker and bulk business — who have been quietly experimenting with hourly pay. Some of Whittington’s friends in the industry who have done so, he says, have seen their driver turnover drop to 20%.
Admitting that getting customers to accept the rates they’ll need to pay in order to make that happen is just one challenge in making this transition, he said, “but I think this industry has done a terrible job in communicating with the shippers.”
With the upcoming electronic logging device mandate, however, many in the industry have agreed that this kind of communication is going to be vital. And it also could mean that moving to hourly pay would make sense, at least in some situations.
It’s understandable how the mileage rate became the standard and accepted pay structure for the industry. With drivers out on the road for days and even weeks at a time, with no way to know much of anything about what they were doing …Read the rest of this story
