Paying Up

“I’m home every weekend, and they say that makes up for the pay raise.”

– Ken Albritton

During the first two weeks of January, Gary Kelley, director of recruiting for U.S. Xpress, says his phone rang off the hook. The callers were owner-operators and company drivers curious about the fleet’s new raises, as much as 5 cents per mile for some of the company’s contractors.

“Any time a fleet our size makes a significant pay change, it generates lots of interest,” Kelley says. “We’ve been fielding 25 to 30 percent more phone calls.”

The story was similar across the country as owner-operators responded to large carriers’ pay hikes to compensate drivers for anticipated lost productivity under the new hours-of-service rule. The rule, which restricts drivers to only 14 hours of work before 10 consecutive hours off, forces drivers to log loading delays as on-duty time. Carriers and truckers say that could reduce productivity by as much as 30 percent and severely impact the number of miles a trucker can drive. In the months leading up to the rule’s implementation Jan. 4, many carriers raised mileage rates and accessorial pay to make up for expected losses.

“Drivers are really tuned into this issue,” says Tom Kretsinger, executive vice president for American Central Transport. “Our recruiting department is getting a lot of calls.”

ACT isn’t getting calls just because of its penny-a-mile raise and new stoppage and detention pay. Kretsinger says drivers are concerned about the miles they’re getting with their current company, with delays at shippers and where they’re being stranded under the rule’s 34-hour restart.

CFI President Herb Schmidt says his company has received a lot of inquiries, too. Drivers are calling, however, because the pay increase is the biggest in the company’s history – as much as 6 cents a mile for some drivers, he says. “They’re talking about a real-life decrease in productivity that affects their wallets – their decreased ability to run real miles,” Schmidt says.

That’s a big issue for Mississippi trucker Ken Albritton, who drives for Georgia Pacific. “I sat over the other day for four hours, but I didn’t get the detention pay because I’m dedicated,” Albritton says. “I’m home every weekend, and they say that makes up for the pay raise.”

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Cleveland trucker Patrick Motley, who drives for Qwest, says he’s gotten no pay raise, “and I’m driving fewer miles.”

Drivers working for companies that aren’t raising rates are following the money to other fleets, says Keith Locklin of Alabama, who has stuck with his carrier. “I know a lot of guys have already left the company to get more money somewhere else,” says Locklin, who is losing about a load a week to the new rule’s work limitations.

Carriers who improve pay and keep miles up are going to receive a big share of drivers, says Bob Costello, economist for the American Trucking Associations. He says average truckload driver turnover was up in the third quarter of 2003 to 119 percent – the highest percent ATA has ever tracked for a quarter – and that preceded carriers’ year-end compensation hike announcements that could push turnover even higher in the fourth and first quarters.

Costello says hours of service changes and new raises will drive some truckers to consider better offers. “Those companies that are the leaders in this area will get a swell of applicants,” Costello says. “Companies that have a hard time dealing with the rule and getting drivers the miles they had before are going to face an increasing turnover rate.”

Other factors influence driver turnover, too. Home time, benefits and shipper abuse remain important issues after the rule change, says Kevin Burch, president of Jet Express and co-chair of the Labor/Human Relations Committee of the Truckload Carriers Association. “The fact that drivers don’t want to spend the extra time on the road and not get paid for it is influencing their decisions,” he says.

Likewise, home time is a bigger issue than pay for some drivers. Larry Dennis, director of recruiting for Landair Transport, an 800-plus truck carrier that hasn’t raised its rates, says some companies, such as his, are simply able to offer more miles and better conditions.

“We’re a Northeast, regional carrier with a small freight footprint,” Dennis says. “If we hire folks that live in that footprint, we have the ability to get folks home on weekends.” The company is emphasizing that advantage in its new advertising campaign, which features a photo of a driver sitting in a truck stop pouring over his log book and another photo of a guy fishing with his son. The ad asks, “Where do you want to restart your logbook?”

Carriers that are raising their pay are “burning up all their drivers’ driving time at the loading dock and have to raise pay to compensate for lost time,” Dennis says. But drivers at Landair, half of whom are owner-operators, are averaging more than 3,000 miles a week. “We expect to be able to grow our fleet as a result of other carriers’ inability to get the miles,” Dennis says.

More home time is a strategy that’s being mirrored by some bigger fleets, such as U.S. Xpress, which has increased the number of shorter routes. “The rate of turnover for both drivers and owner-operators has decreased,” Kelley says. “We’ve emphasized home time a lot more in the last six months and that’s making a real positive difference.”

Contractors at smaller fleets, where per-mile pay is often lower than at large fleets, may have stronger than normal temptation to leave, given the size of some big-fleet offers. But David Owen, president of the National Association of Small Trucking Companies, says he doesn’t think turnover at small carriers will be affected.

“We find that the only reason why there are small carriers is because they do a better job of finding and retaining drivers,” Owen says. “Turnover rates of small carriers are two to three times smaller than big carriers even though the pay is not as high. Drivers may get as much as a dime per mile lower than what they’d get at larger carriers, but the small carrier will get him out on Sunday and get him home in time for the local football game on Friday night.”

Still, the greener pasture of higher pay is attractive to many drivers, especially those worried about whether they’ll make as much as they did in 2003. Yet since changing carriers can be expensive in terms of down time, travel expense and other costs, it’s not always the best thing to do. “My advice,” Kelley says, “is stick it out where you are if your mileage rate is high enough to make you happy.”