With the current rash of wage increases and sign-on bonuses as high as $7,000, is it possible owner-operators may finally begin to earn what they’re worth? There have always been owner- operators who earn excellent livings – many even netting six-figure salaries. According to the Overdrive Market Behavior Report, though, average owner-operator income has hovered around $42,000 for the past three years – a decent living if you’re working 40-hour weeks, which is hardly the case for most owner-operators.
Wage hikes started in earnest at the beginning of this year, but many of those increases merely made up for relatively flat wages since 2000, says Gordon Klemp, president of the National Survey of Driver Wages, which tracks driver and owner-operator pay and benefits. The top 25 percent of highest-paying carriers pulled away from the pack in the first quarter of this year, but now even the bottom 25 percent are raising pay in order to compete for drivers, Klemp says.
Is this a long-term trend or a blip driven by strong freight demand and tight capacity? Shipper panic over lack of capacity has finally given carriers the clout to charge a decent rate for their services. At the same time, demand for drivers and owner-operators is rapidly outpacing supply.
So carriers have no choice but to do whatever it takes to move freight. Which puts you in an excellent position – for now. How long it lasts will depend on whether these pay hikes are a serious attempt to solve the driver shortage or merely a Band-Aid to get us through a boom in freight. Under the current push to recruit and retain drivers and owner-operators, “carriers are exploring every possible option without fundamentally changing the work,” Klemp says.
And therein lies the heart of the issue. The work you do is tough. The hours are long. You’re away from home for weeks at a time. Until owner-operators can earn more to help make up for these realities, there will always be a shortage of the quality professionals this business needs. But even substantial pay increases will not be enough without the kind of fundamental changes in working conditions we began to see under the new hours-of-service rule.
For now, carriers have no choice but to continue to offer pay incentives. But the real solution to the driver shortage will be a combination of better compensation, shorter working hours and more home time. Hefty sign-on bonuses in conjunction with overall pay increases are a step in the right direction, but we still have a long way to go.