If the above graph looks familiar, you may have read Overdrive‘s recent analysis of economists’ forecasts of a “driver shortage.” Part of that analysis was a similar look at driver pay and owner-operator income long-term. This graph, from an FTR Transportation Intelligence online seminar, charts the growth of company-driver and manufacturing-employee wages and inflation of the consumer price index. As FTR’s Noel Perry put it, “what cost a buck in 2000 now costs $1.38.”
Pay for manufacturing workers, with whom carriers are traditionally considered to compete for workers (along with those in the construction industries), Perry noted, “has exceeded consumer inflation. The trucker, however, has not been nearly as fortunate,” as growth in pay has lagged below inflation through much of the time period since the year 2000. (Overdrive‘s recent analysis went back to 2005.)
The chart, Perry said, “helps explain one of the reasons it’s hard to recruit drivers – we’re still not paying them very much.”
Though 2014 and ’15 showed a better trend, with pay rising fairly sharply for company drivers and independents alike, there’s evidence from carrier surveys that such increases have now lulled. Lower freight volume expectations indicate increases in driver pay will be limited in 2016, according to a fourth quarter survey of carriers by Transport Capital Partners. A large majority of carriers surveyed (70 percent) said they expect wage increases of only 1 to 5 percent, while 22 percent of carriers expect to see no wage increases at all.
But FTR’s Perry also offered forecasts relative to what leverage he expected in both contract and spot rate negotiations through the year, and predicted a measure of growth in truckload freight throughout 2016 on par if not slightly better than 2015, on average. His thoughts on each of the following charts are included below each image.