Data released by the American Trucking Association shows two very interesting trends. While driver compensation continues to rise, the overall demand for freight transportation services has also risen.
The reason these trends are occurring at the same time is that freight transporters are fighting among themselves over a limited pool of truckers. Simple supply and demand: When the supply is limited and the demand increases or stays constant the compensation should be higher. That's exactly what we see.
The increase in trucker compensation is being attributed to a more competitive market that's fighting to keep qualified drivers. Bob Costello, Chief Economist from the American Trucking Association, says the latest survey that polled over 100,000 truckers shows the impact a tight market can have on competitive compensation.
Besides better compensation, a more competitive market has meant more benefits and other perks for truckers. All of the incentives are there for freight transporters to offer further benefits and other perks to recruit experienced truckers.
Newly recruited truckers could expect to take home $53,000. That's $7,000 more than they would have taken home last year, according to the American Trucking Associations Driver Compensation Study from the previous year.
The increase in driver compensation from 2013 has been even more dramatic since compensation has risen 15% through the years. Private fleet drivers have done even better since they saw their pay rise 18% from $73,000 a few years back to $86,000 in the most recent Driver Compensation Study undertaken by the American Trucking Associations.
In response to a high demand and the limited supply of experienced drivers, transporters have started offering signing bonuses and benefits aimed at recruiting and maintaining top talent. It's one thing to attract drivers with the promise of a big signing bonus, but it's another to keep drivers satisfied for the long term.
American Trucking Associations Chief Economist Bob Costello said that qualified drivers could expect thousands of dollars in their signing bonus to transporters in desperate need of their services. To keep drivers, transporters are providing perks like health insurance, retirement plans, and paid leave.
Fleets are responding just as the law of supply and demand dictates they should: Offering a limited amount of qualified drivers better pay and more benefits is completely rational. And great news for truckers. Experts say that the trend should continue as long as the economy continues to expand.
