Higher Pay and Robust Fleet Solutions: A Consequence of Reform
It’s the second month of 2019, and fleets are working tirelessly to accommodate the relentless demand for service and an even greater need for drivers. Yes, the driver shortage continues to impact the industry as demand for drivers surges.
Fleets across the country are working hard to attract drivers with higher pay and more balanced work schedules. Walmart recently announced a pay raise as part of their fleet solution to attract and keep drivers. The shortage has hit Walmart hard as they face pressure to keep up with Amazon. They are hoping the pay raise of roughly $1,500, for a total salary of $87,500 a year, will help as part of a bigger strategy to not only keep up with Amazon, but surpass the digital giant.
The company announced this week that its more than 8,000 truck drivers will get around a $1,500-a-year raise. Walmart, the world’s largest retailer, hopes higher pay will help it retain those drivers and hire 900 new ones this year. — CNN Business
Along with the driver shortage, regulations remain a key concern for the industry as well. Although some regulations were put into place for the safety of the drivers, they are proving to be a double-edged sword in that they are also restricting hours for drivers who get paid by the mile.
Recently proposed changes in Washington D.C. are looking to deregulate commercial trucking policies and decrease the number of rest breaks that are mandatory under current law. While some drivers welcome the changes as a way to make more money, fleet managers are concerned about the consequences of driving too many hours while fatigued. Comprehensive fleet solutions include safety, and the ELD mandate plays a role in that plan. Unfortunately, mandatory rest periods for drivers also take a toll on the economy.
The Federal Motor Carrier Safety Administration estimates that every half hour on the road taken away from the drivers costs the industry $90 million. — Idaho Press Tribune
That said, the article also suggests that problems with decreasing the rest requirements could be addressed with digital advancements and fleet solutions that can prioritize and monitor safety. Rest requirements are not the only issues facing the industry. Trucks.com has outlined some of the industry’s most significant concerns at this time:
1. AUTOMATIC ON-BOARD RECORDING DEVICES
Enforcement of electronic logging devices (ELD) that digitally track a truck’s hours in operation hurt productivity and accounted for more than half of a 30 percent year-over-year increase in spot-shipping rates in 2018, says Mark Montague, a DAT senior pricing analyst.
The ELD mandate was approved in December 2016. Trucking fleets using automatic on-board recording devices had two years to comply. Carriers relying on paper logs to track miles driven had only until December 17, 2017. These carriers had to quickly develop a fleet solution that included a plan for a seamless transition. So far that does not seem to be the case for a considerable percentage of carriers.
2. HOURS-OF-SERVICE REFORM
The FMCSA last year hosted industry meetings that led to an announcement of proposed changes in hours-of-service rules. The agency received more than 5,200 public comments with trucking companies eager to develop fleet solutions for the proposed changes.
The recent partial shutdown of the federal government stalled progress in developing new rules, including the possible elimination of a 30-minute rest break after eight hours of driving. The FMCSA also sought ideas on how to divide the required 10-hour sleep break for long-haul drivers.
“I think there will be changes but not the dramatic changes many hope for,” says Joe Rajkovacz, director of government affairs at the Western States Trucking Association.
3. NEW MINIMUM-WAGE RULES
Most truck drivers are paid per mile driven. Twenty-one states and the District of Columbia have raised their minimum wage this year. That increases the likelihood of lawsuits targeting carriers for violations of wage and hour rules. The federal minimum wage is $7.25 an hour.
Employers with operations in different states must monitor these various state legal requirements, as well as when they change, says R. Eddie Wayland, legal counsel for the Truckload Carriers Association. These kinds of fleet solutions can be complex and lead to inefficiencies in time and money.
“That should be fairly straightforward. But it’s a lot to keep up with if you are more than a regional carrier,” Montague says. “Instead of running efficient equipment and profitable lanes, your attention is diverted.”
The minimum wage increases are likely to have other impacts on fleet solutions across the country. “Driver wages are destined to feel pressure to move up to maintain their historical advantage over minimum wage jobs,” Gordon Klemp, chief executive of the National Transportation Institute, told Trucks.com.
4. TOUGHER DRUG TESTING
Two drug-testing regulations could add to the industry’s driver shortage by screening out recreational drug users. Both have industry and government support.
Carriers will need to develop fleet solutions that include a thorough search of the Drug and Alcohol Clearinghouse by January 2020 for violations when conducting pre-employment screenings for drivers.
The current transportation funding bill calls on the FMCSA to issue rules to permit hair follicle testing in lieu of urine testing. This would happen after the Department of Health and Human Services issues guidelines.
Driver applicants currently provide urine samples, which can detect prior drug use within a few days of testing. Hair follicle testing can detect drugs for up to three months.
“Nine in 10 lifestyle drug abusers go undetected when only a urine test is relied on,” says Lane Kidd, managing director of the Trucking Alliance industry advocacy group.
So while regulations continue to impact the industry in one way or another, the good news is that they may be forcing advancements in technology, management systems, and other fleet solutions that can help in ways no one sees coming. If the driver shortage can prompt Walmart to pay almost $90K to drivers, it’s possible we may see similar results from regulation reform based on the economic benefits that follow.