Truck driver pay must rise between 15 and 25 percent if the trucking industry is going to keep up with freight demand in coming years, a truckload executive said yesterday.
Difficulty hiring and keeping drivers is the main roadblock to trucking growth, Kevin Knight, chairman and CEO of Knight Transportation, said in an earnings conference call.
“Our goal is to basically get our driver pay up fairly significantly over the next three to five years, especially as we are provided the opportunity to improve our yield and our rates,” Knight said. Difficulty hiring drivers is a limiting factor “for our entire industry,” he said.
Knight — a $969 million company and the 12th largest U.S. truckload carrier — is raising driver bonuses and base pay this year, he said. Overall, salaries, wages and benefits at Knight rose 5.3 percent year-over-year in the first quarter, by more than $3 million.
“We are very aggressively taking a large portion of what we’re able to receive in terms of rates and making sure that we give that to our driving associates,” Knight said. “Our goal is to continue beyond this path over the next two to three years to make sure that we’re competitive as far as what the job should pay and also as compared to other industries.”
A complete transcript of Knight’s comments is available from Seeking Alpha. Knight voiced what many trucking executives and analysts are already thinking. “We need to be paying our driver $60,000 to $70,000 a year, and that’s with a flat construction industry,” said Mike Regan, chief of relationship development at freight payment firm TranzAct Technologies. To get there, “you’re talking a net increase of 10 to 15 percent in rates” over a couple of years, he said.