Trucking executives may get the driver shortage they fear unless they reverse wage trends in the industry, an investment research firm warned today.
Truck driver pay dropped 6.6 percent from late 2008 through the first quarter of 2010, and continued to decline in April, according to Morgan Stanley Research.
That's twice the decline in pay truck drivers suffered during the 2001-2003 downturn, according to Morgan Stanley's Truckload Wage Index.
The research firm index is based in part on data from the Bureau of Labor Statistics and the National Survey of Driver Wages published by the National Transportation Institute.
The index shows truckload driver pay dropping to 2004 levels in recent months. Driver pay now lags the consumer price index by almost 10 percent, said Morgan Stanley.
In April, the gap between wages and salaries for all private industry workers and truckers widened to almost 20 percentage points, according to the Truckload Wage Index.
The survey shows driver pay falling even as trucking companies report surging freight demand and concerns over a potential shortage of truck drivers later this year.
Transportation analysts called "aggressive" driver pay reductions "counterintuitive," suggesting they may be responsible for the "shortage" some carriers are experiencing.
"It's possible that reduced driver pay has actually caused some drivers to remain on unemployment for now," said William J. Greene and Adam Longson.
"This is good for truckload cost control, but is unsustainable as employment levels normalize," the Morgan Stanley analysts said in a May 19 note to investors.
Driver shortages that tighten capacity may be "good for pricing," but hefty pay increases could cut into profit margins, offsetting pricing gains, Greene and Longson said.
"Driver pay reductions usually result in a substantial driver payback as the economy recovers," they said. "Given the larger reductions this cycle, the required driver pay increases could outpace those of 2003-2006."
Driver pay shot up by as much as 12 percent in that period, they said.
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