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Driver pay increases likely to be carriers’ biggest ‘cost pressure’ in 2018

Speaking as part of the analysis firm’s “State of Freight” series of webinars, FTR Transportation Intelligence Vice President of Research Avery Vise outlined a series of marketplace conditions that point to market pressure to increase driver wages.

The spot freight market began to turn toward the positive in terms of rate growth about a year ago, Vise noted, and contract rates paid by shippers to carriers “then began to creep higher as well.” As rates have heated further into the first week of this year with a variety of records broken in transaction data tracked by load boards, “overall trucking conditions are improving,” he says.

Evidence of some ballooning sign-on bonuses have been seen, and rising driver wages Vise dubbed perhaps the most significant “cost pressure” for motor carriers, given continued expectation of growth in pay.

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With the potential of mandated ELDs to push longtime drivers from the business into other sectors and compound the situation as a backdrop, this is the “strongest labor market in two decades, at least in terms of unemployment,” Vise said. “Trades that compete with trucking,” such as manufacturing and construction, “are doing well, at least compared to recent levels.” Both manufacturing and construction are in fact growing nationally but experiencing bigger surges in construction markets in hurricane-affected regions like Florida and Texas.

And while “estimates vary widely,” he added, “it’s clear the tax reform act will be stimulative of trucking activity to a degree.”

Tax reform, with its dramatic cuts in corporate tax rates, too, will drivers plenty of reason to expect some windfall themselves. “We are seeing pressure for wage increases,” Vise said, with “bonuses at unprecedented levels for teams and other drivers.”

While fleet executives don’t make decisions overnight, truckers may be in the pay-boost driver’s seat, considering all these dynamics. Buzz around tax reform has seen “some major players in retail announce increases” in their company minimum wages and other pay. “I’d expect drivers will say, ‘wait a minute, what about us? … OK, corporate America, this is what you asked for. Now it’s time to give back.'”

The corporate tax cut does, Vise added, deliver “real money, so it’s a real opportunity.”

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Todd Dills is Senior Editor of Overdrive magazine and writes from Nashville, Tenn. He frequently covers business, regulatory and lifestyle topics for the magazine and at His work on the “CSA’s Data Trail” series in Overdrive about the federal CSA program was awarded the highest honor in trade journalism – the “Grand Neal” – by American Business Media at the 2014 Jesse H. Neal Awards. Dills’ Channel 19 blog covers a grab bag of on-highway hearsay, owner-operator news and driver views from the roadways the nation over. His work in trucking journalism builds on a background of news feature, fiction and other creative writing and editing. Find him here at the Channel 19 blog and via his Twitter feed, or send tips to or via phone at 205-907-2481.