Truck Drivers Pay

In January 2015, Forbes magazine had an article about Zappo using a Uber-like software to schedule their customer service reps. Like Uber, which changes a premium for peak ride periods, Zappo will pay its customer service reps higher wages in peak periods to improve staffing when it needs it. Here is the article: http://onforb.es/1HNk1lU. I was intrigued with this concept and wondered if it will be used in the truck transportation sector.

There has been lots of discussion about Uber drivers delivering parcels, but less discussion on long haul truckload drivers. Now it is important to note that the truckload spot market does already vary by demand. My assumption is that much of this premium rate revenue on high demand routes goes to the carrier and not to the driver.  But this setup will not last in a driver shortage market.

With driver shortages, there will be pressure on pay. Higher pay on given routes is one way to increase pay but not quite as high as across the board increases.  As with any change, truck drivers would take sometime getting use to change of variable mileage rates, but would be attracted to it, if it really means additional wage income for them. From experience, truck drivers are wary of schemes that lower their wages.  Any change must be fair, clearly beneficial to them to sell them on any wage change.  There is limited trust in the market, so that will be a limiting factor for variable wages to take hold.

On the shipper’s side, I worked for a company which placed great value on predictable costs to achieve planned revenues and profits. Its software infrastructure was designed around that value. If there are variable wages and the shipper is not willing to take the risk, it results in placing the risk on the carrier or 3PL.  Rates will need to have a risk premium, since rates billed to the company will not vary.

I do see carriers exploring this option. It may not take a majority of freight but maybe a significant portion might have variable driver wages, particularly if it can be used to resolve driver shortage situations.

 

 

654 Total Views 1 Views Today
This entry was posted in Logistics, Supply Chain, Transportation, Trucking and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *