Easing supply chain strain: Walmart raises wages for truckers to woo more drivers
Days after truckers stood alongside President Joe Biden on the White House lawn to celebrate the administration’s efforts to address the nation’s historic 80,000 truck driver shortage, Walmart announced significant pay raises for its private fleet to “ensure Walmart remains one of the best companies in the world to drive for," and to reinforce its supply chain.
New drivers for the retailer can now make up to $110,000 in their first year with the company – nearly double the average salary of $56,491 for long haul drivers – and a significant increase over the average $87,500 private fleet drivers for the retailer previously made in their first year.
Walmart also recently launched its first “private fleet development program,” which allows participants to earn their commercial driver’s license through a 12-week program offered in Dallas and Dover, Del. Through the program, Walmart will cover the $4,000 to $5,000 cost of earning a license and connect program graduates with a “dedicated mentor to help them smoothly transition to their new role,” the retailer said.
Through this program, Walmart hopes to train between 400 and 800 new drivers this year.
According to Walmart, these “investments in pay and training build on multiple recent driver bonuses and improved schedules that enable drivers to spend more time at home.”
Truck driver wages rise to historic levels
While Walmart’s pay raise is notable for its size, it reflects a broader industry trend as companies look to shore up their supply chains as shifting shopping habits place a greater strain on transportation needs.
According to the American Trucking Associations, the average weekly earnings for long-haul truckload drivers is up more than 25% since the beginning of 2019 with the median salary for truckers working national, irregular routes at more than $53,000 and the average private fleet driver earning more than $86,000 annually.
Pay raises and better benefits could help retain drivers, but it also is contributing to transportation costs, which any CPG companies are listing as a primary driver for inflation and reason for price hikes. Conagra most recently announced additional price increases will go into effect later this year to offset higher transportation costs.
A multifaceted challenge
Still, higher salaries and training proactively addresses some factors that have led to an industry turnover rate of more than 90% -- which includes drivers taking new jobs within the field for higher pay rates, better benefits and more desirable routes. But there are other notable factors that industry, government and other stakeholders must address to stem and reverse the truck driver shortage, which if left unchecked could surpass 160,000 in 2030, according to ATA.
Other factors contributing to the shortage include insufficient infrastructure, including insufficient parking spots, which pushes some drivers to stop earlier than they might otherwise so they can get a spot for the night and contributes to congestion that impinges on drivers ability to safely and efficiently deliver goods, according to ATA.
A federally mandated minimum age of 21 to drive commercially across state lines also limits recruitment as does gender-related safety concerns which contribute to women making up only7% of all drivers – well below their representation in the total workforce, according to ATA.
The Biden-Harris Administration’s Trucking Action Plan, announced last year and touted by the White House last week, addresses many of these factors, but may not go far enough, according to the Consumer Brands Association.
CBA continues to argue for additional steps to reinforce the supply chain, including creating an air traffic control system for all ground transportation and adding more flexibility to truck weight requirements.
