Transportation secretary says raising truckers’ pay is key to supply chain betterment

What is the root cause of the supply chain failures affecting the economy? What is […]

What is the root cause of the supply chain failures affecting the economy? What is the most effective solution? There are no single answers to such questions, nor will there be a silver bullet that leads to a course correction. But that hasn’t prevented stakeholders from offering up some suggestions of what corrective action may yield the best results.

One such suggestion is dramatically increasing how much truckers are paid. Since the driver shortage is so large — and the supply chain’s health is so dependent on trucking services — supporters of the move believe raising pay may be the linchpin to getting the supply chain moving smoothly once again.

A staunch advocate for raising wages is former presidential candidate and Indiana mayor Pete Buttigieg. Now leading the Department of Transportation, Secretary Buttigieg told attendees of the Transportation Research Board at its annual meeting that what will best encourage Americans to go for their commercial drivers licenses is paying them what they deserve.

“Industry estimates that there’s a gap of about 80,000 truck drivers right now relative to what we need, Buttigieg said, as reported by FreightWaves. That number is what the American Trucking Associations believes is necessary to adequately address demand.

Buttigieg further stated that increasing truckers’ wages will help with retention, which is another issue facing the industry. In other words, once truckers enter the profession, history has shown that they don’t stay. This is why motor carriers need to increase drivers’ salaries; it disincentivizes truckers to retire early or seek out other opportunities.

“So we have to make sure that not only are we recruiting people into the field but that it’s not a leaky bucket,” Buttigieg added. “Rather, we make sure that the working conditions and the compensation reflect the fact that those jobs are absolutely essential.”

Is raising truckers’ pay the grease that will smooth out the supply chain?

What makes truckers vital to the supply chain?
Truck drivers are extraordinarily important to the health and success of the supply chain, especially when it comes to the movement, unloading and distribution of containers at the nation’s shipping ports. Much like the supply chain, the problems at the ports are multidimensional, but central to their health is distribution and flow. Without enough truck drivers in place, activity grinds to a halt. Increasing the supply of drivers would presumably maximize speed and clear bottlenecks.

Raising driver pay is not a novel idea, nor is this solely a suggestion of Buttigieg’s; the Department of Transportation announced Jan. 13 that it is poised to launch a number of initiatives in the coming months that will focus on how trucking can shore up its workforce. The initiatives will also involve studies that analyze the impacts of unpaid detention time in particular on the industry as well as raising truck driver compensation.

Not everyone is aboard with the idea of sweeping compensation increases. This includes leaders of the ATA. This past summer, ATA Chief Economist Bob Costello told the Motor Carrier Safety Advisory Committee that raising pay may put employers in a difficult position economically if the economy takes a turn for the worse, FreightWaves reported. This is mainly because the profit margins are minimal due to the expenses of operation and fuel.

 


The original article can be found at: Strategic Sourceror