By John Gallagher of FreightWaves
Recent data from the American Trucking Associations found that the average truckload driver made over $69,000 including salary and bonuses in 2021 — an 18% increase from 2019.
At the same time, however, driver compensation — that is, a lack of it — ranked as the No. 1 issue among company drivers and third among all drivers, according to the latest annual survey released in October by the American Transportation Research Institute, which works closely with ATA.
Drivers also ranked detention/delay at customer facilities among their top concerns. The U.S. Department of Transportation estimated in 2018 that time lost waiting to pick up and drop off freight costs commercial truck drivers over $1 billion in annual pay.
Many of those drivers believe that the best way to address both issues is for the government to step in and require that trucking companies pay their drivers overtime.
“The big guys get away with cheap labor because they don’t want to pay overtime. The big box shippers get away with detaining drivers because nobody charges them. The big carriers don’t charge the shippers because they don’t want to lose the freight,” Lewie Pugh, executive vice president for the Owner-Operator Independent Trucking Association, told FreightWaves.
“We spent years trying to figure out how to get people’s attention on this, and with trucking being so diverse — what you haul might take 15 minutes, what I haul might take four hours — we decided the simplest thing is to remove an exemption from the Fair Labor Standards Act (FLSA) so that truckers could get paid overtime. Right now, they’re working 70 hours a week or more.”
Overtime pay legislation pending
OOIDA is a principal backer of the Guaranteeing Overtime for Truckers Act, legislation introduced in the House in April and in the Senate in September that would repeal the motor carrier exemption in the FLSA that excludes company drivers from overtime protections. Pugh estimates that roughly 10-15% of OOIDA’s membership consists of company drivers.
“If this legislation were to pass, the big carriers would be able to pressure shippers and receivers to load their drivers who are on the clock sitting at the loading dock,” Pugh said. “And raising driver pay will raise the rates, which will have a downstream economic effect whereby the smaller owner-operators will be able to raise their rates as well.”
A third-party logistics executive also sees benefits to providing overtime to truckers. “While this wouldn’t help us directly, we care about the drivers we use and whatever affects them positively would affect us,” Dimitre Kirilov, president of consumer services at Montway Auto Transport, a Chicago-based 3PL, told FreightWaves. “Transportation touches everything — we all pay the bill at the end of the day.”
OOIDA and other backers of the legislation seem to have firm support from the Biden administration. Repealing the trucking industry’s FLSA exemption was highlighted in the U.S. Department of Transportation’s supply chain vulnerability report released in February.
DOT Secretary Pete Buttigieg himself said that driver recruitment should not become a “leaky bucket” if new drivers end up leaving due to a pay gap with other industries. “Rather, we make sure that the working conditions and the compensation reflect the fact that those jobs are absolutely essential,” he said.
And the Federal Motor Carrier Safety Administration recently contracted a study with the Transportation Research Board, as required by the infrastructure law passed last year, on how various methods of driver pay — including getting paid by the hour — affects safety and driver retention.
Opposition to overtime pay is fierce
But getting the legislation passed will be an uphill battle. ATA is actively lobbying against the bills, arguing, among other things, that mandating overtime would require the industry to revamp compensation models that have been in place for decades but “likely resulting in no net change in the total compensation to truck drivers,” according to the group.
Instead, the threat of wage and hour litigation “will inevitably force employers to manage driver workloads with a focus on limiting liability and economic downside rather than on safety, efficiency, and levels of service for freight customers,” ATA contends. “Such a change would limit trucking capacity nationwide, drive up freight costs, slow the movement of goods, and threaten highway safety.”
Jim Mullen, who served as acting administrator at FMCSA during the Trump administration, acknowledged that driver pay remains an issue but that getting rid of the FLSA is not the way to go.
“There are some segments of the industry where drivers are being taken advantage of, and that needs to be corrected,” Mullen, now head of his own consulting firm, Mullen Consulting LLC, told FreightWaves. It’s been a problem for some time, and you would hope that the marketplace would eventually correct that.
“But as far as eliminating the exemption under the FLSA for interstate trucking, it’s a good concept in theory. In practice, it would create a rather large shift for both drivers and carriers in how they look at the labor force.”