View from the Edge

Best Fleets to Drive For: An Early Look at Driver Pay Stats

Best Fleets to Drive For is the only annual program dedicated to uncovering the best workplaces in the North American trucking industry. Produced by CarriersEdge, in partnership with Truckload Carriers Association, the program evaluates more than 100 nominated fleets and collects thousands of driver surveys each year. The resulting data provides a clear picture of what's working at fleets of all sizes.

The annual Best Fleets to Drive For survey and contest evaluates fleets across a range of performance criteria, identifying the companies having the most success with their drivers. The evaluation process is difficult, requiring data to be collected from all departments and surveys from a healthy number of drivers, all in a short timeframe at the busiest time of year. As a result, more than half of each year's nominated fleets don't make it through to the finals. Those that do demonstrate that they've got a strong team and the ability to communicate and collaborate effectively. Fleets that make it further – being named a Best Fleet to Drive For – have really figured out the recipe for success.

Nominations for the 2019 edition of the program closed on Halloween with a record 148 nominations, and nominated fleets are now in the process of completing their corporate questionnaires and follow-up interviews. The data collection stage continues into December, but a preliminary review of the data collected so far shows some noteworthy developments around the subject of compensation.

Compensation

Driver pay has been a regular story in the media over the past year, with many fleets making announcements about pay increases, new sign-on bonuses, and a variety of other changes. As a result, driver compensation stats from the Best Fleets participants have been eagerly anticipated. While the Best Fleets typically aren't the best paying fleets in the industry (since they provide an outstanding workplace experience across the board, they often don't need to be at the top of the pay scale to attract and retain drivers) it was expected that increased freight rates and an ongoing labor crunch would be reflected in their compensation numbers. The results so far, however, are surprising.

First, it's important to note that Best Fleets participants are not scored on driver pay. While the numbers are collected as part of each year's evaluation, that data is used only for establishing trends and year/year comparisons.

It's also important to note that Best Fleets compensation stats don't look at advertised compensation, or the specific details of individual pay packages. Instead, fleets provide the average annual income from drivers in their fleet (which includes all bonuses and performance-based incentives), and the average annual gross revenue for owner-operators. They also provide the average miles run in a year, since driver income data isn't meaningful without understanding what it took to generate that income. By looking at average annual income/gross revenue and dividing it by the number of miles run, a real-rate-per-mile can be established. While the 2019 evaluation is still in its early days, the initial findings on compensation show very different trends for company drivers and owner-operators.

For company drivers, the real-rate-per-mile is essentially flat compared to last year. Average annual income is up, but miles are also up as well, so what drivers actually make per mile hasn't changed significantly. This is an interesting finding, and will be watched closely as the remainder of the data comes in. It's possible that many of the widely advertised pay increases will need more time to show up in the numbers. It's also possible that the Best Fleets participants have not significantly increased pay in the past year (not all have mentioned increasing rates for drivers).

For owner-operators, however, the story is very different. For the independent operators, gross revenue is up and miles are down, so the real-rate-per-mile is more than 31% higher than last year's average. That's a huge increase in a year, and the evaluation process will be digging into those numbers to break down what's happening and why.

Pay Guarantees

While there's been much talk about increasing driver pay in the past year, the idea of guaranteeing that pay has been continuing to spread across the industry. Last year, the early data showed 60% of participants with some form of guarantee – whether it be a full guarantee on all work, guarantees on some lanes but not others, or a temporary guarantee during onboarding or transition. This year, the early data shows nearly 70% with a guarantee of some sort. Most of the growth in guarantees has taken the form of partial guarantee programs – guarantees that only cover certain accounts or last for fixed periods of time – indicating that most fleets adopting guarantees are starting small and ramping up their efforts slowly.

Just as noteworthy are the fleets that have taken guarantees to the next level and moved drivers to straight salary packages. It will be interesting to see how these programs are received by drivers, and how they play out over time.

An unexpected development in guaranteed pay is the emergence of some programs that appear to be guarantees in name only. A few fleets have created programs that “guarantee” drivers a certain annual income if they run a specific number of miles. However, that “guaranteed” income ends up just being the fleet's base rate times the specified number of miles. Since any driver at any fleet is “guaranteed” an income equal to the miles run times the rate per mile, these programs are more of a sales gimmick than anything else – they provide no protection against breakdowns or slow weeks, defeating the purpose of the guarantee. These programs will be watched closely, and it will be interesting to see the driver satisfaction rates at companies offering such programs.

Sharing the Success

A new question in the evaluation this year looks at the emerging trend of sharing company success among the drivers. The question asks if the company offers profit sharing, stock options, or any similar kind of program that rewards drivers for company success. Early data shows that roughly 23% of participants have some kind of program, most commonly appearing as traditional profit sharing. With more and more fleets going public, it's not surprising to see several offering stock purchase plans for their drivers, and a few privately held companies are moving towards employee ownership as well.

That level of activity certainly suggests an emerging trend, but it appears to be well under the radar at the moment. Outside of the fleets offering these programs, there's a notable lack of understanding of how these programs work, and misunderstanding about the concept in general. That suggests that fleets offering such programs will have a distinct advantage before others catch up.

These are just some of the early findings, and there are still several weeks to go before evaluations wrap up at Christmas. However, just looking at these numbers it seems that the 2019 Best Fleets to Drive For will once again offer an insightful and enlightening perspective of an industry that continues to evolve and innovate. Check back in January, when we have the complete dataset, to see what the final numbers look like.

View from the Edge is a bi-monthly review of best practices in risk management, driver development, and technology for the trucking industry, produced by CarriersEdge.

CarriersEdge provides interactive online driver training for the North American trucking industry. A comprehensive library of safety and compliance courses is supplemented with extensive content creation and customization options, full featured survey tools, detailed management reports, and the industry's first dedicated mobile app for driver training.

Other Views from the Edge