Showing the love

Recently, I have been over in the USA and one figure which shocked me when I heard it was concerning driver turnover. We were talking to Brad Pinchuk, who is President of Hirschbach, a serious refrigerated transport company based in the far West of Illinois. The 600 strong fleet runs a very smart operation with the latest gear, mainly International ProStar with a smaller proportion of Freightliner Cascadia thrown in.

 

He was talking about driver retention and saying how improved working conditions meant this was getting better. He was proud driver turnover was improving, from 80 per cent towards 70 per cent. He was talking about three quarters of all their driver leaving each year. We think we have it bad!

 

Digging further, and after a lot of talk about improving working conditions and getting drivers home every two or three weeks, the average wage of a driver in the fleet turns out to be $40,000 per annum. Now, 40 grand will get you more in the US than it would in Australia, but is this not the heart of the matter?

 

The median wage in the US economy is $48,872, 20 per cent above the average paid to the drivers at Hirschbach. Brad admitted wages were too low and the company is looking at a substantial wage rise to try and increase driver retention. I am guessing it would still be no more than 20 per cent, bringing their drivers up to the median.

 

Retailing giant Walmart has bitten the bullet on drivers pay to try and improve the situation. Drivers in the fleet average over $76,000 a year, a much better sounding salary. The company employs 7,200 drivers and you can imagine the amount of effort handling a turnover up over 50 per cent of drivers would cost the enterprise.

 

Walmart’s turnover is dropping and smart companies, like Hirschbach, are following suit as far as they can. The issue is paying for it. For the major retailing network, generating the revenue to pay the wages comes from all the way along the supply chain, from the factory gate to the consumers’ shopping trolley.

 

Hirschbach, and hundreds of other fleets trying to do the right thing, only make profit on one small part of that chain. They are struggling to find a way of getting better rates to fund decent wages. The trouble is one we understand in Australia. Up the rates and some smaller ambitious mob come in with an undercutting rate and grab the work. The devil and the deep blue sea.

 

A solution, if there is one, is hinted at on the driver recruiting page on the Walmart website. It talks about no hand loading or unloading, excellent equipment, maintenance, uniforms and pay.

 

This is a good start, but there is something just a little bit simplistic about it. Drivers want more, they want to be treated with respect, to have their efforts recognised and be rewarded as such. The fleet which makes its drivers feel loved and respected is the one where the turnover is lowest.

The eight minute rule Toll better than expected

Author: Tim Giles

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