Retention rates on the rise for US transporter that increased driver wages in August.
US trucking titan Swift Transportation’s decision to boost the pay packets of its drivers has delivered immediate results for the company.
Swift president Richard Stocking says the number of company trucks on the road has increased, the transporter is experiencing record recruiting weeks and driver feedback has been positive since wage increases took effect in August.
Swift decided to increase wages after a rising driver turnover rate hampered its second-quarter earnings.
In announcing its third quarter results, the company told investors the turnover rate improved more than 16 per cent compared to the second quarter and now sits below the industry average.
“We are pleased with the results we have seen thus far but remain hyper vigilant on this front. We need to ensure we continue to provide our drivers with a better quality of life,” Stocking says.
He adds that Swift expects drivers to receive another pay increase in 2015.
“We recognise the importance to stay ahead of this curve on these initiatives to fuel additional growth,” Stocking says.
The company is also focusing on giving drivers more time at home.
Swift reported a net profit of $50.1 million for the three months to the end of September, up from $40.1 million in the previous quarter.
Swift founder and CEO Jerry Moyes says the pay increases should have been introduced earlier this year.
“We have done a very good job of getting bum[s] in the seats over the last couple of months. This pay increase, we probably should’ve started it six months earlier, but it is what it is,” he says.
“We will continue to monitor closely the driver environment and we’ll take the necessary actions to ensure that we’re giving them the best overall driving experience and compensation. Drivers are the key to our success.”
Stocking says Swift has been working with its customers to secure rate increases to help cover the cost of paying drivers more.
Swift Transportation is not alone in grappling with a high driver turnover rate.
The American Trucking Associations (ATA) says the turnover rate for large trucking firms increased to 92 per cent in the first quarter of 2014 and that there is currently a shortage of about 30,000 to 35,000 truck drivers.