US transport firm says paying its drivers more helps improve company performance.
US trucking firm Swift Transportation has handed out another round of wage increases to its drivers in a bid to build upon the positive results generated in the first quarter of 2015.
It raised the pay packets of its employee drivers and contractors on May 1, following similar actions it took last year as part of a broader driver retention strategy.
Swift late last month announced revenue growth of almost 10 per cent for the quarter, in part due to its ability to grow the size of its fleet despite an industry-wide driver shortage.
“Improvements in both driver retention and recruiting have enabled this growth and were made possible by the ongoing effects of the various driver-friendly initiatives we implemented in 2014,” a statement from Swift says.
“In order to ensure continued progress on this front, we have announced plans to enact a material, targeted wage increase for drivers and pay increase for owner-operators on May 1.”
Swift has not detailed how much employee wages and contractor payments have risen by, but says the increases will result in better returns for the company.
“This will have a short-term effect on the second quarter earnings, but we believe the investment in our drivers will yield returns over the long run through improved operational metrics,” it says.
Swift adds that it will work with its customers to secure rate increases to offset the higher wages.
“Salaries, wages and benefits increased $32.2 million to $261.7 million during the first quarter of 2015, compared to $229.4 million for the first quarter of 2014 due primarily to increases in total miles driven by the company drivers within the period and driver pay rate increases,” it says.
It was in July last year Swift decided to focus more on driver recruitment and retention after a high turnover rate and shortages took a $10 million chunk out of its bottom line.
“After assessing the current and expected environment, we believe the best investment we can make at this time, for all of our stakeholders, is in our drivers,” Swift said at the time.
“Our goal is to clear the path for our drivers by helping them overcome challenges, eliminate wait times and take home more money. We believe we can accomplish this through improved productivity and enhanced pay packages.”
Swift began to see immediate results from pay increases, announcing in November 2014 that the number of company trucks on the road had increased, recruitment levels had reached a record high and feedback from drivers was positive.
The American Trucking Associations (ATA) estimates there is a shortage of up to 35,000 drivers in the US.