A survey from the American Trucking Association showed that driver salaries rose 11% last year.
The salary jump came as companies scrambled to hire additional workers for increasing shipping needs brought about by the pandemic. Trucking companies struggled to find enough workers and offered increased wages, bonuses, and benefits as incentives.
Walmart, for example, announced earlier this year that the starting pay for company drivers could be up to $110,000 a year.
Most trucking companies offered referral bonuses to their employees. If employees helped the company find a new hire, they could receive a bonus of $1,000.
Why it’s news
But the higher wages don’t come without a price. Shipping costs are on the rise as companies have to make up for extra money spent on wages.
Old Dominion Freight Line Inc. reported that its spending on salaries, wages, and benefits had grown by 20%.
As shipping demands calm down, the hiring pace at trucking companies is calming down as well. The Cass Freight Index, which reports the number of shipments across North America, declined in May and June.
Backing up a bit
High inflation and continued strong demand for goods in the U.S. has taxed the transportation system, and truck shipping isn’t the only method of transportation getting more expensive. Costs for container shipping are growing as well.
Eleven container lines are expected to reach $256 billion in profits—$36 billion higher than estimated.
Blue Alpha Capital founder John McCown explained that the jump in profit is due to higher contract rates from the shipping companies.
This year the average shipping contract rate is expected to be $1,900 for a 40-foot container.
Unlike many other industries struggling to recover from the pandemic, the shipping industry became a financial success. Even with many economies slowing and shipping difficulties in Russia and Ukraine, the shipping industry’s profits haven’t been greatly reduced.