Dive Brief:

• Schneider has upped its pay for drivers, giving new team drivers with at least one year of experience an increase of 4 cents per mile, the carrier said in a recent blog post. Drivers with less than a year of driving experience will get a 2-cent increase, when starting with Schneider.
• The scramble to attract drivers has led to higher advertising costs to garner driver applications, said Jacob Kramer, vice president of recruiting for U.S. Xpress. To draw an application in the past usually meant less than $25 in spending, per application, Kramer said. Now, with trucking companies spending more on ad buys, and with more ads trying to grab a driver's attention, that number is between $75 to $100 per application, said Kramer.
• The Schneider announcement comes as U.S. Xpress forecasted Wednesday that driver turnover, driver shortages and a slowdown in training new drivers could cause a net loss of 200,000 drivers in 2020. To counteract this, U.S. Xpress said it suspects "that this circumstance will result in a driver wage increase this year — potentially as high as 15%."

Dive Insight:

Truck drivers are in a drivers' market, as evidenced by Schneider's move. It will pay new team drivers up to 61 cents per mile, according to the company. Schneider said it was motivated to make the change because "the coronavirus pandemic has changed how many shippers think about their supply chains, and many shippers who rely on time-sensitive service or have high-value freight now realize the importance of having professional, safe team drivers."

One reason for the urgency is the low inventory levels that have shippers demanding more freight. On top of that, many drivers laid off when COVID-19 caused parts of the economy to shut down have been harder to attract back than expected, said Todd Tranausky, FTR vice president of rail and intermodal.

Some drivers fear the pandemic has not fully subsided, and they are concerned about the coronavirus. "The risk is too high," said Tranausky.

Other causes for increased driver demand is drug testing, which is accelerating the problem, according to U.S. Xpress, which released its September forecast for the rest of the year Friday.

"As the economy slowly recovers, freight volumes will rise and drivers will become an increasingly precious commodity," the U.S. Xpress report reads. "In recent months, the industry has seen significant increases in driver turnover, which is exacerbated by lower CDL school enrollment and the recently launched Drug and Alcohol Clearinghouse."

The Drug and Alcohol Clearinghouse, kicked off in January, makes it easier for employers to instantly check if a driver can operate a commercial truck.

Carriers can attract more qualified drivers by easing the paperwork, online and otherwise, to get a driver into an interview and through the hiring process, Kramer said.

"We're making it unbelievably easy to do business with us, as a driver," said Kramer. "Everything is being flipped on its head."

U.S. Xpress has made interviewers available around the clock, Kramer said, because truck drivers are usually on the road, unable to interview between 9 a.m. and 5 p.m.

Schneider's pay boost comes after some industry experts predicted that truckload carriers would have to attract more drivers to meet demand and ease capacity constraints. Max Farrell, CEO of WorkHound, told Transport Dive earlier this month that fleets would soon move to grow their ranks, as the market demands more freight hauling.

"I would be shocked if there weren't pay increases announced in Q4," Farrell said earlier this month. "[Fleets] are trying to figure out how they can get a competitive advantage in pay."