Moyes: Expect higher trucking rates

Moyes: Expect higher trucking rates    After years of a buyer’s market in which shippers enjoyed low rates, trucking companies are now insisting they be paid fairly, a top trucking executive said this week.
   Labor is one of many costs that have risen dramatically for motor carriers this year. Fuel costs have also skyrocketed and insurance remains expensive.
   “Our industry has been beaten up the last 10 years. Now that has changed. Our industry has to be paid more for the services being provided,” said Jerry Moyes, chairman and chief executive of Swift Transportation Co., in San Antonio.
   The shortage of drivers in the truckload industry will force companies to raise wages by 30 percent in the next two years in an effort to attract and retain qualified employees, Moyes said.
   In the past year driver wages have risen 12 to 15 percent and the upward trend will continue, Moyes said. He gave the keynote address at the joint annual conference of the National Industrial Transportation League, the Transportation Intermediaries Association and the Intermodal Association of North America.
   The average wage for a truckload driver is $45,000 to $50,000 compared with a private fleet average of $72,000. Truckload carriers are experiencing a stunning 116 percent turnover rate, while private carriers only have to replace 4 percent of their driver pool each year, he said.
   Heartland Express, a very profitable long-haul carrier based in Coralville, Iowa, recently increased its compensation rate to 50 cents per mile. In the last several years within the industry, drivers typically have been paid in the low-to-mid 30 cent-per-mile range, depending on experience.
   Despite the booming demand among shippers for trucks to move their goods, trucking companies have remained steadfast in the past year in not noticeably increasing the size of their fleets. Swift is no exception.
   Moyes said the Phoenix-based motor carrier has only added about 3 percent capacity in the last few years. Trucking companies are holding onto their trucks much longer now rather than frequently trading them in for newer models in an effort to maintain a return on their investment, which is only 4.1 percent in the dry van industry and 3.5 percent in the reefer industry.
   “Today you can buy tax-free municipal bonds for 4.5 percent. Why would anybody want to invest in our industry,” he said.
   One private fleet trucking executive said Moyes was painting a worst-case scenario.
   Moyes said a new focus for Swift is intermodal transportation, a line of business in which companies like J.B. Hunt and Schneider National have experienced strong growth.
   “All of our customers are major intermodal shippers. This is our big growth opportunity,” he said.