Signing bonuses to bring on new drivers are soaring.
That's the conclusion of the latest report by the National Transportation Institute on driver pay. "No one likes them (bonuses), but they work in the short term, so the majority of carriers use them," the report said.
The increases tracked by NTI are enormous. The median sign-on bonus for vans surveyed by NTI were up to $7,000 in February of this year from $2,500 just a year ago. The jump for refrigerated trucks was up to $3,000 from $1,000. The jump for flatbeds was a multiple of four, to $6,000 from $1,500.
One question the study raises is whether the sign-on bonuses often get used to hire drivers who aren't planning on sticking around. "The answer is yes," the NTI report said. "They do have turnover at a higher rate than fleet averages." But they get used anyway; as the report says, it may be an element of "any port in a storm" is being accepted, and any driver who can work is worth the bonus.
The average base pay rate for the end of the fourth quarter was up, not surprisingly. The average increase for 2.9 cts per mile, though NTI did not have adequate information to post a Northeast average. The increases were 2 cts in the West, 3.2 cts in the Southeast and 2.8 cts in the Midwest. "NTI local and regional pay (information) reveals that local and regional driver pay moves in the West Coast have been very competitive with the other regions," the report said in a section entitled "Expect more from the West Coast."
The actual number was not disclosed by NTI.
Pay moves by trailer were 3.3 cts per mile for refrigerated vehicles, 3 cts for flatbed vehicles and 2.7 cts for dry vans. If GDP growth can be sustained at 3%, "flatbed drivers will be big winners, given much of that growth will be driven by construction demand."
Meanwhile, if another reminder of increasing costs was necessary, the Cass Truckload Linehaul Index soared again in February. It was up 6.5% in February to 131.3, following monthly y-o-y increase of 6.3%, 6.2% and 6.5% in the prior three months.
Cass said that marks 11 consecutive months of upward movement, which followed 13 months of downward movement, starting in March 2016. "In just the last seven months, our pricing forecast [for 2018] has improved from -1% to 2%, to 6% to 8%, and we now have reason to believe the risk to our estimate may be to the upside," Donald Broughton, analyst and commentator for the Cass indexes, said in the release of the numbers.
The Cass Intermodal index has been up for 17 consecutive months. The index was up 5.4% in February to 137.9.