The transportation industry is experiencing a monumental labor shortage. The industry is facing a shortage of 80,000 truck drivers, up 30% since the start of the pandemic, according to a recent study from the American Trucking Associations. At the same time, consumer demand is surging and expectations surrounding freight turnaround times are less forgiving than ever before. Thanks to these persistent industry headwinds, the debate surrounding how to pay drivers – by the mile or by the hour – is heating up, and Congress is taking notice.
One oft-cited problem with the tried-and-true per-mile method is that drivers do not get paid for detention time. When drivers are stuck at loading docks, they are not earning money because they are not moving. They are, however, still working. In 2018, the U.S. Department of Transportation’s Office of Inspector General released a study that found detention time alone can reduce a driver’s income by over 3% each year.
In the face of any type of driver pay reform, carriers may have to make sure drivers are making adequate money on a per-hour basis. With the current per-mile structure, it is possible for drivers to make under minimum wage on a per-hour basis thanks to things like long detention times. This may not be allowed to happen for much longer.
Locomation’s human-guided Autonomous Relay Convoys, which are already poised to alleviate a variety of industry ills, could also help the industry cope with driver pay changes.
An ARC system consists of two trucks with one driver in each truck. Each driver with his or her own truck takes turns actively leading the convoy, fully engaged in the function of driving, while the driver in the follower truck rests in autonomous follower mode. This human-guided phase of the company’s four-step approach to autonomous trucking allows for step-by-step progression without compromising the safety of the drivers, others on the road or the loads.
Locomation has created ARC technology that can operate 20 to 22 hours per day in this convoying activity, doubling a driver’s standard 11 on-duty driving hours under current U.S. Department of Transportation hours-of-service rules. This scenario alone generates substantial improvements in asset and driver utilization and cost savings. Not only does this system expand profit margins for carriers, it makes it virtually impossible to underpay drivers, allowing companies to meet minimum wage guidelines without negatively affecting their own bottom lines.
While lawmakers have bandied around the idea of paying truck drivers by the hour in the past, the 2,700-page, $1 trillion infrastructure bill currently before Congress could pave the way for real movement in that direction. The legislation includes a provision directing the Federal Motor Carrier Safety Administration to contract with the Transportation Research Board to conduct a study of the impacts of various methods of driver compensation on safety and driver retention, including looking at hourly pay and payment for detention time.
It is not just about how drivers get paid; it is also about who pays them. Current FMCSA Deputy Administrator Meera Joshi – who is poised to take over as FMCSA administrator – recently pointed out that shippers have no real incentive to speed up operations at their docks in order to rescue driver downtime because it is not directly costing them any money. Her remarks make it important to consider that any future driver pay reform could include incentives for shippers to take responsibility and pay carriers for time spent at their docks.
“Shippers are going to have to get organized and figure out how to reduce detention, which improves the overall efficiency of the system,” Finch Fulton, Locomation’s vice president of policy and strategy, said. “It could lead to truck drivers making more money, and it could lead to increased cost of goods as shippers pass their costs onto consumers.”
The Biden administration has proven itself to be dedicated to labor reform and creating more fair working conditions throughout multiple U.S. industries, further stoking this fire.
Locomation’s human-guided approach to autonomous trucking offers a plethora of driver lifestyle benefits that traditional trucking simply cannot. The emergence of these types of roles are in line with the goal of providing more equitable workplaces, and they will likely attract new drivers into the industry while cutting down on driver turnover for those employing the technology.
“The average carrier has to replace 100% of their drivers every year,” Fulton said. “This tech helps protect against turnover.”