Less-than-truckload (LTL) carrier YRC Worldwide (NASDAQ: YRCW) and the Teamsters have agreed to implement hiring bonuses for new CDL drivers. In a Tuesday memorandum to local unions representing YRC Freight, New Penn and Holland, the negotiating committee of the Teamsters informed the rank and file that a new-hire bonus of up to $7,500 could be paid to drivers.
The memo highlighted a provision for increased wage rates previously laid out in the national master freight agreement (NMFA), which was last ratified in May 2019, to address “challenges hiring and retaining qualified employees in certain areas of the country.”
The plan calls for the sign-on bonuses to be paid in three installments over 18 months and not to exceed $7,500. YRC will determine which regions should implement the bonus plan to hire new drivers and the local unions have the discretion to approve or decline the plan.
If approved at the local level, current employees who are still under the company’s “new-hire wage progression” program, usually the first two years of employment, will be bumped up to the 100% pay rate for their applicable jobs. Also, if one of the companies or locations in a city or region implements the plan, all locations in the area are expected to participate in the program.
The trucking industry as a whole has seen its fortunes turn in a matter of a couple of months. The roller-coaster demand environment present in the early days of the pandemic has given way to a steady building in freight shipments, most of which are moved by truck at some point. As the percentage of consumer spending on tangible goods has increased, the demand for inventory restocking and truck capacity has surged.
Concerns around contracting COVID-19, rising drug test failures and refusals seen at the Drug & Alcohol Clearinghouse and limited driver school enrollment due to social-distancing restrictions have diminished the available driver pool, placing drivers in high demand. The result has been an increase in driver pay throughout the industry as some expect total CDL drivers to decline by as many as 200,000 by the end of the year.
“As you are all aware, there continues to be a shortage of CDL-qualified drivers in the workforce in many geographic areas. This shortage of drivers results in increased use of contractors and [purchased transportation] and also restricts the growth of the bargaining unit,” stated Teamsters National Freight Director Ernie Soehl.
A spokesman from YRC said the company does not have a comment at this time.