Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/1002866
30 | Overdrive | July 2018 GUARANTEED PAY years, says Brant Osborne, chief operat- ing officer. This is a truly flat pay offering, with no mileage benefit for exceeding any minimum. Osborne believes the plan helps make up for pay hits from break- downs, bad weather, detention and other service interruptions. "I can't remember the last time one of these drivers quit," says Osborne, who believes there also are safety benefits: "They feel less pres- sure to push." Most drivers are home every other weekend, and not being home every weekend earns them an additional $11,000 per year, or about $60,000 annually. It's also great for the driver's family. "They know what to expect," Osborne says. Echoing this contention is Smokey Point driver Dereik Rich, who's based in Southern California but is planning a move to Washington State where the fleet is headquartered. Rich was making around $31,000 annually as a local driver for Smokey Point. Then he chose to take advantage of the $65,000 base salary for OTR drivers announced in May. "I'll be making more money than I've ever made in my lifetime," the 43-year- old says. When Rich told his wife the salary figure – and that it would be guar- anteed – "I thought she was going to break down" in tears of joy. When the notion of guaranteed sal- ary pay was first broached with Smokey Point drivers as the company began a pilot program with a few drivers, $54,000 was the annual amount, says company CEO Dan Wirkkala. "We were paying all the accessorials" such as detention and/or layover pay on top of the guarantee, he adds, similar to how drivers were paid in the standard mileage program. But Wirkkala and company chose to ditch most traditional accessorials and boost the pay guarantee, adding an end-of-year mileage and fuel bonus and some other incentives, as a way to "make it simple, make it obtainable, with no smoke and mirrors. This industry [as it relates to company drivers] is full of smoke and mirrors." How many recruit- ers, Wirkkala asks, "sit around and discuss accessorials and bonus programs and structure them so that they look great to a driver so recruiters can market them" — only to avoid paying them as much as possible? The $65,000 figure for solo drivers at Smokey Point ($75,000 for teams) assumes 9,900 monthly miles, or 118,800 annually (equating to almost 55 cents per mile). It pays out whether or not the mileage figure is hit. Anything above that mileage is paid out with an end-of-year bonus based on the driver's rate of pay, itself based on tenure with the company. Overdimensional or hazmat loads are paid a per-mile acces- sorial on top of the salary, adding an incentive for Smokey Point operators to haul those loads. Richmond also adds a special incentive to his $1,000 five-day minimum guaran- tee at Eagle Express, calculated on a daily basis for short-haul loads completed in a single day. If they're so short as to be able to do two picks and drops, Richmond calculates the day's $200 guarantee on a per-load basis. That delivers $400 to the driver for the day, given short mile- age and load/unload times eating up the clock might shut a driver out of any potential to beat the minimum $200 on base miles pay alone. Of drivers involved in the pilot pro- gram with Smokey Point, Wirkkala says several are on track, if they keep up cur- rent levels of production through year- end, to bag a $16,000-$24,000 bonus. At the top level, that'd put a Smokey Point company driver at nearly $90,000 for the year, or nearly $100,000 for a team driver. That's getting closer to where employ- ee driver pay would be had it adjusted upward at the rate of inflation since the 1980s, when it began to fall precipitously relative to the inflation rate. Three years ago, carrier pay package analyst Gordon Klemp noted average driver pay would have been $115,000 at that time had it kept up with inflation from 1980. What's in it for any fleet to guarantee pay? The obvious benefit is to recruit and retain "good, solid professionals," Wirkkala says. "Everybody in the fleet has a predictable income but the truck driver, and it's just wrong. We're going to change that." Wirkkala expects about half of the company's drivers "will migrate over to the new salary package" and that many of its senior drivers, earning north of $75,000 in many instances under the base mileage package, will stay put. — Linda Longton contributed to this report. Driver pay preference Source: Overdriveonline.com poll Guaranteed w/ or w/o added incentive 7% Flat rate per load 5% Weight-related or other 4% Percentage 43% Mileage 21% Hourly 20% Asked what principal base pay structure they've most preferred through their careers, drivers and leased operators among Overdrive's online readers choose percentage over mileage two to one. Except for the mile- age/percentage percentages being flipped, distribution of all the poll's choices is roughly analogous to what respondents to Overdrive's compensation survey indicated they were being paid today. Guaranteed pay isn't limited to large fleets. Eagle Express, which owns this truck and seven others, put a $1,000 weekly guarantee in place when it bought its first trucks in 2014. Fleet owner Leander Richmond recently completed an order of 10 new power units.