Walmart to raise truck driver pay amid national shortage

by Kim Souza ([email protected]) 1,942 views 

Walmart Inc. runs the third-largest private trucking fleet in the country with 8,000 drivers who travel more than 700 million miles annually delivering merchandise to Walmart and Sam’s Club. The retail giant announced plans Wednesday (Jan. 23) to boost driver wages in its commitment to retaining well-qualified drivers amid a national shortage.

“Truck drivers are a critical part of our team here at Walmart and have been since Sam Walton started the private truck fleet in the 1970s,” said Greg Smith, executive vice president of Walmart U.S. Supply Chain. “Our professional drivers are part of what makes Walmart so special. This wage increase reflects the importance of our private fleet and our commitment to recruiting and retaining the best drivers in the industry.”

Beginning in February, Walmart drivers will receive a per-mile increase of $0.01 along with a 50-cent increase in pay for each time they arrive at their destination and each time they drop a trailer. Walmart explained this means an additional $1 per run. Walmart said its drivers can earn an average of $87,500 in their first year of employment with an all-in rate of nearly 89 cents per mile.

Walmart said other perks and benefits for joining its driver team include a comprehensive package such as accruing three weeks paid vacation in the first year. Drivers for Walmart also run a fairly predictable schedule, allowing them to maintain a healthy work-life balance. Walmart drivers also do not unload the freight. Walmart boasts one of the best safety records in the industry with more than 250 million safe driving miles in the past five years.

That said, the retailer did have to settle a high profile fatality lawsuit when one of its drivers smashed into a van carrying comedian Tracy Morgan and James McNair in 2014. McNair was killed in the accident and others were also injured in addition to Morgan. The Walmart driver — Kevin Roper — had been awake for more than 24 hours when the accident occurred. Roper pled guilty to vehicular homicide and Walmart settled with the McNair family for $10 million, but the settlements with Morgan were not disclosed by either party. Roper left the company after the incident.

Walmart said applicants must have at least 30 months of full-time experience with no serious traffic violations in the past three years. Some analysts have wondered how the ongoing driver shortage has impacted Walmart’s ability to recruit and retain the safest of drivers.

Amid the truck driver shortage in 2018, Walmart revamped its hiring process, which allowed for more applicants to pass testing and get hired. The test used to be a pre-trip backing exercise and a road test, which the applicant had to pass. If drivers fail any aspect, they are not considered and must wait a year to re-apply.

Walmart’s acceptance rate was between 5% and 10%, according to Yahoo! Finance. By changing the testing process to a three-day trial, where Walmart observes their driving and can teach them preferred safety precautions, the pass rate has increased by more than 50%, according to Walmart. The retailer said it added more than 1,400 new truck drivers in 2018 thanks to referrals, job fairs and additional advertising.

Walmart said the wage increase is another step to maintain the strength of it professional trucking fleet. With high volumes of freight to be moved and electronic logs holding drivers accountable to hours worked behind the wheel, trucking companies were forced to raise driver pay in 2018. The American Trucking Associations anticipates driver pay rose between 8% and 12% last year while signing bonuses and other perks were also added to try and woo drivers to take a seat behind the wheel. ATA reports driver pay at large carriers averaged between $75,000 and $80,000 with regional truckload carriers earning roughly $58,800.

ATA projected the driver shortage at 50,000, while other industry professionals believe it’s much higher. As capacity constraints widened in 2018, Walmart began a national advertising campaign in November to try and recruit more drivers, reportedly doubling its expenditures on driver recruitment. The retailer also began offering referral bonuses up to $1,500. Walmart said its drivers are helping the company recruit the best drivers available and referrals are up.

“The modern trucking industry operates in every aspect of economic life, delivering everything from textbooks and medical supplies to retail goods and construction materials and truck drivers are an essential component of ensuring the trucking industry remains healthy in our state,” said Shannon Newton, president of the Arkansas State Trucking Association. “Walmart’s drivers set a high industry benchmark for professionalism and performance and we applaud Walmart’s commitment to retaining and recruiting highly talented individuals for their private fleet.”

There are more truck drivers in the state of Arkansas than any other profession, and the trade and transportation sector remains important to the state’s economy. Arkansas has the highest percentage of private sector employees who work in the trucking industry, according to the American Trucking Trends 2018 report. The report showed one in 12 people, or 3.1%, of the 1.004 million people who work in non-government jobs are employed by the trucking industry.

The American Transportation Research Institute recently released a report showing that in 2017, more than 7.6 million people in the United States worked in trucking-related jobs across all sectors of the economy. Arkansas has a total of 30,700 trucking employees. Trade and transportation represent the largest employment sector in the Northwest Arkansas, Fort Smith and Little Rock metro areas, according to the Bureau of Labor Statistics.