While freight volumes, capacity, and freight rates play pivotal roles in dictating wage momentum for professional drivers, those forces increasingly are being counterbalanced by broad, structural effects of the U.S. labor market and entrenched constraints in driver supply. Weaker freight volumes and the downturn in freight rates over the past year and a half have masked the deeper effects of the historically challenging labor market. When the next freight rebound cycle occurs, those deep-seated, structural forces will once again be predominant and exacerbate the challenges fleets face in hiring and retaining the professional drivers they need.
Any conversation around supply and demand dynamics of the driver market must start with putting trucking’s labor needs into the broader context of the U.S. labor market.
The U.S. labor market remains historically tight, particularly for industrial workers (aka blue-collar workers). The U.S. has a systemic blue-collar labor shortage. Competition is fierce among all industries vying for industrial workers.
Trucking jobs often are considered less desirable when compared to other blue-collar fields that offer similar pay but better schedules and more home time.
Unemployment in the U.S. has remained below 4% for over two consecutive years — since December 2021. While a rate between 4-5% presents a tough environment for fleets to recruit and retain, any unemployment reading below 4% represents a critically challenging situation for trucking fleets to hire and maintain personnel:
Not only has unemployment remained at record lows, but job openings have held firm at near-record highs in the same time period. Before the 2020s, the highest job openings rate since 2000 was 4.8%, in late 2018. Over the 20 years prior, the rate hovered around 3%, ebbing and flowing above and below the mark during up and down cycles in the economy. However, the job openings rate zoomed to a record high of 7.4% in early 2022. It has been slowly descending since, but remains well above historically high marks:
Specific to trucking, the implementation of the Drug & Alcohol Clearinghouse in early 2020 has sidelined over 150,000 drivers as of the beginning of 2024 — and that number continues to grow every month. Only a fraction of those drivers have completed the return-to-duty protocol, but many fleets wouldn’t hire them if they did, meaning those 150,000 (and growing) drivers have basically been removed from the driver pool. To put that number into perspective, between January 2020 and the end of 2023, the Department of Labor reports less than 100,000 net new driver jobs added according to payroll data of for-hire motor carriers.
Age and health factors also continue to plague driver availability. Retirements and age-outs annually account for a significant source of industry exodus, and health-related issues sideline more than 300,000 drivers annually.
The industry also still struggles to connect with and hire younger generations, with the average driver age stuck at 54 years old. While hundreds of thousands of new drivers earn CDLs and enter the industry every year, attrition and churn make it difficult for the driver pool to meaningfully grow to meet demand.
What’s more, many if not most fleets require a minimum of two years of driving experience to be hired. So the annual wave of new entrants and exits does little to grow the pool of drivers with two-plus years of experience and to address the point in the driver supply funnel where most fleets begin recruiting.
What can fleets do? Addressing these issues requires fleets to be creative and driver-focused in their approach to recruiting and retention programs. Make health and wellness a critical fleet-wide concentration that puts drivers first. Implement hourly pay or guaranteed weekly pay to bridge the gap for drivers’ unpaid working hours. Find ways to hear drivers’ honest feedback and work to address issues to bolster retention. Utilize KPIs that take an honest assessment of your fleet’s performance in driver retention and build pillars to address weak spots. Actively build programs to attract new drivers to the industry. Be active in your own community at the high school, community college, and trade school level to attract younger workers to trucking and to your company. Lastly, ensure you’re benchmarking wages and benefits so drivers are compensated appropriately and have access to valuable resources like health insurance and retirement savings.
Despite hiring pressures easing from the intense demand for drivers from late 2020 and into 2022, driver hiring activity in 2023 outpaced both 2021 and 2022. Will the trend continue? That will be a component of the factors influencing wages in 2024:
With companies pausing training programs and hiring partnerships with CDL schools, the industry is eroding the foundation for tomorrow’s needs. Inexperienced drivers who obtained a CDL hoping to work for a specific company or find a job at all in trucking have found themselves on waiting lists or without opportunities due to their lack of experience. The opportunities open to them are the toughest, least desirable jobs — OTR, long-haul, irregular route with little home-time and lowest pay among industry sectors. Thus, even when new entrants do find a job, they can become quickly disillusioned with their new career and leave the industry. Churn among new drivers is immense and significant in the first 120 days.
That’s what happened in 2019. When the market regressed after the 2018 boom, a similar theme played out in 2019. There was an oversupply of capacity combined with less demand, and companies right-sized and the industry’s driver pipeline was depleted. When demand returned starting in late 2020, companies and the industry as a whole had to rebuild and retrack the pipeline of driver hiring — which created tremendous pressure for fleets of all types to grow at the rate they wanted. It also caused wages to soar.
NTI has been tracking driver wage changes since 1995, spanning seven presidential election cycles. Data shows that election years do have a correlation with a decrease in wage activity. However, election years have also coincided with broader economic down cycles: The Dot-com Bubble recession that began in March of 2000, the housing bubble crisis and Great Recession that began in 2008, and the pandemic-caused mini-recession in 2020. Here’s a relative comparison of how driver pay momentum corresponds with each year of a presidential election cycle, compared to GDP and CPI for those same years: 
Private fleets over the past few years have put a large emphasis on growing their driver count. There’s also been a growth in number of private fleets registered with U.S. DOT. Private fleets have also been active in benchmarking their pay and being aggressive in attracting and retaining drivers. As for-hire fleets have become more cautious, private and dedicated fleets have sought to grow their wages and scoop up drivers that meet their qualifications from the for-hire pool. They’re also emphasizing internal training programs and dock-to-driver training initiatives. Whereas for-hire fleets had gained ground on the wage gap between their wages and private fleet driver wages, that trend has reversed over the past 18 months, as private fleets have continued to grow their compensation offerings.
Since 2019, despite success of attracting new drivers to the industry, trucking has struggled to make in roads with younger generations. Millennials and Gen Z, comprising workers approximately 40 and under, are vastly under represented in trucking compared to the general U.S. workforce. On the flipside, Baby Boomers and Gen X are overrepresented in trucking. While that’s an issue today, it’s even more critical looking at the years ahead. By next year, it’s estimated that Gen Z will make up a quarter of the U.S. workforce, and Millennials will make up more than 40% of the U.S. workforce.
As Baby Boomers, currently comprising 1 of every 4 workers in trucking, continue to age out of the industry and retire, will the industry be able to attract younger generations in the volume needed to replace them?
Here’s a look at the current age data of trucking compared to the general workforce, as well as data showing the industry’s regressing in this area rather than progressing:
Driver wages have been on a rollercoaster the past eight calendar years, following boom and bust cycles. Those cycles followed a season of stability between 2010 and 2015 where driver pay slowly gained momentum each year. The previous six years of that rollercoaster are charted in the graph above.
NTI’s forecast for base pay growth (mileage and hourly wages) in the for-hire carrier segment in 2024 is 1.45% — an increase from 2023’s growth, but not quite a return to an inflationary cycle. Wage gains will be concentrated among drivers at the narrower end of the hiring funnel outlined above — drivers with experience and for jobs requiring higher labor and increased qualifications or endorsements.
Of note, fleets did put an emphasis on incentives throughout 2023 that promote cost savings for the company but also give drivers the opportunity to increase their earnings, such as fuel, productivity, safety, and performance, which you can read more about in NTI’s 2024 recent overview of wage trends in the first months of 2024.
While base pay did climb in 2023, drivers’ W2 earnings were mostly flat due to a decrease in productivity outside of their control. Drivers saw more layovers and fewer loads, miles, and hours. Despite increases in their mileage and hourly wages, their take-home pay often did not reflect those increases or the big strides of wages in 2021 and 2022.
For private and dedicated fleets, NTI estimates wage activity to remain heightened. Most private and dedicated fleets structure their driver compensation programs on a market-level basis. NTI estimates market-level wage growth to average between 2.5% and 5.5% in 2024, depending on hiring activity and competition for drivers in those locations, driver supply and availability, and the nuances of the job, such as labor level, experience requirements, shift type, and more. Here’s a look at how private fleet wage growth on an annual basis has compared to for-hire fleet pay momentum since 2008:
While 2023 saw a brief respite for the industry to catch its breath after a tumultuous series of jolts in recent years, NTI contends that the broad, ongoing changes to the U.S. labor market and perpetual driver supply constraints will continue to spur motor carriers and private fleets to evaluate and implement structural changes to how they hire and pay professional drivers.
The industry must contend with a convergence of factors: Shifting generational attitudes as Baby Boomers and Gen X cohorts retire and age out of trucking and are replaced by Millennials and Gen Z cohorts; perpetual and systemic blue-collar labor shortages; and rising insurance costs that will continue to push pay packages that promote safety over productivity (such as hourly and guaranteed pay options, while per-mile will continue to decline in prevalence).
Those trends point to a continued shift toward location-based hiring that puts an emphasis on more home time, more predictable and flexible scheduling, and more predictable and understandable compensation plans.
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On the first Thursday of every month, NTI President & CEO Leah Shaver, aka the Sunshine Girl, goes live on air on SiriusXM Channel 146, Road Dog Trucking, to talk with drivers about all things pay. From paycheck questions to working with fleets on resolving issues around compensation, HR and legal, life on the road, and relationships with their employers, Payday on Road Dog Live dives into topics drivers care about most.
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