Logistics News

Walmart puts its money where its drivers are

The nation’s largest retailer is increasing pay for truck drivers with three years’ accident-free experience to around $87,500.

Wal-Mart has significantly upped the ante in its effort to compete for an ever-dwindling supply of qualified, compliant truck drivers.

The nation’s largest retailer is increasing pay for truck drivers with three years’ accident-free experience to around $87,500. That 89 cents per mile over-the-road rate would make a Wal-Mart driver one of the richest in the industry. Walmart operates the third-largest private fleet in the country with about 6,400 power units, 63,700 trailers and around 200 straight trucks, according to a 2017 compilation of its fleet.

This year Walmart is hoping to add hundreds of drivers to its fleet. The wage increases start this month. In addition to its private fleet, Walmart is a huge truckload shipper in the common carriage and LTL arenas.

Walmart said it added more than 1,400 new drivers last year. But with same-store sales increasing 3 percent year over year and Wal-Mart increasingly competing with Amazon in the e-commerce space, company officials quietly admitted the most efficient way to stay competitive was to be aggressive with driver pay.

And while Walmart is paying the drivers more, analysts caution shippers and manufacturers that eventually those costs trickle down to them.

“Driver wages don't go higher unless rates go up--this is important,” said Stifel analyst Dave Ross in a recent note to investors about driver pay in general. “We believe that the driver shortage is a simple commodity shortage driving truckload rates higher.”

According to the Bureau of Labor Statistics, the median annual wage of a truck driver is $44,500 per year—about half what Walmart’s starting pay for veteran drivers will be under its new pay schedule.

Only about 10 percent of all drivers earn more than $64,000 in wages every year—nearly all at Teamsters-covered carriers such as UPS, YRC Freight and its subsidiaries and ABF Freight System.

Walmart is guaranteeing its truck drivers get three weeks paid time-off its their first year, as well as quarterly bonuses for safe driving. Plus, the company is emphasizing its drivers get two days a week at home—largely because of its emphasis on regional short-haul truckload deliveries.

In addition, drivers say, Walmart routinely offers cash bonuses per year between $3,000 and $4,000. Profit sharing is also provided, with an average profit sharing of $1,698, according to Drive4Walmart.com.

  When working for the company, the average Wal-Mart truck driver also gets several perks including discounts, paid vacations, health care and other fringe benefits that make a Wal-Mart driving job one of the most elite in the industry, along with UPS and a few of the unionized LTL carriers.

Collectively, Walmart says its fleet drivers log approximately 700 million miles per year. The average Wal-Mart truck drives more than 100,000 miles annually.  Wal-Mart has been named the “Safest Fleet” in its category 12 out of the last 16 years, the company said.


Article Topics
driver pay   Driver Retention   Driver Shortage   Trucking   Walmart   All topics


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About the Author
John D. Schulz
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.
 
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