Walmart Dangles $110,000 Starting Pay to Lure Truck Drivers

Date: Friday, April 15th, 2022
Source: Wall Street Journal

Walmart Inc. WMT -0.09%  is raising starting pay for in-house truck drivers to as much as $110,000 a year and expanding a program that trains its existing workers to become drivers.

The company, in a bid to keep its supply chain running smoothly, is setting starting salaries for its truck drivers between $95,000 and $110,000 a year, up from an average starting salary of $87,000, said a Walmart spokeswoman. The internal training program will offer workers in other Walmart roles a 12-week course to become certified truck drivers and join the company’s internal fleet, the company said.

The push comes as the trucking industry continues to grapple with challenges in recruiting drivers even as wages for truck drivers have risen steadily throughout the Covid-19 pandemic, though some data shows freight demand may be cooling. Last month, the trucking industry lost 4,900 jobs, the first monthly decline in nearly two years, federal labor statistics show. The decline was in contrast with job gains in the service industry, including the travel sector, and other parts of the logistics industry such as warehousing.

Walmart and other large retailers have grown significantly by revenue during the pandemic as demand for items including household goods and building materials soared, creating the need for more supply-chain workers. At the same time, the higher levels of demand, production bottlenecks and port delays have resulted in supply-chain snarls. And so far, large retailers have been able to push up wages for hourly workers and other roles without denting their profits.

“We want to make sure we continue to attract drivers, but also retain” existing drivers, said Karisa Sprague, a senior vice president in Walmart’s human resources department. Walmart hired 7,000 drivers for its internal fleet during the past two years, last year hiring 4,500, the most in company history, said a spokeswoman. It employs around 12,000 truck drivers total.

“You can pull up job postings and there are lots of sign-on bonuses and shiny objects out there, and we want to make sure our associates are taken care of,” Ms. Sprague said.

Walmart’s efforts to build out its trucking fleet illustrate how companies are taking on more responsibilities within their supply chains and, in some cases, taking over tasks once handled by third parties. Big-box retailers are adding drivers to ensure goods reach stores or consumers’ homes.

Target Corp. is building new regional distribution centers and a network of sorting sites to speed goods through its supply chain. BJ’s Wholesale Club Holdings Inc. reached a deal in January to buy four distribution centers and the trucking fleets tied to the sites from a closely held logistics company.

Walmart, the country’s largest retailer by revenue, has long been known for paying its truck drivers more than the industry average, a holdover from the early days of the company when executives believed a large internal fleet helped Walmart move freight more efficiently. In job postings on Walmart’s website, the company said it offers quarterly safety bonuses in addition to sign-on bonuses of $8,000 or more for new truck drivers in some locations.

In the U.S., median annual pay for heavy-truck and tractor-trailer drivers was $47,130 in 2020, the most recent annual data available, according to the Bureau of Labor Statistics, and has increased by about 3% to 4% annually since 2016. Truckers hauling complex loads like wind turbines or hazardous materials are often paid above the industry average.

The announcement from Walmart reflects pressure that has been building over several decades in the market for over-the-road truckers, with pay lagging other logistics roles, said Jonathan Starks, chief intelligence officer at FTR Transportation Intelligence. He said it was likely other firms would follow Walmart’s approach to lift pay for drivers, including for-hire carriers that try to match their capacity with market demand for hauling goods.

“There’s a lot of need for moving freight, and they’ve got to figure out ways of making that happen,” he said, referring to Walmart. “I think it probably signals that some of the inflation pressures that are coming from transportation are now built in.”

Earlier in the pandemic, U.S. trucking companies scrambled to hire drivers and get more people into training programs as freight demand surged. Some companies pitched prospective drivers on an opportunity to make salaries upwards of $60,000 in their first year. Acquiring a commercial driver’s license is a relatively easy process, but trucking companies typically face high turnover, Mr. Starks said.

More than a year ago, Walmart decided it needed to train drivers internally to keep up with the pace of the business and add new opportunities for internal promotion, Ms. Sprague said.

Walmart has moved 17 workers from its warehouse operations through its truck-driver training program so far, she said, and it aims to add hundreds of drivers through the program by the end of the year.

It can cost around $4,500 to become a truck driver independently, she said. “We know that the industry isn’t necessarily building more drivers, but we want to be able to continue the growth of our private fleet,” she said. “We need to find multiple ways to do it.”

 

[Read from the original source.]