Facing a shortage of truck drivers nationwide, Walmart last week hiked the annual pay for its truck drivers to nearly $90,000 a year and said it is looking to hire 900 more this year.
Drivers’ pay will increase in February by one cent per mile, along with additional pay for every arrival, bringing the total to an average of $87,500 per year. The median salary for a truck driver on a national, irregular route is over $53,000, according to a study last year by the American Trucking Associations.
Walmart also simplified its orientation process to cut the interview and qualifications process by more than half. Lori Furnell, Walmart’s director of driver talent acquisition, said in a statement, “We’re leaning heavily on the expertise of our Walmart road team and our certified driver trainers to grow our skilled fleet of professional drivers.”
Walmart’s growth is driving increased demand for drivers, but higher transportation costs dragged down its profit margin in the third quarter. Walmart currently employs about 8,000 drivers, including 1,400 hired in 2018, to support one of the largest private fleets in the country.
The moves come as an aging trucking population, low wages and new federal safety regulations restricting hours on the road have contributed to driver shortages and high turnover. Long hours away from home also make long-distance truck driving less appealing in today’s competitive job market. The American Trucking Associations has projected the industry could be short 175,000 drivers by 2026.
Major third-party carriers like J.B. Hunt are likewise increasing driver pay and benefits, consequently increasing freight costs across retail. In general, freight costs started rising in 2017. Beyond driver shortages, increasing demand for a limited number of available trucks, requests by retailers for more frequent deliveries, Amazon.com’s efforts to recruit drivers and bad weather are also behind the increases.
Postage hikes from the U.S. Postal Service that went into effect on Jan. 27 are also expected to weight on shipping costs in 2019.
A new study from Capgemini Research Institute, “Last-Mile Delivery Challenge,” further found that retailers are currently charging customers only 80 percent of the overall cost of online delivery and deliveries are now the most expensive part of the supply chain.