One year after introducing pay increases for drivers, Swift Transportation is reaping the benefits
Premier US trucking firm Swift Transportation is continuing to generate positive feedback from its decision one year ago to begin paying its truck drivers more.
The company has marked the first anniversary since it decided to boost the pay packets of its employee drivers and owner-drivers, with the first instalment of increases taking effect on August 1, 2014.
The latest undisclosed pay rise went through on May 1 this year, and the company has credited the move for improving retention rates and filling trucks at a time when the US grapples with as severe driver shortage.
“Well we’ve been very encouraged by the response to our recent driver wage increases,” Swift president and chief operating officer Richard Stocking says.
“The current driver market remains very competitive. As drivers increasingly have more and more employment options, the burden remains on the carriers to walk the walk. And to prove to these driving professionals that they can provide both a quality working environment and an honest living wage.”
The wage increases are part of a suite of measures Swift has implemented to keep drivers and owner-drivers happy as well as position itself as an employer of choice.
Stocking, who believes drivers deserve more respect for the job they do, says Swift’s recruiting numbers are strong and the company’s training academies are full.
“Drivers work to earn a living for their families, and this is very important. However, driver pay is not the only reason why they stay with us. We want to deliver a better life for them, and all of our initiatives are focused on that very goal,” he says.
“We will continue to seek and listen to driver feedback to improve the Swift driving experience and further make Swift an employer of choice, including honouring home time, fully utilising driver hours, process improvements, the respect and treatment of our drivers, as well as wage increases.”
Stocking made the comments during the release of Swift’s second quarter results for 2015, which includes a $50.9 million net profit — almost $11 million more than the same period last year.
Multiple divisions of Swift recorded a significant rise in revenue growth, while the metric the company uses to measure driver retention improved 15 per cent.
“The driver feedback we solicit and review indicates to us that these driver wage increases have played a part in this improvement,” Swift executive vice president and chief financial officer Ginnie Henkels says.
Henkels says Swift does not disclose the level of pay increases due to competitive reasons.
“However, I can say that both the increases, the first one being in August 2014 and the second one recently implemented on May 1, 2015, were material,” she says.
In its statement on the results, Swift says it delivered year-over-year growth in operating income in its dedicated, refrigerated and intermodal divisions.
Its general freight operation took a hit due to wage increases for drivers and owner-drivers, but the company adds that it expects the payments will improve retention and recruitment numbers.
It has also hinted that further pay increases are on the cards.
“These increases were designed to yield improvements in driver retention and recruiting, and while the driver market continues to be challenging, we are already seeing the positive impact of the investment we have made in our drivers and owner-operators,” it says.
“We consider our driving service professionals as our most important assets and remain fully committed to making these types of investments to improve driver retention and recruiting. As such, this most recent increase represents the second material increase implemented within the past 12 months.”
Swift founder and CEO Jerry Moyes says the company is proud of its second quarter results and is confident it can continue to make gains in the second half of the year and into 2016.
He praised Swift’s workers for the results.
“I want to emphasise how proud we are of our people. Starting with the driver professionals we have out on the road, followed by our shop personnel and the support by all of our office staff. They are the reason we’ve been able to generate these results,” Moyes says.