Can paying truck drivers by the hour lower turnover and prevent truck crashes?

Dupré Logistics  has curbed trucker turnover and increased safety by paying drivers based on hourly wages as opposed mileage, like the industry standard

In the first quarter of 2013, the turnover rate for qualified truck drivers at large and small trucking companies rose. The trucking industry attributes this to the improving economy and the increasingly competitive market for well-trained professional truck drivers.  There may be an additional wrinkle to this as well: As our truck accident lawyers have previously discussed, there’s a national shortage of truck drivers today.

Bob Costello, American Trucking Associations (ATA) chief economist, recently noted that “data shows that competition for drivers across the industry remains high.” According to the ATA Trucking Activity Report, quarterly turnover at large truckload fleets rose in the first quarter to an annualized rate of 97% from 90% in the fourth quarter of 2012. The rate was the highest it has been since the third quarter of 2012 when it was 104% and just below the average rate in 2012 of 98%. Among smaller trucking companies, the news was just as grim. Small trucking companies saw the rate increase to 82% in the first quarter from 76% in last quarter of 2012.

High driver turnover matters. Driver turnover at the company is always one of the things I look for when I’m starting to investigate any serious truck accident.  With high truck driver turnover comes well-documented dangers. Fewer truck drivers  make it more difficult for trucking companies to meet delivery deadlines. This translates into pressure on companies to push truck drivers to transport product even faster — even if this means breaking mandatory safety rules of the roads such as violating the hours of service, and cutting corners on maintenance and driver training and safety.

Another danger with such high turnover is that there can be more  inexperienced truckers who are more likely to make serious mistakes resulting in preventable truck accidents. Even worse, with a high turnover rates among its truckers, trucking companies are reluctant to invest resources into properly training their drivers. These companies do not want to train a person only to have them leave the company shortly afterwards.

Is there a better way?

Well, one trucking company, Dupré Logistics, has significantly reduced its truck driver turnover by changing their economic compensation model. By moving away from a mileage-based pay scale to a program that compensates its truckers for all time worked, the Louisiana-based company has slashed driver turnover rates nearly in half.

I strongly agree with this argument.  As a truck accident lawyer, I have criticized the incredibly unsafe economic model that many companies use that has the perverse incentive of breaking safety rules and making everyone on the road less safe. Under the current status quo, there is clearly an incentive to pay by the trip, instead of for all time worked, even though this has been shown to increase rule violations and cause more truck accidents. Dupré recognized this and created a safer model that rewards truckers for their time invested rather than the miles they drive.

During this year’s National Driver Appreciation Week, Dupré Logistics highlighted its program with claims that the new model has produced more efficient schedules and increased driver safety. The company president, Tom Voelkel, said that the trucking company’s bold model attracts a higher caliber of trucker with a dedication to staying with the company. He further emphasized that the benefits far outweighed the bottom line.

By paying drivers for all activities while on-duty, including driving, pre-trip inspections, and wait time and loading, the driver feels valued. Time spent doing a proper pre-trip inspection (which should take at least 30 minutes), for example, would otherwise go uncompensated. With an economic model based on mileage in place, it incentivizes truckers to minimize time spent taking safety measures, and to maximize time spent driving. Drivers who get paid by the hour are safer because instead of rushing through deliveries, the truck driver places emphasis on taking time to be safe, and preventing serious semi-truck accidents.

To date, the new pay program has helped cut the company’s risk management costs by 34 percent, said Voelkel. Beyond these savings, Dupré has been able to make real, meaningful investments, into its truckers. Their truck drivers are trained thoroughly because there is a significantly lower expectation that a trucker will leave the company.

Today, Dupré reports only a 20 percent turnover rate.

This is a wonderful idea. Having seen the tremendous economic pressure put on truck drivers under the current system, I believe this could go a long way to changing the culture of the  trucking industry. It could prevent serious truck accidents and save lives.