Truckies on a roll with $147,000 salaries as Walmart drives for smoother supply

Walmart is raising starting pay for in-house truck drivers to as much as $US110,000 ($147,000) a year in a bid to keep its supply chain running smoothly.

Walmart has lifted its pay levels for truck drivers and is retraining staff and offering sign-on bonuses. Picture: Bloomberg

Walmart is raising starting pay for in-house truck drivers to as much as $US110,000 ($147,000) 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, was setting starting salaries for its truck drivers between $US95,000 and $US110,000 a year, up from an average starting salary of $US87,000, said a Walmart spokeswoman.

The training program will offer workers in other Walmart roles a 12-week course to become certified truck drivers and join the company’s fleet.

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 4900 jobs, the first monthly decline in nearly two years, federal labour 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 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 7000 drivers for its internal fleet during the past two years. Last year it hired 4500, the most in company history. It employs around 12,000 truck drivers in 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 is building new regional distribution centres and a network of sorting sites to speed goods through its supply chain. BJ’s Wholesale Club reached a deal in January to buy four distribution centres and the trucking fleets tied to the sites from a closely held logistics company.

Walmart, the country’s largest retailer, 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 it move freight more efficiently. In job postings on Walmart’s website, the company said it offered quarterly safety bonuses in addition to sign-on bonuses of $US8000 or more for new truck drivers in some locations.

In the US, median annual pay for heavy truck and tractor trailer drivers was $US47,130 in 2020, the most recent annual data available, and has increased by 3 to 4 per cent annually since 2016. Truckers hauling complex loads like wind turbines or hazardous materials are often paid above the industry average.

The announcement from Walmart reflected pressure that had been building over several decades in the market for 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, US 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 $US60,000 in their first year. Acquiring a commercial driver’s licence is a relatively easy process, but trucking companies typically face high turnover.

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