Record-level wage increases over the past three years continued well into the fourth quarter of 2022, according to data compiled by The National Transportation Institute (NTI). Gains in base wages — mileage and hourly pay — were reported across fleet type, industry segment, driver job type, and all experience levels. Likewise, motor carriers and private fleets continue to pad bonuses and incentives contributing to drivers’ overall earnings. NTI observed three key trends at the end of 2022:
- Wages for drivers of all experience levels advanced again in the fourth quarter, with the wage momentum most pronounced for drivers with the least amount of experience. According to NTI’s National Survey of Driver Wages, professional drivers with one year of experience saw the most wage growth, increasing by 5.9% y/y. The industry’s highest-paid drivers saw their wages grow by 3.2% on average.
- The prevalence of compensation incentives signaled a robust hiring environment at year-end. Sign-on and referral bonuses and guaranteed pay options grew again the in the fourth quarter, with more than 8 in 10 fleets offering referral bonuses to their drivers and more than 7 in 10 paying a sign-on bonus.
- Holiday pay rates, the flat-rate wage paid to drivers when they take off a holiday like Thanksgiving, Christmas, New Year’s Day, or Fourth of July, were mostly flat in the fourth quarter compared to 2021, except for temperature-controlled drivers. Their holiday pay rate climbed 33% from 2021’s fourth quarter.
All rates cited below exclude fuel surcharges unless otherwise noted.
Only three states reported gains last week – available capacity tightened in Colorado, where rates were up $0.03/mile to $1.46/mile, driven by gains in the Grand Junction market. In New England, where a series of heavy snow storms battered the region, capacity was very tight in New Hampshire (rates up $0.10/mile to $2.21/mile), while in neighboring Maine, rates increased by $0.17/mile to $2.65/mile for outbound loads, the second-highest in seven years. Loads from Augusta, ME, to Elizabeth, NJ, were up $0.10/mile to $2.91/mile, while short-haul loads to Boston were paying $734/load ($2.30/mile round-trip average), which is almost $200/load lower than the previous year.
Loadlink Technologies, part of Roper Technologies along with DAT Freight & Analytics, reported Canadian spot market volumes ended 2022 up 7% m/m in December but still down 31% y/y. Outbound loads from Canada to the United States fell slightly by 4% m/m in December and were down 34% compared to the previous year. However, spot market loads from Canada to the U.S. have started off 2023 with a flurry of activity. In the two largest Canadian spot markets, load posts were up 16% w/w in Toronto and 14% w/w in Alberta, while in British Columbia, volumes surged, increasing by 42% w/w. Dry van rates at $1.63/mile last week, are averaging around $0.20/mile higher than the previous year for loads from Vancouver to Boston. In Calgary, loads to Fresno were paying $1.17/mile, $0.10/mile higher than the December average but $0.26/mile lower than the previous year.
On the high-volume intermodal lane between Los Angeles and Chicago, truckload capacity continues to loosen following the plunge in West Coast imports, recording the fifth straight month of double-digit percentage declines in import volumes. At $1.63/mile last week, dry van rates on this lane are precisely half what they were a year ago when the Ports of Long Beach and Los Angeles were experiencing record congestion levels.
Load-to-Truck Ratio (LTR)
Martin Luther King Day brought the third short shipping week in the last month resulting in lower spot market volumes than the previous week. Volumes were 62% lower w/w and around 7% lower than the Week 3 average over the prior last six years. Carrier equipment posts were 53% higher than the same short week last year and 45% higher than the previous six-year average. As a result, last week’s dry van load-to-truck ratio (LTR) decreased by 42% w/w from 4.20 to 2.42.
Linehaul Spot Rates
The national average dry van rate is following a very similar path to early 2020, where following the over-supplied 2019 market, spot rates fell as the industry continued to shed capacity right up until the Pandemic began. At $1.85/mile, linehaul rates are $0.87/mile lower than the previous year following last week’s $0.07/mile decrease. Last week’s national average was still $0.26/mile higher in 2020. The national average linehaul rate was $0.25/mile lower than the top 50 dry van lanes based on the volume of loads moved, which averaged $2.12/mile last week.