Walmart has been forced to dramatically increase the starting salaries of truck drivers in order to keep the retailer’s supply chain going after the industry shed 4,900 drivers in a single year.
The nation’s largest retailer has also launched a retraining program to give employees who work in its distribution centers the chance to become certified Walmart truck drivers by completing a 12-week program taught by the company’s drivers.
Walmart, based in Bentonville, Arkansas, has confirmed it is raising the starting salaries salary from $87,500 to between $95,000 and $110,000, according to Walmart spokeswoman Anne Hatfield.
The new salaries were announced on Thursday as a national trucker shortage puts severe pressure on freight movement throughout America.
The American Trucking Association estimates that the U.S. is short by about 80,000 drivers.
Walmart said about 20 workers in Dallas and Dover, Delaware, have earned their commercial driver’s licenses by completing the 12-week training course.
About 400 to 800 workers in the company’s supply-chain network are expected to complete the truck-driving program this year, Hatfield said.
The starting range for new truck drivers employed by Walmart will now be in between $95,000 and $110,000, compared to the $47,130 median average in the US – a whopping 80 percentage difference
Walmart aims to internally hire hundreds of supply-chain workers to its truck-driver training program by the end of this year
In the year to March 2022, the trucking industry lost 4,900 jobs, according to the the U.S. Bureau of Labor statistics.
The decline coincided with growing jobs in the service industry as the number of COVID cases in the U.S. dwindled.
Walmart and other nationwide retailers, including Amazon, Costco and Target, have increased their profit margins during the coronavirus pandemic, as demand for items such as basic household commodities and furniture soared, requiring more supply-chain workers on the front lines.
Simultaneously, the increase in demand fueled freight bottlenecks, especially in the transportation of goods by sea, resulting in chaos in some of the biggest ports of the US, including in New York City, Los Angeles and Long Beach.
‘We want to make sure we continue to attract drivers, but also retain’ employed drivers, Karisa Sprague, senior vice president in Walmart’s human resources, told the Wall Street Journal.
In the last two years, Walmart has a hired 7,000 drivers for its internal fleet, with 4,500 joining in 2021 – meaning the retailer now has 12,000 drivers on its payroll.
‘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,’ Sprague added.
Walmart, considered as the leading retailer by revenue in the nation, has consistently been paying its truck driver higher than the industry media – a change of heart from the company’s early days when executives back then believed a large internal fleet would speed up transportation and save costs.
Walmart wants to take the competitive edge and have the biggest fleet of truck drivers in the country ahead of other retailers, including Amazon. The retail giant already leads in increasing the most revenue in the industry over the coronavirus pandemic
In the U.S., the average salary for 18-wheeler drivers and tractor-trailer operators was $47,130 in 2020, the latest data on the matter published by the Bureau of Labor Statistics. Since 2016, the median pay in the country has risen by about 3 percent to 4 percent on a yearly average.
The decision to ultimately hire more truck drivers comes at a time when Walmart is trying keep up its pace regarding speedy delivery. The company also wants to save costs and hire from within, as well as create new opportunities for internal career growth, Sprague said.
So far this year, 17 Walmart workers have made the switch from working at the company’s warehouse operations to integrating its truck-driver training program, Sprague added. The company’s goal is to internally hire a few hundreds of workers by the end of the year.
The average cost of Commercial Driver’s License (CDL) training is between $3000 and $7000, according to online research.
‘We know that the industry isn’t necessarily building more drivers, but we want to be able to continue the growth of our private fleet,’ Sprague said. ‘We need to find multiple ways to do it.’
Walmart’s desire to increase staff numbers comes at a time when most retailers are struggling to stock up their stores and deliver purchases to consumers while facing a deficiency in employees and delivery drivers.