Los Angeles (Reuters) – Walmart (WMT.N) It said it is boosting the initial payment for the 12,000 long-distance truck drivers who deliver merchandise to its stores and Sam’s Club locations amid a driver shortage in the United States that threatens to lengthen the supply chain and merchandise shortages.
Qualified drivers — who tend to be in their late 40s and 50s, according to government and industry officials — remain in short supply. Federal limits on daily working hours, the COVID-19 pandemic and other obstacles have prompted many truck drivers to quit.
Walmart Inc is also following up on rival Amazon.com Inc (AMZN.O) In motivating employees in other roles to retrain for on-demand transportation jobs required to relieve supply chain bottlenecks and support their online operations.
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Walmart drivers were already among the best compensated drivers in the country. Now the world’s largest retailer is raising pay by resetting its starting truck drivers salaries to $95,000 to $110,000 a year, from $87,500 previously.
That’s far above the average 2020 wage of $47,130 for large US rig drivers, whose “real” earnings have fallen behind inflation and remain effectively at about 70% of what they were in the 1970s, according to the US Bureau of Labor Statistics. According to the bureau, about 1.9 million drivers of large excavators roam the country’s roads.
Walmart’s move could boost its competitive advantage at a time when safe and experienced drivers with 18 wheels are unavailable, and with Amazon building its own network of trucking contractors. Read more
“We are proud to announce a salary increase to ensure Walmart remains one of the best companies in the world to pursue,” Carissa Sprague, Walmart’s vice president of human resources for supply chain, said in a statement.
Consumer demand for everything from food to furniture has skyrocketed during the pandemic. This has strained resources – from truck availability and seaport capacity to warehousing and distribution space – impeding the flow of goods and increasing costs.
The company said that Walmart’s supply chain costs alone, were $400 million higher than expected in the fourth quarter ending Jan. 28, which included the all-important holiday shopping season.
Recent data suggests that pandemic demand may be slowing.
Commerce Department data released last week suggested purchases of physical goods fueled by the pandemic may have peaked as consumers resume spending on travel and leisure. Read more [Graphic: https://tmsnrt.rs/3IPvXEI]
Walmart continues to invest aggressively in Walmart.com, and is following Amazon in creating a path for employees to transition into transportation jobs to support e-commerce logistics.
Walmart’s 12-week trucking training program allows employees to obtain their commercial driver’s license and become drivers of Walmart’s entire private fleet. Walmart collects approximately $4,000 to $5,000 in the cost of this training.
The company, which pays signing bonuses that can exceed $10,000, hired 4,500 truck drivers last year, bringing its number of truck drivers to about 12,000. It has already graduated 17 new drivers from classes in Texas and Delaware, and plans to expand the program this year with the goal of training Between 400 and 800 drivers transport goods to more than 5,300 Walmart and Sam’s Club stores in the United States.
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(Reporting by Lisa Bertlin in Los Angeles and Arianna McLemore in New York; Editing by Jonathan Otis
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