Welcome to the Logistics Liaison, a monthly briefing on the top supply chain issues in wholesale distribution. I’m Vesna Brajkovic, Senior Editor at MDM and a former transportation reporter. Each month, I’ll dive into a logistics/transportation topic and dip into my industry contacts to help break down how it affects your business. This month: fleet employee salaries.
With even a glance at your P&L, I’m sure two numbers practically jump off the page — transportation costs and employee wages. And if you’re running an in-house fleet, these two cost centers go hand-in-hand. Let’s dive into some of these numbers and see how your business stacks up.
The most current data from the Bureau of Transportation Statistics shows that the wholesale distribution and retail trade sector requires more transportation services than any other sector to product one dollar of output. When you break down the numbers, that means for every $1 of goods sold or produced in the sector, 9.9 cents were spent on transportation.
While the bureau (unfortunately for us) lumps together wholesale distribution with the consumer retail sector, the combined numbers still illustrate the cost and dependence distributors have on transportation.
Of that 9.9 cents in transportation costs, 4.7 cents were spent on in-house transportation and 5.2 on for-hire transportation
The means the wholesale (and retail) sector relied more on for-hire transportation. But for those of you who do operate an in-house fleet, let’s explore the staff positions that keep it running, and benchmark how your employee salaries compare.
Compensation of Distribution Fleet Employees
In a study, sponsored by 13 distribution-related associations, Industry Insights collected salary and benefits information from across the wholesale distribution industry. Below I’ll highlight the transportation-related results from that study.
Drivers/Delivery Personnel
On average, drivers and delivery personnel are paid $52,810. Distributors pay drivers a base salary of between ~$51,000 and $56,000. Including additional cash compensation brings some total compensation up to nearly $60,000 on the high end.
There was little variation in total compensation (base salary + additional cash compensation) for drivers between those employed at public and private companies; private companies paid $2,489 more on average.
Editor’s side note: It’s worth noting here some other survey results from the National Private Truck Council (NPTC). In a 2024 survey of private fleet drivers, the average compensation of medium-duty operations was at an all-time high of $77,000, up from $68,150 in 2023. While NPTC did survey private in-house fleets, it’s survey results do not reflect the compensation levels of distribution companies in particular. Still, about 21% of the survey respondents operate medium-duty trucks, and I would consider those respondents to be the most comparable to the fleets of distribution companies. Why does it matter? Perhaps that compensation level can give a small indication of what your drivers can expect to find in the job market at private fleets in different sectors, such as retail.
Freight/Transportation/Fleet Managers
Meanwhile, freight managers receive a total compensation of $73,392 on average (with compensation between ~$60,000 and $84,000); transportation/traffic managers receive $87,435 (with compensation between $73,000 and $108,000); and service/fleet managers receive $89,044 (with compensation between $77,000 up to $110,094).
Highlighted findings:
- By region, distributors in the Northeast region pay the most on average for drivers and freight managers.
- Distributors with annual sales of between $501 million to $1 billion pay the highest compensation for service/fleet managers and transportation/traffic managers.
- The highest average total compensation among all transportation-related positions included in the survey was $110,094 for a service/fleet managers, followed by $108,320 for transportation/traffic managers.
- The lowest average total compensation among all transportation-related positions included in the survey was $43,671 for drivers/delivery personnel.
This information comes from a 2024 Cross-Industry Compensation & Benefits Study. It is a paid report provided by the National Association of Wholesaler-Distributors, and is available in the MDM Store.
In the Store: NAW’s 2024 Executive Compensation Study
Want to dive deeper? This article highlights only a selection of the operations/warehouse data within the report, but the larger report includes distribution-industry compensation data for executive level positions, sales and marketing, information technology and more. Each average listed in the article is also broken down by annual sales, region and public/private companies within the full report.
Stat Check
This section of MDM’s Logistics Liaison includes key indicators which together help gauge the health of the supply chain.
🚛 Trucking: Higher diesel prices and weak freight rates, volume and utilization caused FTR’s Trucking Conditions Index in January to fall -2.56, almost of mirror image of December 2024’s +2.67 reading.
🚂 Rail: In February, AAR’s Freight Rail Index rose 1.8% over January, despite weather-related constraints on volume. This increase points to continued rail resilience despite economic uncertainty and potential headwinds.
🚢 Ports: Drewry’s North American Container Port Throughput Index fell 3.4% MoM to 111.2 points in December 2024. NRF’s Global Port Tracker logged 2.22 million TEUs in January, up 4.4% from December 2024 but up 13.4% YoY.
📦 Freight: The shipments component of the Cass Freight Index recouped some losses in February, up 10.5% MoM, almost half of which was normal seasonality. Some improvement was likely from pre-tariff shipping.
🏭 Manufacturing: ISM’s March 3 Manufacturing PMI reading showed a regression during February after expanding in December and January, down 0.6 points month-to-month to 50.3%. Still in expansion territory (anything above 50.0%), it followed a February that saw the PMI’s first expansion mark since March 2024 after 26 straight months of contraction and its highest reading since October 2022. Five industries reported contraction in the month: Furniture & Related Products; Textile Mills; Nonmetallic Mineral Products; Computer & Electronic Products; and Machinery.
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