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Introduction

The functioning of the nation’s economy depends in large part on the safe and efficient transportation of goods and passengers by commercial motor vehicles. As defined in federal statutes and regulations, commercial motor vehicles include trucks with a gross vehicle weight rating (GVWR) of more than 10,000 lb and buses and vans that can carry 9 or more people in commercial passenger service.¹ Heavy trucks, which include tractor-trailer combinations, are defined as having a GVWR of more than 26,000 lb. Tractor-trailer trucks dominate the long-distance freight trucking industry whose business generally involves transporting shipments distances of 150 miles or more. Of course, tractor-trailer trucks are also used extensively for hauling freight locally and regionally. Commercial motor vehicles used for passenger service include a wide array of buses and vans, including jitney and shuttle buses, public transit buses, school buses, and large motorcoaches. Many jitney, shuttle, public transit, and school buses are used exclusively for local and regional transportation, whereas motorcoaches, which can seat 30 more passengers, are the dominant bus type used for intercity and other long-distance passenger transportation, although they too are used heavily for local and regional transportation.

The Federal Motor Carrier Safety Administration (FMCSA) is responsible for overseeing and regulating the safe operation by motor carriers of the nation’s diverse fleets of commercial vehicles. The agency establishes

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¹ The GVWR, considered the maximum weight for safe operation, is the combined weight of the empty vehicle, cargo, fuel, driver, and passengers. The definition of a commercial motor vehicle, for regulatory purposes, is found in 49 CFR 390.5.

and enforces federal standards for vehicles and equipment and their inspection, repair, and maintenance, as well as driver qualifications, training, and health and safety.² A prominent example of FMCSA’s role in overseeing driver health and safety is its longstanding authority to limit the on-duty time of drivers through hours of service (HOS) regulations, which restrict the amount of time a driver can be on duty and operating a vehicle and also specify rest periods to help ensure that drivers stay awake and alert when driving. The agency’s authority to regulate HOS dates back (and was inherited from other agencies) to the enactment of the Motor Carrier Act of 1935.

Although FMCSA has authority to regulate the on-duty time of commercial vehicle drivers, it has never regulated how truck and bus drivers are compensated for their work, nor has it sought to establish a factual basis for understanding how different types of compensation methods may affect driver behavior, health, and safety performance. In Section 23022 of the 2021 Bipartisan Infrastructure Law, Congress called on FMCSA to commission this National Academies of Sciences, Engineering, and Medicine (the National Academies) study to survey and assess what is known about the effects of existing driver compensation methods on safe driving as well as on rates of driver retention by truck and bus operators. Although the legislation does not specify which of the many transportation sectors that use commercial motor vehicles should be examined, the focus of the study, for reasons given below, is on the long-distance, for-hire transportation of freight by carriers using tractor-trailers and the intercity transportation of passengers by carriers using predominantly motorcoaches in charter and scheduled service.

Because tractor-trailer trucks and motorcoaches are ubiquitous on the nation’s highways, they receive a significant amount of public policy attention to monitor and ensure their safe operation. According to statistics collected by the National Highway Traffic Safety Administration (NHTSA), the nation’s fleet of heavy-duty combination trucks, composed mainly of tractor-trailers, was involved in 3,416 fatal crashes in 2021.³ These trucks averaged 1.75 fatal crashes per 100 million miles driven in 2021, down from 2.57 in 2000 but up from a historic low of 1.27 in 2009. Although fatal crash statistics are not available for intercity motorcoaches specifically, the data are compiled for large buses in general. NHTSA reported 204 fatal crashes involving large buses in 2021, an average of 1.22 fatal crashes per

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² See 49 CFR Parts 300–399 for the body of applicable regulations.

³ Large Truck and Bus Crash Facts 2021, Vehicle Table 16, www.fmcsa.dot.gov/safety/dataand-statistics/large-truck-and-bus-crash-facts-2021.

100 million miles driven, down from 4.26 in 2000 but up from a historic low of 1.10 in 2020.⁴

The passenger transportation industry that uses motorcoaches is dominated by companies that provide both local and long-distance charter services and by companies that mainly provide regional and long-distance intercity service on a posted schedule. The trucking industry segments that use tractor-trailers generally move freight in either truckload (TL) or less-than-truckload (LTL) shipment sizes. TL carriers typically transport a single semi-trailer-sized shipment directly from its origin to its destination, often across state lines when providing long-distance service. LTL carriers transport smaller shipments of mixed freight to and from multiple origins and destinations by providing pickup, linehaul, and local delivery services. They too operate over long distances, regionally and nationally. Because of their more complex mix of services and their network of terminals for rehandling shipments, LTL carriers tend to be larger in size and much fewer in number than TL carriers. Parcel and small package service, as discussed in the next chapter, is a highly specialized form of LTL shipping.

TL carriers include many large national and regional firms and thousands of owner-operators who operate single truck tractors or small fleets of truck tractors and trailers, sometimes under contract with larger TL companies. Tractor-trailers are also operated, both long-distance and locally, in private fleets managed by companies to move the goods they produce or distribute, such as grocery store and filling station chains. Hence, the trucking industry consists of TL and LTL for-hire carriers and private carriers, and only the for-hire segment transports freight as a main line business. It merits noting, however, that large for-hire TL companies will often provide dedicated service under contract with a shipper and therefore operate much like a private carrier.

According to the Bureau of Labor Statistics, there were 917,000 drivers in the for-hire trucking industry in May 2023.⁵ This figure does not include drivers for companies that transport parcels and small packages, in addition to not including drivers in private fleets. By comparison, there were only 11,690 drivers of charter buses and 7,290 drivers of intercity buses in May 2023.⁶

Drivers in the intercity bus and long-haul trucking industries are compensated differently. Many intercity bus drivers are paid by the hour, and some charter operators, when providing tours, may also receive gratuities from passengers. By comparison, drivers in the long-distance TL sector are

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⁴ Large Truck and Bus Crash Facts, 2021, Vehicle Table 22.

⁵ Code 53-3032: Heavy and Tractor-Trailer Truck Drivers, www.bls.gov/oes/current/oes533032.htm.

⁶ See www.bls.gov/oes/current/oes533052.htm.

usually compensated according to miles driven with a load, but other compensation methods are also used, including pay by the load or pay based on a percentage of the revenue generated from transporting a load. Drivers who are employed directly by a carrier will often get paid by the mile, whereas owner-operators who lease their driving services and equipment to a carrier (i.e., “leased-on” drivers) may get paid by the mile or based on the revenue generated by the load. Drivers operating independently obtain their own revenue-generating loads to recoup their operating and capital expenses including the time spent driving. As a general matter, the revenue received by these owner-operators and all other long-distance TL carriers for transporting a tendered shipment is related to the distance from the load’s origin to destination.

Compensation in the long-distance for-hire TL sector is therefore mostly output-based (miles driven, loads transported) rather than time-based, and can be characterized as variants of “piece work” or “piece rate” pay. To some degree, hourly pay and other non-piece-rate forms of compensation (such as salary) are offered by private carriers and for some LTL work such as local driving for shipment pickup and delivery services. As will be explained in the report, however, the work requirements and conditions in these sectors differ significantly from those in long-distance TL operations.

In all sectors of the trucking and intercity bus industries, drivers can also receive other forms of compensation, including nonwage health and leave benefits and bonuses for violation-free driving and longevity. In the case of long-distance TL drivers, they may be paid extra for excessive time spent (usually beyond 2 hours) waiting for their shipments to be loaded and unloaded, known as pay for detention time. Additional information on these forms of rewards are provided in the report.

STUDY ORIGINS, CHARGE, AND APPROACH

Section 23022 of the 2021 Bipartisan Infrastructure Law⁷ calls for a study “of the impacts of various methods of driver compensation on safety and driver retention, including (a) hourly pay; (b) payment for detention time; and (c) other payment methods used in the industry as of the date on which the study is conducted.” Section 23022 further provides that the study should be informed by consultations with labor organizations representing commercial motor vehicle drivers and with representatives of the motor carrier industry, including owner-operators.⁸

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⁷ Public Law 117-58, November 15, 2021.

⁸ Section 23022 consists of two parts: the request for this study and direction for the creation of a pilot program to allow drivers aged 18 to 21 to operate heavy-duty trucks in interstate commerce.

Based on this legislative text, FMCSA and the National Academies agreed on the Statement of Task, or study charge, shown in Box 1-1. This remit, to be fulfilled by an expert committee, focuses on the long-haul freight trucking and intercity passenger bus sectors. It calls for an examination of the methods currently used to compensate drivers in the two industries, including non-wage rewards, with consideration also given to driver working conditions. It also calls for a review of available research and the identification and collection of data, to the extent possible, to determine if and how alternative compensation methods may affect both driver safety performance and the ability of carriers that provide long-distance trucking and intercity bus services to retain drivers. If there is good reason, based on a review of the empirical evidence and any identified limitations of that evidence, the report is expected to contain recommendations for data-gathering, analytic methods, and research designs that may be helpful for furthering understanding of the effects.

To conduct the study, the National Academies appointed an interdisciplinary committee whose members possess expertise in commercial motor carrier operations, safety regulation, transportation economics, statistics,

freight planning, and transportation logistics. After reviewing the study charge and its emphasis on intercity bus and long-distance truck operations, and after consulting further with FMCSA, the committee chose to focus on the for-hire long-distance TL sector as opposed to private and LTL carriage. As noted above, the TL sector, which is the largest single segment of the trucking industry, is predominantly a long-haul business unlike the other two major segments, which have significant local operations. Moreover, the concerns about compensation methods germane to this study, which are centered on driver retention and safety performance impacts, are most salient to the TL sector. Because drivers in the long-distance TL sector are usually paid by the mile driven or by other piece-rate methods, and seldom paid directly for hours worked, this has raised concerns about whether drivers who are intent on providing that output (i.e., delivering the load) in a timely manner may engage in unsafe driving behaviors, such as by speeding to maximize miles driven within regulated driving hours. The TL sector also has a history of persistently high rates of driver turnover, raising questions about the effect that compensation methods may have on driver retention.

To inform its work, the committee spent considerable time early in its deliberations reviewing the literature, searching for relevant and publicly available data, and consulting experts and interested parties. The committee met with commercial motor vehicle safety experts, researchers who had studied driver compensation methods and their potential impacts on driving behavior and retention, truck safety experts and advocates, officials from driver labor unions, and representatives of the major trucking and bus industry associations, including the trade group for TL owner-operators. The committee also met with officials from FMCSA and the U.S. Department of Labor.

The study committee also commissioned supportive work. Significantly, the committee commissioned interviews with long-distance truck drivers at large truck stops to obtain their perspectives on their compensation and working conditions and their influence on driving behavior and driver turnover. The interviews were conducted at two truck stops in different parts of the country (Ohio and Texas) on Interstate highways with large amounts of long-distance truck traffic. The interviews, documented in Appendix A, filled a void in the committee’s ability to meet with and hear from a wide selection of truck drivers during its information-gathering sessions held in conjunction with committee meetings.

Although anecdotal, the comments from truck drivers illustrate the kinds of concerns that presumably prompted the request for this study. For instance, with regard to pay per mile and safety, one of the drivers said: “Well, if you’re hourly you can focus on safety first. If you’re paid by the mile, your natural instinct is to focus on how much how quickly you can get it done.” Another driver said: “The big problem is that people are chasing

the dollar. The truck don’t make no money unless the wheels are turning. So if they get hung up they gotta run to try to catch it up and then they put people’s lives in danger.” Yet another driver said: “A big portion of it is we’re not incentivized to be safe [when] paid per mile. So the faster you go, the better you are off money wise.”

The interviews also suggested how pay and working conditions can relate to driver retention, and especially the issues of irregular pay, varied schedules, and time away from home. For instance, one driver said: “They don’t respect our home time. They want us to ride when we hire or they try to rush us to get to a delivery or pickup. Yeah. Sometimes it [is] the pay. Yeah, yeah. Sometimes because their truck is raggedy.” Another driver said: “[He is] not too happy because [the paycheck is always delayed] like this month. I should have been paid this month on the first. I still not get paid. Last month … it was the whole month I didn’t get paid yet, the whole month. That’s not good. Next job, people should pay … less waiting time.” And yet another driver said: “There’s a waste management company that’s not even eight minutes away from my place. And if I go there with a Class A, I can easily make probably 24 to 25 bucks an hour and be home every single day. And off the weekends.”

The truck driver interviews provided the committee with helpful context, but of course they could only supplement and not substitute for the kind of empirical research and data needed to assess possible causal relationships among compensation methods, working conditions, safe driving behavior, and driver retention. That information, as explained in the report, proved elusive. The committee nevertheless tried to fill the void in information, which was needed at the very least to describe and confirm truck driver compensation methods. To this end, the committee explored the availability and adequacy of existing compensation survey data, including data collected by the American Trucking Associations and other industry and nongovernmental sources. These efforts yielded little in terms of useable data, but the committee was able to hire a consultant to review the results of a private national survey of trucking companies to summarize the compensation and benefits offerings of several large companies.

The committee also conducted an empirical analysis of how the characteristics and practices of TL carriers correlate with safety-related outcomes, as indicated by reported crashes, moving traffic violations, and HOS violations. This analysis is presented in Appendix B.

Although these analytic and information-gathering efforts yielded insights relevant to the study charge, the committee’s work was generally hampered by a paucity of empirical evidence and data. Notably, the propriety nature of carrier compensation schemes and records was problematic for obtaining the data needed to relate pay methods to safety-related outcomes, such as carrier crash and violation rates. A more fundamental

challenge, however, is that compensation methods are largely uniform in the long-distance TL sector (mostly variants of piece-rate pay) so as to present limited opportunities to observe their respective effects by comparing the experience of carriers using different pay methods. Where hourly pay and other non-piece-rate forms of compensation are used to some degree in private and LTL carriage, the working conditions in these sectors differ significantly from those in long-distance TL sector so as to severely limit the analytical value of cross-sectoral comparisons.

The bulk of the committee’s time and effort was spent on the long-distance TL sector, rather than the intercity bus industry. In consulting the research literature, safety reports, academic experts, representatives of the bus industry, and officials from FMCSA’s Passenger Carrier Division, the committee did not find a body of research or data sources that could be used to assess the effects of bus driver compensation methods nor did it surface any concerns about potential relationships between these methods and safety. Long-distance TL trucking and intercity bus operations have very little in common, such that discussing and analyzing them together would have made little sense and been confusing. For these reasons, the committee decided to treat the TL and intercity bus sectors separately, while paying more attention to the former.

Finally, the focus of the study is on existing compensation methods in the long-distance trucking and intercity bus industries, as directed in the legislation calling for the study. The report, therefore, does not propose alternative forms of compensation or consider how new compensation regimes may emerge, apart from providing background on the debate about the use of freelance workers in the “gig” economy, which has raised questions about trucking companies contracting with owner-operators for driving services. The current compensation structure in long-distance trucking, as this report explains, has roots that extend back decades and that became entrenched after the country’s transportation industries were economically deregulated during the 1970s and 1980s. Whether the current practices will persist is an open question that may depend on developments outside the transportation sector. In the nearer term, this could include legal and policy challenges to the use of contract drivers. In the longer term, the regime may be disrupted by technological advances, up to and including the commercialization of driverless trucks and buses to achieve safety benefits and savings in labor costs.

REPORT ORGANIZATION

The remainder of this report is organized into six chapters. Chapter 2 provides background on the long-distance for-hire TL sector and its operations and describes the truck driver workforce. It also describes the regulatory

environment for the long-distance trucking industry by providing an overview of the main bodies of pertinent federal regulations governing safety and labor standards. Chapter 3 also provides background by describing the types of compensation used in the long-distance TL sector, distinguishing between piece-rate forms of compensation and non-piece-rate forms. The chapter also describes the work requirements and conditions experienced by drivers in the long-distance TL sector.

Chapter 4 focuses on driver retention in the long-distance TL sector and explains the role that compensation methods, working conditions, and complex economic forces can have on the rates of driver retention and turnover. Chapter 5 reviews the research and empirical evidence about how compensation methods, non-wage rewards, and work conditions can affect safety in the long-distance TL sector. Issues associated with driver compensation, safety, and retention in the intercity bus industry are considered in Chapter 6, albeit to only a limited degree because of a dearth of information. Chapter 7 summarizes the key conclusions from the study and contains the committee’s recommendations pertaining to follow-on research. This chapter concludes with ideas for research and data collection that FMCSA could pursue to further the recommendations.

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