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The ABC's of driver pay

Published Tuesday, March 01, 2005

A few years ago a growing, high-profile private fleet faced a labor crisis. Driver hourly rates and overtime costs were rising, while productivity was falling. For a private fleet running some 8-million miles a year to serve more then 67 stores, high labor costs represented “low hanging fruit” for a potential third-party carrier takeover. “Our driver costs made our fleet ripe picking for outsourcing,” said one of the fleet managers. “We needed to take action — and quickly.” The solution — which took nearly two years to fully implement — was Activity-Based Compensation (ABC). Productivity-based paychecks had arrived.

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