Arriana McCLymore, Lisa Baertlein

LOS ANGELES, (Reuters) – Walmart (NYSE) announced it was increasing the starting salary for 12,000 of its long-haul truck drivers. This is in response to a shortage of U.S. drivers which could lead to merchandise shortages and supply chain snarls.

According to officials in the industry and government, there is a shortage of qualified drivers. They tend to be late 40s or 50s. Many truck drivers have quit because of federal limits on their daily work hours and the COVID-19 epidemic.

Walmart Inc. (NASDAQ: ) is following Amazon.com Inc.’s lead in encouraging employees to take on other jobs in order to train for transportation jobs that are in demand to help ease supply chain bottlenecks, and to aid their online business operations.

Walmart’s truck drivers have been among the highest paid in the country. The world’s largest retailer has increased the compensation for truck drivers by increasing their starting wages to $95,000-110,000 annually, up from $87,500.

This is more than the 2020 median salary of $47 130 for American big-rig driver. Their “real” earnings are below inflation, and in fact remain about 70% of the level they were in 1970s. According to U.S. Bureau of Labor Statistics. According to the bureau, there are approximately 1.9 million drivers of big-rigs who ply America’s roads.

Walmart’s decision could help it gain a competitive advantage in an era when skilled 18-wheeler drivers and Amazon building their own network of trucking contractors are hard to find.

Karisa Spague, Walmart’s senior vice-president for supply chain and human resources stated in a statement that “We are proud to announce raises to ensure Walmart continues to be one of the most enjoyable companies to drive for.”

The pandemic saw a surge in consumer demand for furniture and food. This caused a surge in demand for everything, from furniture to food to seaport capacity and truck availability to warehouse space and distribution spaces. It also slowed down the flow of goods which led directly into higher prices.

Walmart’s supply chain costs were 400 million higher than what was expected for the quarter that ended on Jan. 28. This included the holiday season.

According to recent data, pandemic demand could be cooling.

Commerce Department data last week indicated that consumers are returning to spending on entertainment, rather than pandemic-fuelled purchases of physical products. [Graphic: https://tmsnrt.rs/3IPvXEI]

Walmart.com continues to be an aggressive investor. Walmart is also following Amazon’s lead in creating pathways for workers to move to transport jobs in support of e-commerce logistics.

Walmart provides a 12-week training program in trucking for employees. It allows them to obtain their commercial driver license and become fully-fledged Private Fleet Walmart drivers. Walmart pays for the training, which costs between $4,000 and $5,000.

Signing bonuses of up to $10,000 are paid by the company. Last year’s record hiring was for 4,500 truck drivers. This brings its total trucker force to approximately 12,000. The company has already graduated 17 drivers who were from Texas and Delaware. It plans to increase the number of drivers this year, with 400 to 800 new graduates to the program to transport goods to the more than 5,300 Sam’s Club and Walmart stores in the United States.