ATA: Turnover Drop ‘Significant’

Truck driver turnover rates fell to a four-year low in the first quarter among larger fleets and declined 12 percentage points at larger and smaller fleets alike, American Trucking Associations reported last week.

The decline among fleets with $30 million or more in revenue to 84% from 96% puts those fleets’ annualized churn rate at its lowest point since the second quarter of 2011. Smaller fleets’ turnover was 83%, sliding from 95%. The last time smaller fleets had a lower churn rate was in the first quarter of last year.

The decline, the sharpest drop in nine quarters for both groups, was announced at a time when the federation’s truck tonnage growth has been easing, reaching its slowest year-over-year pace of growth, at 1.8%, in its latest report.

“Clearly, the decline in driver turnover in the first quarter was significant,” ATA Chief Economist Bob Costello said, without pinpointing a single factor.

“The drop in turnover was likely, at least partially, connected to a temporary slowdown in freight movements in the quarter as well as improved retention efforts at fleets across the board.” While welcoming the first-quarter drop, Costello said that increases could resume in the future because of the persistent driver issues.

“Trucking is experiencing a driver shortage that is going to become more significant,” Cameron Holzer, president of CRST Expedited, told Transport Topics on July 16, noting that his unit has experienced the lower turnover evidenced in ATA’s latest report.

“Reducing turnover will mitigate some of that shortage and will help to offset the shortage of new hires, but we will still have a pretty material driver shortage,” said Holzer, whose company is the largest unit of CRST International, based in Cedar Rapids, Iowa. CRST is No. 25 on the Transport Topics Top 100 list of for-hire carriers in the United States and Canada.

“We recognize that it is much more difficult to attract drivers than in prior years,” he added, noting that the company was proud of its significant turnover reduction. He didn’t specify an amount.

“As that has become more difficult, we have applied a lot more resources to retain drivers,” Holzer said, pointing to two pay increases in recent months and a doubling of its dispatcher ranks.

The latter step was meant to give drivers and dispatchers more time to work with each other, he said.

Holzer added that all other units of CRST have made the same driver-related transformation in their businesses.

Industrywide, driver pay increases are a factor in retention and turnover, said Costello and consultant Mike Regan, chief of relationship development at TranzAct Technologies.

Regan noted that the increases can persuade drivers to stay.

“Trucking companies, especially large ones, are getting lethally serious about recognizing that drivers are their most important asset,” he said.

Those who have not raised pay may be feeling a greater pinch with the driver shortage, Costello said.

“Not all carriers boosted pay, and those that didn’t might have lost drivers, thus increasing turnover,” he said. In fact, some fleets are choosing to keep a driver and lose a customer if the shipper mistreats a driver, Regan said. He cited a recent report by J.B. Hunt Transport Services Inc. about shippers’ detention practices that dramatized the importance of using drivers productively.

Tom Kretsinger Jr., president of American Central Transport, said July 16 that his company’s turnover is below the numbers in ATA’s report while stressing that “turnover is definitely a problem.”

“We spend more and more money on it every day,” he said, “and I still don’t have the drivers that I want to have.”

The ACT official noted a demarcation in his driver ranks.

There is a dependable core group who don’t switch to other fleets. However, Kretsinger said attrition does affect this group due to health reasons, retirement or because they die too young.

Like other fleets, he said there can be problems with new driver hires who too often have jumped among multiple jobs in a short period and leave within three months after being hired.

“There is a quantity issue and a quality issue with drivers,” he said. “Predominantly, the issue is quality more than quantity.”

Regan cited one other potential factor relating to the defection of drivers from trucking to construction or other jobs that keep them home more often.

“If the economy is weak as it is now, there are fewer opportunities for truck drivers to find jobs outside the industry,” he said.

Chronic turnover and shortage troubles have sparked a variety of supplier initiatives to improve retention.

One of the latest ones was the creation this year of Haulin’ DPS — the letters stand for Driver Performance Solutions — a joint venture of two Atlanta-area companies. Trucking consultant Atadex and Fusion Marketing, which specializes in employee-related issues, formed the business to adapt successful techniques to trucking, Michael Ruge, senior vice president at Fusion, said last week.

“What we know is what works in other industries,” Ruge said, such as quick problem resolution and being upfront with workers to treat them as partners rather than as a necessary evil.