Driver Turnover Levels Off as Economy Pauses in 4Q
This story appears in the March. 18 print edition of Transport Topics.
The long rise in driver turnover paused with the U.S. economy during the fourth quarter, as large fleet churn increased by just two percentage points on a year-over-year basis, American Trucking Associations reported last week.
Turnover at truckload fleets with $30 million or more in revenue stood at 90%, just above the 88% pace in the final quarter of 2011. ATA’s announcement on March 13 also said turnover for these fleets slipped 14 percentage points from 104% in last year’s third quarter.
Smaller truckload fleets’ turnover reached 76% in the fourth quarter, which was higher than the 55% in the final quarter of 2011 but also was 18 percentage points below the 2012 third quarter. The sequential drop for fleets with revenue below $30 million was from 94% to 76%.
“Weak freight volumes and the economy contributed to the slide,” said Bob Costello, senior economist for ATA. “This is just a respite from the long-term trend and driver shortage storm that’s coming when the freight economy accelerates.”
Gross domestic product in the United States rose at only a 0.1% annual pace in the fourth quarter. The hesitation, possibly tied to federal fiscal policy uncertainty, was mimicked by a slight rise of about 2% in ATA’s tonnage index during the period.
Costello noted that even the sequential pullback left turnover at high levels, compared with recent years.
For the year, larger fleet turnover averaged 98%, the highest since 2007. Smaller fleets’ pace for the year was 82%, also highest since 2007.
The full-year totals also were substantially higher than 2011 in both categories as larger fleets that year averaged 68% and smaller ones 52%.
ATA also reported that less-than-truckload carrier turnover remained low, finishing the year at 10%, compared with 7% in the final quarter of 2011 and 8% in the third quarter.
Steve Sichterman, vice president of driver recruitment firm TripPak Services, Brentwood, Tenn., linked turnover levels to both driver perception and freight demand.
“There is still the uncertainty in both the economy and trucking,” he told Transport Topics on March 13. “People aren’t believing yet that they’re back.”
“We are near the tipping point,” Sichterman said, where freight levels are solid enough that drivers are tempted to move. “But we are not there yet.”
“There is a fine line,” he added. “If drivers feel confident about freight, they tend to move.”
Fleets at the Truckload Carriers Association annual meeting earlier this month made anecdotal comments that freight volumes were improving early in 2013 after several months of relative balance between freight volumes and capacity as evidenced by January’s record level for ATA’s tonnage index.
The driver situation could get worse as the year develops.
There has been a measurable drop in applications from potential new hires that could make it much more difficult to fill positions should turnover rise again, TCA attendees said.
For example, U.S. Xpress Enterprises has seen applications fall more than 20%, CEO Max Fuller told TCA attendees.
“We are hearing that as well,” Sichterman said. “Recruiters are struggling to find ways to get more applicants.”
This year’s dropoff in applications has been steeper than usual, he said, after a typical rush of applicants after the holidays.
Part of the reason for the applicant drop-off, Sichterman said, might be the perception of recruiters who may tend to judge the number of applicants by the number of telephone calls received.
The easing in the turnover pace is reflected in driver pay levels, according to National Transportation Institute President Gordon Klemp, whose firm surveys more than 300 fleets’ pay and benefit practices.
Average pay for dry-van drivers rose less than 1 cent per mile last year, Klemp said on March 8, with a median level of $48,931.
The shortage of drivers currently is more severe among owner-operators, noted Steve Prelipp, a consultant on driver issues and former fleet executive.
