Driver Turnover Remains Low at Truckload Fleets in Fourth Quarter

This story appears in the March 29 print edition of Transport Topics.

Driver turnover — or churn — at large truckload carriers hovered near its all-time low in the fourth quarter of 2009, coming in at 44%, American Trucking Associations said.

Turnover at large truckload carriers — those that do more than $30 million a year in business — was only 1 percentage point above the third quarter’s record low and down significantly from the 2008 fourth quarter, when the turnover rate was 61%.

Turnover at small truckload carriers, those with annual revenue below $30 million, dropped 9 percentage points to 35% in the fourth quarter from three months earlier, sharply down from 55% in the 2008 fourth quarter, ATA said.

“It was still a weak driver market in the fourth quarter,” said Bob Costello, ATA’s chief economist. “Demand for drivers didn’t in-crease much, if at all, from the third quarter.”

In the meantime, the less-than-truckload sector, which traditionally turns over fewer drivers than truckload carriers, saw the rate of churn for linehaul operators drop to 8% in the fourth quarter from 10% in the third quarter, ATA said.

ATA’s turnover rate statistic includes layoffs, firings, retirements and drivers who quit.

An industry consultant said that while he “didn’t make much” of the small fourth-quarter gain in large carrier turnover, the blip could reflect a desire on the part of fleets to retain only their most experienced drivers.

“Part of the message is that the carriers have kept the drivers they want to keep,” said Steve Prelipp, a consultant based in Chapel Hill, N.C.

At the moment, “the quality of drivers out there is very problematic,” Prelipp told Transport Topics. “It’s a combination of a number of things: a number of people have left the industry, the training schools have dried up — Schneider [National] closed their training school” late last year, for example.

Prelipp added that the industry could be in for “a huge change” in terms of driver demand because  the economy appears to be recovering, and the federal government’s Comprehensive Safety Analysis 2010 rating system, which is set to go live this summer, is likely to fan the demand for experienced drivers.

ATA’s Costello did not indicate that a recruiting surge was imminent. Asked whether the trucking industry still faces a long-term driver shortage — an issue on which ATA has warned repeatedly — Costello said “eventually, yes.”

Kevin Burch, president of truckload carrier Jet Express, said that his drivers are, for the most part, staying put.

Turnover is “nowhere near what it was in its heyday,” Burch said. A few years ago, “drivers were leaving because they didn’t like the color or make of their equipment,” or “they’d say, ‘The guy down the road is paying a cent a mile more. I think I’ve got to leave.’ ”

Turnover at large truckload carriers hit 136% in the fourth quarter of 2005.

Today, Burch told TT, “even seasoned fleet owners, the biggest owner-operators in our company, are saying, ‘I just want to be stable.’ ”

Jet Express, Dayton, Ohio, is a small carrier, according to the ATA metric. Burch is the immediate past chairman of the Truckload Carriers Association, Alexandria, Va.

He said that there are indications that churn could intensify for U.S. truckload carriers.

For one thing, the economy appears ready to turn a corner — a factor that Burch said is already driving some carriers to dial up recruiting efforts.

At least for small carriers, the latest ATA data appeared to confirm Burch’s observation.

In the fourth quarter, overall payrolls at small truckload fleets rose for the first time since the first quarter of 2007, ATA said. Hiring at small truckload carriers rose 1.5% in the fourth quarter from the third.

Moreover, small truckload carriers hired 2.2% more linehaul drivers in the fourth quarter than they did in the prior quarter, according to ATA.

Conversely, larger carriers continued to cut payrolls in the fourth quarter, hiring 0.5% fewer linehaul drivers, ATA data show.

Looking ahead, ATA’s Costello said large truckload carriers “may start to increase employment levels marginally in the coming quarters as we are hearing from the truck driver training schools that carrier interest is growing rapidly.”

Burch at Jet Express, however, said that when recruiting picks up again, carriers will be competing most fiercely for experienced drivers and not fresh trainees.

He said that the federal government’s CSA 2010 program will pressure fleets to take a pass on greenhorns and compete to attract veteran drivers with good safety records. Under CSA 2010, individual drivers must shoulder more responsibility for carriers’ overall safety ratings.

Soon, “we’re going to be running ads in papers, having the sign-on bonuses again, having drivers jump for truck models,” Burch said.