Driver Turnover Stays Above 90% In 1Q at Large Truckload Carriers

This story appears in the July 14 print edition of Transport Topics.

Turnover at large truckload carriers in the first quarter stubbornly lingered above 90% — marking the ninth straight quarter in that range, American Trucking Associations reported.

The over-the-road turnover rate for large truckload fleets, those with annual revenue of at least $30 million, was 92%, ATA said in its quarterly report released July 9.

That compares with 97% in the same period last year and is up from 91% in the fourth quarter.

Turnover at small truckload fleets, with revenue below $30 million, was 78%, down from 82% a year ago. It slipped 1 point from the fourth quarter, and since the first quarter of 2012, turnover for small TL carriers has fluctuated between 76% and 82%, ATA said.

“While high, turnover at large truckload carriers is lower than other years when the driver shortage was as acute,” ATA Chief Economist Bob Costello said. “In 2005, turnover averaged 130%, while in 2006, another year with a tight driver market, it averaged 117%.

“The industry has 30,000 to 35,000 unfilled truck driver jobs,” Costello said. “As trucking starts to haul more because demand goes up, we’ll need to add more drivers — nearly 100,000 in the next decade — in order to keep pace.”

Turnover remained low for less-than-truckload fleets, with a 10% annualized first-quarter rate. That was the lowest level in three quarters and down from 11% last year.

One trucking executive predicted last week that driver pay will increase across the industry in the next few years in order to help alleviate turnover.

“It is by far the most difficult recruiting environment I’ve ever seen,” said Scott McLaughlin, president of Stagecoach Cartage & Distribution in El Paso, Texas. “The silver lining is [turnover] has improved from the horrific 120 to 125 [percent] of a few years ago.”

Stagecoach, which has about 150 trucks and 100 over-the-road drivers, qualifies as a large truckload carrier with revenue of more than $30 million for all of its business units, which include regional haul, intermodal, warehouse and cross-border Mexican operations.

McLaughlin said its turnover rate is in the teens. “We do a very good job retaining our drivers. I’ve got a lot of very good, very safe drivers, and they could go out tomorrow and get any number of jobs.”

But to reduce turnover, “there’s no silver bullet; it’s silver buckshot,” he said, explaining that it’s not one thing, it’s a culmination of things.

“You can do all the right things, like benefits, home time, work closely with shippers and receivers, but pay has to go up,” McLaughlin added.

He predicts the largest increase in driver pay in the next two to three years not seen in the past 10 years. “At the end of the day, that’s good for the industry,” he said.

Meanwhile, the owner of a national driving school said last week that demand continues to be strong for graduates of his company’s intensive training program.

“The need for our graduates started picking up a little over a year ago,” said Harry Kowalchyk, president and co-founder of National Tractor Trailer School Inc., in Liverpool, New York.

“We have about 100 people on campus in Liverpool and 40 in Buffalo,” Kowalchyk told Transport Topics. “If we had two or three times that, we’d have no problem placing them.”

Fleets “are going to lose a tremendous amount of drivers with the baby boomers leaving the industry,” he added.

Carriers have told him there is a direct correlation between the length of a training program and the length of time they spend with the first company they join. National Tractor Trailer School, which is in its 42nd year, runs 10-week, full-time classes or the equivalent length in part-time training.

Kowalchyk said he advises his students to remain on their first job for an adequate length of time.

“That shows commitment,” he said, adding that it also looks good on a driver’s work history.

ATA’s Costello said he was “a little surprised in the current environment that turnover has been pretty stable. We’ve been hearing consistently from fleets that the driver shortage is as bad as 2005 or 2006, when turnover reached a high of about 136%.”

Turnover’s low point was 39% in early 2010, when the economy was in recession.

“Relative to the difficult environment for drivers we’re facing today, it’s not too bad. If turnover doesn’t start to pick up, I think there’s something structurally changing in the industry, because the environment is ripe for a good uptick,” he added.