Editorial: Rising Driver Turnover Rates

A number of things are conspiring to push driver turnover rates up for smaller carriers, even as larger fleets have been more successful in keeping a lid on employee churn.

As reported elsewhere in this week’s Transport Topics, turnover at smaller truckload fleets jumped in the first quarter to 71% from 55% in the last quarter of 2011.

This was the biggest quarter-to-quarter jump in seven years for those carriers with revenue below $30 million, and narrowed the traditional gap between churn rates for smaller carriers and larger ones, where driver turnover in the quarter moved to 90% from the past quarter’s 88%.

Smaller fleets traditionally have had lower turnover rates, based in part on the closer connection between drivers and management, which analysts say often fosters greater driver loyalty. Traditionally, that has extended to pay, where some drivers were willing to take lower wages from smaller fleets because of their feelings of loyalty.

Now, however, it appears that smaller fleets are feeling the pinch more acutely of rising equipment costs, a shrinking labor pool, increased driver demand and the effect of new federal rules on fleet operations.

And, given today’s economic realities, it appears that more small-fleet drivers are looking for the best deal, and that has helped push turnover rates up for smaller carriers.

Some of the experts we talked with said the Federal Motor Carrier Safety Administration’s new safety program is contributing to churn, as some drivers seek out carriers with better safety scores over concerns about the future of fleets with lower scores.

Smaller carriers also are feeling the pinch of sharply higher equipment costs, exacerbated by the industry-wide trend during the recession to delay truck purchases. Fleets today are trading in older-than-usual trucks and buying more expensive replacements.

Several industry experts reported recently that some smaller fleets have to trade in two old trucks in order to acquire one new one.

The slowly improving economy also is taking its toll on the labor pool, as construction finally begins to show signs of life. While this increase improves freight levels, it also leads some drivers to turn to construction for jobs, which often pay better in boom times than being behind the wheel of a truck.

And with many fleets already reporting problems finding enough drivers, concerns are growing — and with good cause — about what could happen in the near future when economic growth improves.