Truckload Driver Turnover Rate Rises as Fleets Grow to Meet Freight Demand

This story appears in the April 18 print edition of Transport Topics.

Truck-driver turnover rose from historic lows during the fourth quarter of 2010, and is likely to rise further this year as fleets seek more drivers to meet growing freight demand, American Trucking Associations reported last week.

Turnover during the three months reached 69% for large truckload fleets — those with revenue above $30 million — hitting the highest level since the second quarter of 2008, ATA reported April 14.

Turnover at those fleets was 49% in the third quarter of 2010 and 44% in the final 2009 quarter.

Smaller truckload fleets had average turnover of 49% during the October-through-December period, compared with 44% in the third quarter, and from the record low of 35% in the fourth quarter of 2009.

“The bulk of this churn is due to increased demand for drivers,” said ATA Chief Economist Bob Costello. “As the recovery strengthens, we’re likely to see demand for drivers and trucking services continue to increase, with that demand manifesting itself in rising turnover rates and ultimately, once again, a shortage of drivers.”

Despite the recent marked increase, turnover remains far below the peak of 136% recorded in the final quarter of 2005. On average, larger fleet turnover remained at the elevated level of 117% for the full years of both 2006 and 2007 before receding sharply late in 2008, finishing the year at 61%.

Turnover remained exceptionally low for less-than-truckload carriers, Costello said, with the fourth quarter rate of just 6%.

While acknowledging that rising turnover is a concern, Costello said it can also be viewed as a positive that stronger industry conditions are behind increased driver demand.

He also said turnover may have risen slightly because fleets dumped their worst drivers as the federal Compliance, Safety, Accountability program was implemented.

Rim Yurkus, CEO of retention and recruiting firm Strategic Programs Inc., Denver, spotlighted a different concern.

“We are seeing an increase in turnover now that the recession is behind us, but that is not the alarming thing,” he told TT. “Companies are finding that turnover is higher among better drivers because they know they can be competitive [for higher wages] in the marketplace. There is also a lot of pent-up turnover when companies didn’t treat [drivers] well.”

He believes the turnover gap between companies with good driver retention and support programs and the fleets that struggled in those areas will widen, compared with pre-recession trends.

“During the recession, some companies did a good job communicating with their people, explained their strategy and kept drivers in the loop,” he said. “Other companies hunkered down and didn’t communicate. Those drivers are still mad at that company, and they are going to leave.”

“We’ve certainly noticed that competition has picked up for drivers,” said Gary Kelley, senior vice president at truckload carrier D.M. Bowman, Williamsport, Md. “We know our competitors are trying to attract our drivers.”

In response, he said, the carrier has upgraded compensation packages and added performance bonuses.

“We have all been reminded that our drivers are our most important asset,” Kelley told TT. “Good truck drivers are not a dime a dozen. They are difficult to find.”

There are a variety of approaches to keep turnover down and maximize retention, industry officials said.

“Everyone in the company is focused on retention,” said Marcia Faschingbauer, president of Excargo Services, Houston, because all company employees’ bonuses are tied to successfully retaining drivers.

Excargo, which operates 75 trucks, uses a reward and recognition system that includes boots, tires, trips, personalized truck decals and quarterly breakfasts to recognize owner-operators’ positive performance.

Faschingbauer also said managers and CEOs could keep a lid on turn-over by finding out first-hand what drivers’ frustrations are, such as delays at loading docks and obtaining paperwork.

“Truck drivers want to move,” she said. “They want to work in a professional and organized operation.”

Faschingbauer also acknowledged the challenges in retaining owner-operators because “there is freedom to move where the freight is and to where the money is.”

She also said it was important that drivers who leave know that they are welcome to return if their work was exemplary.

Yurkus agreed, saying, “If a driver you like is leaving, give him a round-trip ticket. Tell him if things don’t work out, ‘You know you are welcome back.’ ”

He offered several other retention ideas, saying that even fleets with disgruntled drivers should realize that “it’s never too late to start communicating better.”

He recommended special attention to new drivers to isolate them from more cynical veterans, and a responsive process for resolving drivers’ issues that never makes them feel like they are at a dead end.

“Have fleet managers that know their drivers as individuals,” Yurkus added. “Make sure they don’t treat 40 or 50 drivers the same way. They need to know who wants home time, who wants more miles, and which drivers want to be contacted by phone or electronic methods.”