Turnover Grows at Large Truckload Carriers

Driver turnover among larger fleets rose modestly in the second quarter, but declined slightly at smaller fleets that traditionally have greater success in retaining drivers, American Trucking Associations reported last week.

Turnover at truckload fleets with revenue of $30 million or more climbed 4 percentage points to 79% in the second quarter, from 75% in the fourth quarter of last year.

The higher churn rate for larger fleets was the third consecutive increase and brought large fleet turnover to the highest point since the second quarter of 2008. Turn-over increased by 6 percentage points in the first quarter, and 20 points in the fourth.

Fleets with sales under $30 million saw turnover drop to 47% in the second quarter, from 50% in the first quarter.

“Large fleets tend to have more of a problem with turnover in tight driver markets than their smaller counterparts, so the fact that the spread is increasing is not surprising,” said Bob Costello, ATA’s chief economist.

For example, when turnover peaked in 2005, smaller fleets’ driver losses were about 35 percentage points lower than their larger counterparts, ATA statistics show.

Among less-than-truckload fleets, turnover fell to 6% in the second quarter from 8% in the first quarter.

“The basic reason for turnover is that drivers don’t feel they have value or are treated with respect,” said consultant Duff Swain, president of Trincon Group LLC, Columbus, Ohio. “The key difference comes up when smaller carriers reach out [to drivers] on a more personal basis. They are more engaged.”

Jim Subler, president of Classic Carriers Inc., Versailles, Ohio, is one of those who believes in the personal touch.

To keep drivers, “the biggest thing is to try and understand what the driver personally needs and wants,” Subler said. His 140-power-unit fleet has seen turnover rise from 25% last year to what he termed a “still respectable” 48% this year. “Seeing family and home time are becoming bigger and bigger. You have to cooperate better with drivers to satisfy their home needs and personal lives,” Subler added.

“Respectable” was the same word used by Swift Transportation Co. President Richard Stocking at an investor meeting to describe turnover at the Phoenix-based truckload carrier.

John Steele, chief financial officer for Werner Enterprises Inc., told an investor meeting, “There is a lot more churn and turnover in this marketplace.”

“A lot of things have changed in the driver corps,” Subler told TT, citing retirements among older drivers at Classic, whose median driver age is 57.

He also cited the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program and its driver performance yardsticks as a key turnover factor.

“If you had a person with a lot of tickets in 2008, 2009 or ’10, you tried to work with them,” Subler said. “Now, with CSA, we have gotten to the point where it is time for them to go.”

Drivers who have been let go from other fleets because of poor CSA scores now account for more than half of people seeking work at Classic, he said.

Subler also highlighted the difficulty in finding qualified new owner-operators, whose ranks are becoming more sparse, he said.

Swain and Costello also linked turnover and the tight driver supply.

“Despite the relatively small increase in turnover, we believe the driver market is tightening, as we hear reports nearly daily of carriers not finding enough drivers,” Costello said.

“When the driver market tightens, turnover increases as drivers tend to jump from carrier to carrier for various reasons, including carriers aggressively recruiting drivers,” he said.

“Many fleets are boosting pay and working hard on retention efforts,” Costello said. “Perhaps both are paying some dividends.”

While driver pay is increasing, Swain said, money alone won’t help retention. He maintained that past efforts to retain drivers by raising pay have failed.

“The fact that turnover continues to build is proof that we are not dealing with the issue effectively,” Swain said. “We won’t solve this by doing more of the same strategy that hasn’t worked in the first place.”

“The big carriers can do a better job of training and . . . [introducing drivers to their fleet], but on a day-to-day basis, the driver can become a number there,” Swain told Transport Topics.

As a result, he said, fleets tend to lose drivers in the first three or four months, which is a sign that either the wrong person was hired or the hiring process was mismanaged.

Swain noted that some carriers have had success attracting people as they leave military service. Keeping them, as well as other new hires, he said, is a matter of demonstrating that there is a career path in the industry beyond driving, such as jobs in safety or other management positions.

“We are in competition in hiring with other professions, such as construction, electricians or plumbers,” Swain said.

The three-year gap between high school graduation and the minimum age for truck drivers hurts hiring when compared with those other lines of work, he added.