ATA reports sharp decrease in Q4 truckload driver turnover rate

While motor carriers continue to work hard to fill driver seats, data issued today by the American Trucking Associations (ATA) is showing that the efforts are showing signs of paying off more so than usual.

ATA reported that the annualized turnover rate for large truckload carriers, which it defines as truckload fleets with more than $30 million in revenue for the fourth quarter of 2016 was down 10 percent compared to same timeframe in 2015 at an annualized rate of 71 percent, which it said marks its lowest rate in six years. What’s more, it is also down significantly from the third quarter of 2016, which saw the turnover rate come in at 81 percent––its lowest level at the time since the second quarter of 2011.

What’s more, when looking at the driver turnover rate for large carriers for all of 2016, the over all trend is positive, with the first quarter down 13 percent annually at 89 percent, the second quarter down 6 percent at 83 percent and the aforementioned third and fourth quarters at 71 percent and 81 percent, respectively.

ATA said that the turnover rate for smaller truckload fleets was down 16 percent to 64 percent, which is its lowest level in five years. And for less-than-truckload fleets, the driver turnover rate was down 1 percent to 8 percent, its lowest level going back to the first quarter of 2016. The turnover rate for LTL carriers is typically much lower than the rate for truckload carriers.

“Continued declines in turnover rate reflects the overall choppiness of the freight market,” said ATA Chief Economist Bob Costello in a statement. “As inventory levels throughout the supply chain are drawn down to more normal levels, and freight volumes recover, we should see turnover rise along with concerns about the driver shortage.”

The ATA executive previously said that ongoing softness in the freight economy contributed to an easing of the market for drivers and a reduced turnover rate, adding that at the end of the third quarter there were indications that the end of the high inventory cycle may be in sight, leading to turnover rates rebounding in the coming quarters, as he said this week.

What’s more, he added if freight demand truly picks up and subsequently comes with increased demand for drivers and higher turnover rates, which will likely be back to the more familiar range of the mid-to-high 90 percent range…an unwelcome statistic to be sure, as it represents a “here we go (or are) again” type of scenario, with no clear end in sight for addressing the shortage and high turnover rates.

In October 2015, the ATA issued a landmark report, entitled “Truck Driver Analysis 2015,” whose chief findings cited how the current shortage of truck drivers now stands at almost 48,000 and has the potential to go higher, due in large part to industry growth and drivers parking their trucks on the way to retirement and also noting that if current trends remain intact, the driver shortage could rise to around 175,000 by 2024.

Even with an increased onus on augmenting driver training, retention, and compensation packages, many carriers are still struggling with how to fill the empty seats. The ongoing driver shortage still serves as a major factor for tight over the road capacity, which has been burdensome for shippers in that they need to pay higher rates in order to get their freight moved in a timely and efficient manner.