Driver turnover rates remain high, according to ATA data
The American Trucking Associations said the turnover rate for this category hit 89 percent in the third quarter, following rates of 75 percent and 79 percent in the first and second quarter, respectively.
in the NewsState of Logistics 2016: Pursue mutual benefit ISM semiannual report views 2017 as a growth year for manufacturing and non-manufacturing ISM semiannual report views 2017 as a growth year for manufacturing and non-manufacturing Industrial real estate market is at top of its game, says JLL SaaS Supply Chain Management Systems More News
The turnover rate for truckload drivers at large fleets headed north for the fourth straight quarter, according to data from the American Trucking Associations (ATA).
The ATA said earlier today that the turnover rate for this category hit 89 percent in the third quarter, following rates of 75 percent and 79 percent in the first and second quarter, respectively. The third quarter turnover percentage represents its highest level since the first quarter of 2008. And since the first quarter of 2010, it has gone up 50 percentage points and averaged 81 percent year-to-date in 2011.
ATA officials said that this turnover rate reflects the increased demand and competition for drivers.
“Clearly, due to the economic recovery, as well as regulatory factors like CSA, we are seeing the market for good, quality drivers tighten,” ATA Chief Economist Bob Costello said in a statement. “As our tonnage index has shown recently, demand for freight continues to rise, so we expect the need for quality drivers to become more acute going forward, particularly if regulations either force current drivers out of the industry or force fleets to put more trucks on the road.”
The ATA also reported that turnover rate at small truckload fleets rose 10 points to 57 percent for its highest level since the third quarter of 2008, and less-than-truckload turnover reached 10 percent.
As LM has reported, driver turnover and tight capacity are two things that clearly go hand in hand in the trucking industry, especially during the current tight market conditions, spurred on by a slow economic recovery and the December 2010 implementation of CSA, as well as possible changes to truck driver hours-of-service regulations (a final HOS rule is expected in late October).
And unless capacity is added by major trucking players, it is likely that turnover will continue at its current rate, say industry experts.
“Even if carriers were buying trucks, they still cannot find drivers,” said Lana Batts, partner at Transport Capitol Partners, in a recent interview. “In order for carriers to attract and retain drivers, rates will need to rise from where they are today. Rate hikes will go to driver pay first even though unemployment is still nearly ten percent. Possible driver candidates are collecting unemployment with a cash job on the side—and are also home every night.”
Industry experts have long stated that increased truck driver turnover should not be misinterpreted as being driven by strong economic activity and should not be viewed as a driver of an economic recovery.
Instead, it is viewed more as a trucking recovery, with turnover rising early in recoveries as drivers who want to change fleets do so. Adding to this is that truckers have not hired earlier because productivity allowed them to move more freight without hiring.
“We are seeing the driver workforce age just like the standard workforce in the U.S. is,” said Bobby Harris, president of non asset-based 3PL Blue Grace Logistics. “The new workforce coming in is not predisposed to taking driving jobs. In the past, job seekers would come out of high school, college or military services and get a CDL and understand it could provide a great living for their family but are not finding other things. It is not as desirable of a job for many of them as it used to be. The pool of available drivers is still thinning at a fast rate. And with unemployment still high, that makes the situation even more frustrating.”
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
Warehouse & DC Operations Survey: Ready to confront complexity 2016 Quest for Quality Awards Dinner View More From this Issue