Large truckload carrier driver turnover rates see big increase in Q3, says ATA

For those that may think the high levels of driver turnover are abating, data issued today by the American Trucking Associations (ATA) tells a different story.

ATA reported that the annualized turnover rate for large truckload carriers, which it defines as truckload fleets with more than $30 million in revenue, headed up 13 percent to 100 percent from the second quarter to the third quarter, representing the highest level it has hit in the last three years. For the first two quarters of 2015 the annualized turnover rate for large truckload carriers was at 84 percent and 87 percent, respectively. The 84 percent for the first quarter marked the lowest turnover level going back to the second quarter of 2001, as well as the first time it had dipped below the 90 percent mark since 2011, according to ATA data.

And it added that for the first three months of 2015 the average turnover rate for large carriers had a cumulative average of 90 percent, which was below the 2014 average for the same period of 95 percent.

For small truckload carriers, which are defined by the ATA as those under $30 million in revenue, turnover was not nearly as severe in the third quarter at 68 percent, which ATA said it its lowest level since the fourth quarter of 2011. For the first three quarters of 2015, the turnover rate for small carriers had a cumulative average of 75 percent, which was down from a 90 percent turnover average for the first three quarters of 2015.  This follows rate a 7 percent decline to 76 percent in the second quarter, which at the time was its lowest level since the third quarter of 2013.

“It is just one data point [for large truckload carriers], so it is hard to draw any real conclusions on what is happening with turnover,” said ATA Chief Economist Bob Costello in a statement. “However, the increase in the turnover rate at large carriers matches up with what we’ve been hearing anecdotally from fleets: that the market for drivers continues to be tight. The split in the truckload turnover rates is not unusual, but may be caused by a variety and combination of factors. We may likely have a clearer picture of the driver market once fourth quarter turnover figures are in so we can better analyze any possible trend.”

The turnover rate for less-than-truckload (LTL) carriers, which is typically much lower than the rate for truckload drivers, saw a three percent decline to 10 percent in the third quarter while seeing an average of 10 percent for the first three quarters of 2015, down slightly from the 11 percent average for the same period in 2015.

In October, the ATA issued a report entitled “Truck Driver Analysis 2015.” The chief findings of the report 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.

Many industry stakeholders say that the lack of available––and willing––drivers will only get worse in the coming years, with the average age of drivers still firmly entrenched around 50.

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.

At last September’s Intermodal Expo in Ft. Lauderdale, Fla. FTR Senior Analyst Noel Perry said that a slew of federal regulations (such as HOS, ELD, and CSA, is continuing to put pressure on driver supply.

“When the HOS driver restart provision was suspended in late 2013, the sector got an extra three-to-four percent of productivity, but with other regulations set to slowly kick in, there will be a record driver shortage by the end of 2016 and into 2017 and 2018. The short-term dynamic of that is the industry having to hire a lot of people, and the long-term dynamic is what makes it hard to hire lots of people, such as the slowing down of the rate of growth in the labor force.”