Q1 driver turnover rate declines but challenges and uncertainty remain

Even with some declines, data issued this week by the American Trucking Associations (ATA) still makes it clear that the annualized turnover rates for truck drivers still remains high.

The ATA reported that the annualized turnover rate for large truckload carriers-defined by the ATA as truckload fleets with more than $30 million in revenue-in the first quarter dropped 12 percent to 84 percent, which it said represents its lowest since the second quarter of 2011 and also first time it has dipped below the 90 percent mark since 2011.

For small truckload fleets, which are defined by the ATA as those under $30 million in revenue, the second quarter also saw a 12 percent decline, with the turnover rate at 83 percent.  And for less-than-truckload (LTL) fleets, the second quarter turnover rate was down 1 percent to 9 percent, which stands as the lowest quarterly LTL driver turnover rate going back to the second quarter of 2013.

The ATA estimates the current driver shortage is in the 35,000-to-40,000 range, and with a combination of retirements and people exiting the industry, carriers need to recruit in roughly 100,000 drivers per year over the next decade to simply keep pace with projected United States freight needs.

“Clearly, the decline in driver turnover in the first quarter was significant but what is less clear is why it dropped so much and whether turnover will continue to remain low,” ATA Chief Economist Bob Costello said in a statement. “Drivers continue to be in high demand, so we still see the risks posed to the economy and our industry by the shortage of drivers,” “The drop in turnover was likely, at least partially, connected to a temporary slowdown in freight movements in the quarter, as well as improved retention efforts of fleets across the board. But I would not be surprised if turnover edges higher in the quarters ahead.”

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.

Bobby Harris, president of non asset-based 3PL Blue Grace Logistics previously told LM that the main issue with this current driver shortage is that there is no immediate cure to fix this predicament.

“Even though there have been driver shortages in the past, there have been ebbs and flows,” he explained. “But the problem with this one is that we have not seen a solution or a remedy or something that will work itself out in the short term. We believe that there is going to have to be something significant that takes place to address that issue; otherwise, it is going to get progressively worse. It is not just a little problem. It is a big problem, and it cannot be overemphasized at this point, as it is extremely viable to supply chains.”

And while it is encouraging to see increased driver pay and incentive-based initiatives, the problem, he said, is those things take drivers from other companies and they move from one carrier to another.

“That does not increase the driver pool. If you walk into a high school today and ask the senior class is anyone wants to drive a truck after graduation, you likely will not find one hand raised,” he stated. “With an average age of [50], the driver pool is decreasing, and there are telltale signs that with the younger generation entering the workforce, there is no, or limited, interest in a blue-collar job, much less driving.”

Many industry stakeholders maintain that the current trucking supply and demand dynamics are pretty balanced, with things still relatively tight, but there remains a general consensus that the driver shortage is likely to get worse in the short-term.

Senator Deb Fischer (R-Neb.) recently introduced a bill that takes some positive steps towards alleviating the ongoing driver shortage predicament.
The bill, entitled The Commercial Driver Act, proposed to lower the age commercial drivers can operate across state lines from 21 to 18.

Fischer’s bill will launch a pilot study dedicated to lowering the federal driver age, coupled with other efforts to create driver openings for high school graduates, whose overall unemployment rates are up to triple the national average, according to ATA.