Driver turnover rate heads down but remains an issue

By Jeff Berman, Group News Editor
March 16, 2014 - LM Editorial

While there was a bit of a decrease, the American Trucking Associations (ATA) reported today that the turnover rate at large truckload carriers for the fourth quarter of 2013 came in at 91 percent.

This marks a six percent decrease from the third quarter and the second straight the turnover rate dropped. And the ATA added that for calendar year 2013 driver turnover averaged 96 percent, which was slightly below 2012’s 98 percent and below the all-time high of 2005’s 130 percent.

“We saw turnover at fleets with at least $30 million in annual revenue bottom out near 50 percent at the depths of the Great Recession and have increased steadily since,” said ATA Chief Economist Bob Costello in a statement. “The rate appears to have flattened out at an elevated level for the moment. However, it could easily increase as tightness in the labor pool should continue, and even worsen, as the economy improves.”

In addressing the 2014 driver pool, Costello said stronger economic growth is expected, coupled with increased growth for the trucking industry that could translate into additional pressure on both the driver market and the driver shortage.

What’s more, he added that there are currently 30,000 unfilled driver jobs, and when demand increases and subsequently volumes increase, more drivers will need to be added at the pace of about 100,000 per year over the next decade to meet demand and the need for drivers.

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 last year’s truck driver hours-of-service (HOS) regulations that took effect last July.

And regulations like CSA and HOS, as well as the coming Electric Logging Device rule continue to play a major role in carriers’ being hesitant to increase capacity and subsequently hire drivers, which continues to be challenging, as evidenced by ATA’s data.

Projections from freight transportation forecasting consultancy FTR Associates estimate that this problem is likely to get worse and by 2014 the driver shortage could be in the 250,000 range, which Stifel Nicolaus analyst John Larkin said is going to create a capacity shortage which will translate into “fairly sizable rate increases” that might be steeper than what has occurred during the slow growth period over the last couple of years.

While turnover figures to remain prevalent in the future as it is now, the onset of additional regulations to HOS and CSA, will lead to increased hiring. FTR Senior Consultant Noel Perry said that by the third quarter of 2016 there could be 1.4 million new drivers in the marketplace.

The ATA also reported that small truckload fleet turnover headed up 5 percent to 79 percent in the fourth quarter and was 82 percent for all of 2013. LTL sector driver turnover, which is typically nowhere near as steep as it is on the truckload side, decreased 2 percent to 11 percent, matching the LTL turnover rate for all of 2013.



About the Author

Jeff Berman headshot
Jeff 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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

The annualized turnover rate for large truckload carriers in the third quarter rose one percentage point to 97 percent, according to the ATA.

The Pacific Maritime Association (PMA), representing employers at 29 ports, and the International Longshore and Warehouse Union (ILWU), which represents 20,000 dockworkers, have come to a tentative agreement on a key issue in ongoing contract negotiations.

Diesel prices continued their ongoing decline, with the average price per gallon falling 6.7 cents to $2.866 per gallon, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

Article Topics

News · Trucking · LTL · Driver Shortage · ATA · All topics

About the Author

Jeff Berman, 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.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA