It does not come as a surprise that data issued this week by the American Trucking Associations (ATA) pointed to significant annualized second quarter turnover rates, for both large and small truckload carriers, driven in large part to the impact of the COVID-19 pandemic.
In its data, ATA reported that the truckload carrier turnover rate, for carriers with more than $30 million in annual revenue, decreased 12%, to 82%, which represents the lowest level going back to the end of 2018. And it added that the turnover rate, for smaller truckload carriers, was off 10%, to 60%, marking its lowest quarterly level going back to the fourth quarter of 2011. On the less-than-truckload (LTL) side, the second quarter annualized turnover rate was flat, at 12%.
“The second quarter was a tumultuous one for trucking, and the broader economy, as restrictions imposed to slow the spread of the COVID-19 had significant impacts on the country,” said American Trucking Associations Chief Economist Bob Costello in a statement. “The coronavirus had a profound impact on the driver market—particularly in the first part of the second quarter. But by the end of the quarter we had begun to see the market tighten again as various restrictions began to be lifted. After steep drops early, the driver market began to normalize toward the end of the quarter. As the economy continues to recover, we should see the market for drivers continue to tighten going forward.”
While market conditions are much different now, than they were prior to the COVID-19 pandemic, many issues related to driver turnover remain consistent.
For example, in early 2019, motor carriers took steps to be aggressive in trying to ameliorate the high turnover situation though efforts like raising driver sign-on bonuses, increasing pay, and providing financial aid options for potential drivers to attend driver training schools to get them their CDL licenses, among other things.
And the ATA’s Costello said around that time that anecdotally, carriers continue to struggle both recruiting and retaining quality drivers – leading to increasing wages, adding that the tight driver market should continue and will be a source of concern for carriers in the months ahead.
“Turnover is not a measure of the driver shortage, but rather of demand for drivers,” he said. “We know that as freight demand continues to rise, demand for drivers to move those goods will also rise, which often results in more driver churn or turnover. Finding enough qualified drivers remains a tremendous challenge for the trucking industry and one that if not solved will threaten the entire supply chain.”