Soft economy and HOS drove up turnover

A softening economy in the third quarter and drivers struggling to comply with the 2005 hours-of-service (HOS) rules were primary factors in a boost in third quarter driver turnover among truckload carriers

A softening economy in the third quarter and drivers struggling to comply with the 2005 hours-of-service (HOS) rules were primary factors in a boost in third quarter driver turnover among truckload carriers, according to Jim O’Neal, first vice chair of the Truckload Carriers Assn. and president of O&S Trucking.

According to a report released yesterday by the American Trucking Assns., large truckload carrier linehaul driver turnover increased 11% to 121% while smaller truckload carrier turnover ballooned 14% to 114%.

See Driver turnover worsened in 3Q

The trucking industry in the third quarter generally reported a softening in freight demand and more difficulty increasing rates, a contrast to bullish previous quarters. Aside from crimping year-over-year growth, a slackened freight environment proved to be double edge sword as more drivers switched carriers or exited the industry in search of bigger week-to-week paychecks.

“The economy started softening in the third quarter and the turnover rate went up,” O’Neal told FleetOwner. “Driver churn increases in slow economic times. That puts a dampening effect on the compensation increase [carriers] could have done. That is a double whammy in that carriers didn’t have as many miles for the driver.”

That in turn appears to eliminated the progress the trucking industry has made toward eliminating the wage gap to industries such as construction, making it more likely truckers are exiting the industry

“I believe hours-of-service has had an impact as well,” O’Neal said. “It’s harder to manage a workday, it’s more stressful and drivers are more fatigued. Carriers are trying audit and enforce the hours-of-service with a little more thoroughness and that can probably frustrate a driver. We’ve felt the pressure on the drivers starting with this hours-of-service change.”

In spite of the industry-wide increase in turnover O&S actually saw a drop that quarter to 52%, O’Neal said. He attributed the decrease to the company’s commitment to “utilization pay” to provide a more predictable pay structure for drivers as well as the company’s focus on communication and culture.

“Our feeling is that if we do better in the hiring process, our culture is strong and our pay is competitive, then our turnover is going to go down,” O’Neal said.

To comment on this article, write to Terrence Nguyen at [email protected]

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