Soft freight ups driver churn at large TL carriers

Despite pay raises and improvements in benefits across much of the industry, the driver turnover rate for large truckload (TL) carriers increased during the first quarter to its highest mark since the end of 2005

Despite pay raises and improvements in benefits across much of the industry, the driver turnover rate for large truckload (TL) carriers increased during the first quarter to its highest mark since the end of 2005.

The American Trucking Associations (ATA), which began collecting driver turnover statistics in 1995, reported that turnover for large TL carriers reached an annualized rate of 127% for the first three months of the year – six percentage points higher than during the last three months of 2006. That means bigger TL carriers ended the quarter with 1.8% fewer drivers than they had at the start.

Small TL carriers, on the other hand, saw average annualized turnover drop to 102% during the first three months of the year, down from 112% at the end of 2006. That means smaller carriers added 3.5% to their driver ranks in the first quarter this year, marking the second consecutive quarterly gain in the number of drivers.

“The softer freight demand contributed to the increase in large TL driver turnover,” said Bob Costello, ATA chief economist. “Nearly 80% of the large carriers in our sample saw their number of employee drivers fall during the period. In some cases, the drivers that left were not replaced, due to soft and choppy freight levels.”

And turnover is increasing despite a concerted effort by the TL industry to improve pay and benefits. “Our labor costs grew throughout 2006 as we increased driver pay in response to a challenging driver hiring market and high driver turnover,” said Jerry Orler, president & CEO of Van Buren, AR-based USA Truck in the carrier’s earnings report earlier this year.

“We are continuing to experience increased cost pressures associated with recruiting, compensating and retaining qualified driver employees,” Orler added. “The result has been increased costs to replace departed driver employees, fewer tractor additions than originally forecasted and increased unmanned tractors.”

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