Slow climb of driver wages pressuring turnover rate

Slow climb of driver wages pressuring turnover rate

Driver turnover is not expected to improve through the remainder of 2012 according to a new survey of carriers. According to Transport Capital Partners’ (TCP) Second Quarter 2012 Business Expectations survey, small increases in driver wages through the remainder of the year will likely result in an exacerbation of the driver turnover problem and not lead to a significant increase in drivers entering the industry.

“Carriers are concerned about unseated trucks and the lack of applicants for a variety of reasons. Extended long-term unemployment encourages looking for a new job only as these benefits run out. Additionally, the increase in construction is resulting in former and current drivers moving back to that industry,” said Lana Batts, TCP Partner.

TCP surmised that the low increase in wages combined with the improving construction industry - which will likely further improve with the passage of the 27-month transportation bill last week – drawing potential drivers back to work there will continue to drive turnover.

Mike Card, president of Combined Transport and first vice chair of American Trucking Assns. (ATA), appearing recently on Fox Business News’ The Willis Report, echoed TCP’s thoughts.

“If the driver could stay home every night, that’s what they’d prefer. Being gone long hours is tough on the family,” he said. “A lot of these truck drivers have other skills like construction, plumbing, electrical, so if they have an opportunity to work closer to home, local driving jobs, that’s what they are going to do.”

The American Trucking Assns. (ATA) recently announced that first-quarter driver turnover for truckload carriers jumped to 90%, the highest it’s been since the first quarter of 2008. Turnover at truckload fleets with less than $30 million in revenue jumped to 71%, up from 55%.

“We were surprised that the turnover rate dipped in the fourth quarter,” said Bob Costello, ATA chief economist. “This report of a slight rise at large fleets and a significant increase at smaller fleets matches up with what we hear regarding the health of the industry, the tightening of the labor market for drivers and demand for good, quality, experienced drivers.”

Turnover at less-than-truckload fleets remained low, at just 8%, but that also was a 1% increase from the previous quarter, ATA said.

According to TCP’s survey, 93% of carriers expect wages to rise over the next 12 months, although 71% believe those increases will be less than 5%.

The percentage of carriers expecting driver wages to remain the same has dropped significantly from previous surveys. The November 2010 survey found around 20% of carriers forecasting unchanged wages. That number dropped below 10% in May 2011’s survey and has fallen again to around 5%.

At the same time, after dropping slightly in the May 2011 survey, those carriers expecting a 0-5% increase jumped from the mid-60% range to 71% in the current survey.

Noel Perry, managing director at FTR Associations, recently told USA Today that driver salaries are up about 5% this year to $50,000.


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