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Truckload turnover still rising

June 20, 2005
Linehaul driver turnover rate among major truckload carriers was at a 120% annual rate in the first quarter of 2005, the American Trucking Assns. (ATA) said

Linehaul driver turnover rate among major truckload carriers was at a 120% annual rate in the first quarter of 2005, the American Trucking Assns. (ATA) said. While that marks a 16% drop from the record high rate set in the fourth quarter of 2004, it equals a 9% increase compared to the same period last year.

“The 120% figure hits near the top historically for driver turnover,” Bob Costello, ATA chief economist told Fleet Owner, adding that this level has only been reached in three quarters since ATA started collecting the data in 1995.

ATA has noted that driver turnover has been increasing over the past two years along with the improving economy. “It all stems from the fact that the improving economy means the driver has more choices in jobs,” said Costello. “We see that the turnover rate goes up historically with higher demand. But the recent level of turnover has definitely worsened (historically).”

“The [quarterly] drop in turnover was probably linked to the many large carriers implementing driver pay increases during the quarter,” ATA said in the report. “However, while most of these carriers noted that the pay hike helped with retention, it did not necessarily help with recruitment.”

Dave Berry; chairman of the Truckload Carriers Assn. (TCA), concurs.

“As a driver, that person has other choices. Factories are reopening and construction is red-hot,” Berry told Fleet Owner. “When you take the housing market that’s booming, those builders can levy large wage increases. In a vibrant and growing economy, the bad news is there’s more competition for the same amount of labor.”

As far as the 16% quarterly decrease in turnover, ATA notes that driver pay increases may be having an effect.

“For truckload carriers I’d expect to see turnover improve because of the wage increases but also due to a lot of effort in the industry to lower turnover,” said TCA’s Berry. “We at TCA have seen increased participation in our seminars on how to address turnover. Trucking companies are doing a great deal to make their company a better place to work.”

Tom Nightingale, vp of corporate marketing for truckload giant Schneider National told Fleet Owner that he has seen driver turnover rates drop even further than the 16% quarterly improvement ATA reported. “I can say we’ve always been substantially better than any numbers ATA has posted for the long-haul truck market,” Nightingale said, adding that in January the company implemented a major hike in driver pay.

“But our pay increase was not strictly based on a per-mile basis,” Nightingale said. “We focused more on the W2. We get calls from drivers who get paid 10 cents more per mile but are not getting enough miles.”

Among smaller truckload carriers the turnover rate was 102% in the first quarter of 2004. This is the same rate as for the fourth quarter of 2004 and is 12% higher than the same period last year. This rate matches the record high level set in the fourth quarter, ATA said.

However, even at this record level, small truckload carriers have consistently enjoyed lower turnover rates since 2003. “I think they have certain advantages being small that has an appeal to some drivers,” said TCA’s Berry. “For example, they work on a first name basis and may offer a more comforting setting. I know many truckload carriers large and small have increased pay and done a lot to improve lifestyle. But it is probably the large carriers that probably have more opportunity to do so.”

“Small truckload carriers have been able to get closer to what we’ve doing— creating a sustainable, predictable time-at-home to work life balance,” Schneider’s Nightingale said. “They may know drivers through individual relationships and as a result tailor their network and policies to meet individual driver needs.”

About the Author

Terrence Nguyen

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