Opinion: The True Picture of Driver Turnover
The major challenge facing the trucking industry, particularly truckload carriers, is attracting and retaining an adequate labor force of drivers. With driver turnover rates approaching or exceeding 100% at many truckload carriers, critics of the industry say that only government intervention, in the form of new labor laws or revised hours-of-service regulation, will solve the problem.
The true picture of high driver turnover is neither as bleak nor hopeless as critics like to paint. The last few years have seen the truckload industry make tremendous strides in improving driver wages and job satisfaction without any intervention by the government.
At almost all truckload carriers, even those with turnover above 100%, the majority of drivers and operators stay year after year and are happy with their jobs and employers. It is the newly hired drivers, about one-third of most fleets, who jump jobs every few months, causing the statistics critics like to point to.
Driving this shortage is the decrease in inflation-adjusted driver wages since the deregulation of the industry in 1980. By the early ’90s, the words driver and shortage began to appear regularly together. Truckload carriers responded by boosting wage rates in real terms. Competition for drivers became so intense that in 1996 I started a successful quarterly publication, The National Survey of Driver Wages, whose sole purpose was to track pay and benefit changes at major truckload carriers for both company drivers and owner-operators.
From May of 1996 to May of 2000, wages and benefits for drivers increased each year in the range of 4% to 5%. With the current industry slump, the last few quarters have seen only modest gains. When freight demand picks up, most observers expect regular wage increases once again to outstrip inflation.
Even with this slowdown, a truckload driver with three years of experience will make $35,000 to $40,000 in wages, hardly poverty level. Most truckload carriers can point to top wage earners exceeding $50,000 a year.
Wage increases were not the only improvement. The cabover tractor, which is cheaper to buy and operate, has become virtually extinct to satisfy driver demands for better comfort. Major carriers have invested millions in optimization software to help improve their ability to get drivers home more regularly. Carriers have started regional operations that allow their drivers to get home several times during the week.
Critics also contend that paying drivers by the mile encourages them to violate their logbooks, even though the ever-improving safety record suggests otherwise. Market forces in the form of insurance costs have been a far more effective way to improve safety than any mandate from Washington.
Much is also made of the Truckload Carriers Association’s study on driver waiting time, showing that average drivers may spend 37.5 hours a week waiting for their trucks to be loaded or unloaded in addition to time behind the wheel. Since drivers receive little or no pay for waiting, their effective pay rate per hour worked — driving, freight handling and waiting time — is significantly lower than their non-driving counterparts. What critics fail to note is that the TCA commissioned the study as a starting point in tackling the problem of excess waiting time by drivers. The study was done at members’ requests.
Read any recruiting ads, and the evidence of the industry shifting away from driver-unfriendly freight or excess waiting time is undeniable. Carriers are promising “No Touch Freight,” “No East Coast Freight” or “No Forced Dispatch.” If their customers demand they haul this freight, these carriers are increasing pay for freight handling and offering guaranteed minimum pay or bonus pay for hauling New York City freight.
TCA is also criticized for reaching out to new demographic groups as proof of how poorly the industry treats its labor force. Instead of celebrating the industry’s efforts, critics imply that the intention of reaching out to blacks, Hispanics and females is to find new groups of labor to exploit. They make the arrogant assumption that these groups are incapable of making an economic decision on their own. Even though truckload driving doesn’t pay what it used to in real terms, the wages may represent a real step up the economic ladder for these groups. It is also a certainty that some of the drivers brought in by outreach programs will some day become carrier owners.
Have all carriers risen to the challenge of improving driver retention? The simple answer is of course not. Many carriers cling to old ways and practices. Deregulation showed what happens to trucking companies that couldn’t adapt to a changing industry.
Current economic conditions have eased the driver shortage. Many displaced workers, some former drivers, are coming into the industry to find work without having to relocate their families. I hope carriers will recognize that even though their trucks are full of drivers, the shortage is not over. They will use this as an opportunity to encourage many of these workers to stay in the trucking industry.
The writer, a former truckload industry executive, is a management consultant and the editor of The National Survey of Driver Wages. He is also the vice-chairman.
This story appeared in the Dec. 17 print edition of Transport Topics. Subscribe today.
