Truckload Drivers Staying Put

By Jonathan S. Reiskin, Associate News Editor

This story appears in the Jan. 4 print edition of Transport Topics.

Driver turnover at large truckload carriers fell in the third quarter to 43% a year, the lowest level since American Trucking Associations began tracking the data in 1995.

The severe recession has sliced the turnover rate for larger truckload firms — those with more than $30 million in annual revenue — to well below the figures of 100% and more that were common as recently as two years ago. The survey results, included in a December report by ATA, correspond with overall trucking employment figures on the decline (11-16, p. 5).

“This shows how hard trucking has been hit,” said Bob Costello, ATA’s chief economist. “Employment has been contracting in this industry for 11 straight quarters.”

The ATA statistic combines voluntary departures, retirements, layoffs and firings.

Some companies report trying to improve the quality of their smaller driver rosters, while others said they are cutting pay and slashing driver recruitment and training expenses — a move that could cause the driver shortage to roar back when the economy eventually recovers.

“There are clearly more drivers around than there are good driving jobs. Our turnover rates have fallen from the mid-40s to the mid-30s,” said Paul Truman, president of Truline Corp. of Las Vegas, a small truckload carrier under the ATA standard.

For small truckload carriers, third-quarter turnover was also 43% a year, a small increase after the level hit bottom during the second quarter of 2009 at 42% (9-28, p. 1; click here for previous story). During the second quarter, turnover for large truckload companies was 52% a year.

Less-than-truckload carriers have not been hit as hard by turnover issues. The average rate for that sector of the industry was 10% a year during the third quarter, ATA said.

Costello said it may be the case that 40% a year is about as low as driver turnover can go. He also said the driver shortage of years ago has not been solved and that eventually it will return, “but it may take a few years.”

“There is a huge lack of opportunity in the industry now, as virtually every carrier has gotten smaller,” said consultant Steve Prelipp of Chapel Hill, N.C. Two years ago, he was advising Truckload Carriers Association members at a conference on how to cope with turnover rates in excess of 110% a year.

“But now,” Prelipp said, “management expects recruitment departments to keep turnover low but not spend any money.”

“Drivers stopped leaving because pay rates at all the carriers are so close, they couldn’t find better,” said Eric Stegman, a driver recruiter who was laid off by an Ohio truckload carrier after four years of experience. Now he’s a freight sales agent.

“Two or three years ago, I really had to sell drivers to come onboard. Now, the safety director has taken over recruiting, too, and his voice mailbox is full,” Stegman said.

Truline’s Truman said his company has received a substantial break because Las Vegas has an abundance of unemployed construction workers.

“Drivers who operated concrete trucks for $23 to $27 an hour now face a situation where those trucks are not rolling,” said Truman, adding that he was able to make an unusual hire as his chief recruiter.

One of the nation’s larger truckload carriers closed its driver training school, so Truman hired the school’s former head as his top recruiter.

“I wonder about three years from now, as we look out.  . . . I’m concerned the driver shortage will come back and be much worse [because of the lack of recruitment today]. If freight improves, we’ll all get caught short on drivers,” he said.

Some carriers are taking the opportunity to weed out drivers with poor safety records.

“Safety departments are going through carriers, and if a driver is on the bubble, they’ll get rid of him. They’re weeding out because of the economy,” said Stegman.

He also sees a lack of young talent brought in to replace drivers 50 years old and more, who soon will be retiring.

“There will be a big driver shortage again,” Stegman said.

“Driver training capacity has been depleted because there are no jobs available now,” said consultant Prelipp, a former manager with Schneider National and Heartland Express.

“Until cash flow and profit margins get better, carriers will still be looking for ways to reduce costs, including lowering head counts,” he said.

Truman and Prelipp also said some carriers are at least investing more in drivers as shippers, who are enjoying numerous transportation options, are asking for more and better service, even if they are not keen on paying extra for it.

“Whether it’s technology, loading or hazardous materials, customers are expecting more and paying less, so we’ve invested in training,” Truman said.