Turnover Falls at Large TL Carriers

13-Point Drop to 117% Is First Decline Since ’01

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Driver turnover at large truckload carriers dropped 13 percentage points last year — the first decline since 2001 — while it rose by an identical percentage at smaller truckload carriers, according to a survey produced by American Trucking Associations.

Large truckload fleets reported a turnover rate of 117% during 2006, the survey showed, while the smaller carriers had a rate of 109%.

Meanwhile, less-than-truckload carriers reported a three-point decline in their average turnover rate to 12%. Bob Costello, ATA’s chief economist, said a drop in freight volumes last year “played a big role in the turnover declines for large carriers,” as drivers are less likely to leave their fleets in search of higher pay or benefits at other carriers when load levels are declining.

Costello noted that 2005 freight volume was swollen by the rescue and rebuilding efforts after major hurricanes ravaged the southeastern United States, where demand for drivers increased. While freight volume in 2006 was robust, it was below the levels of the previous year.

For 2006, ATA’s truck tonnage index fell 1.7% from the year before. Costello attributed the increase in turnover at smaller TL carriers on another market change: longer hauls.

ATA reported that the average length of haul for the smaller fleets jumped 11% during the year, compared with a 2% increase in haul length for bigger fleets.

The survey said this disparity was caused by the departure of many larger carriers from the longhaul market, in favor of an increasing focus on regional routes. Shorter hauls lead to drivers’ getting home more often, analysts said, which helps reduce turnover.

The last time large TL fleets recorded a decline in their turnover rate was in 2001, when the rate was only 94%. Costello warned that turnover “could rise to unprecedented levels” when freight volumes increase again.

David Owen, president of the National Association of Small Trucking Companies, said turnover “remains the No. 1 priority” for his members. Many of them, he said, would like to expand their fleets but run the risk of being unable to address drivers’ problems promptly.

“The key to reducing turnover at small firms is to ensure that drivers are getting a consistent number of miles on a weekly basis,” Owen said.

Many large carriers promise drivers an unrealistic number of miles when they are hired, he said, but then they do not deliver on that promise with enough loads.

Meanwhile, an executive at large truckload carrier Contract Freighters Inc. said the company’s turnover rate fell last year to 83% from 100% in 2005.

Randy Cornell, CFI’s vice president of safety, said providing drivers with better information about pay, along with more time at home, has helped reduce the company’s churn rate. In many cases, a driver might want a day off for a child’s birthday or other special occasion, Cornell said.

“You can either value what’s important to drivers, or you can be stuck with a turnover rate of 130%,” he said.

CFI, Joplin, Mo., also is giving drivers loads that the company might have passed up previously because of the tougher pricing environment, Cornell said. However, that is preventing more drivers from seeking other jobs.

“We need to do that because when the economy gets better and freight volumes improve, we will need those drivers to handle the additional work,” he said.

An executive with large truckload carrier Zimmerman Truck Lines, Mifflintown, Pa., said the company has kept its turnover around 38% in recent years by focusing more on nonfinancial issues.

“We lose more drivers to family-related issues than pay,” said Mark Zimmerman, the company’s vice president. He said dispatchers understand the importance of giving drivers time off on short notice if a family emergency arises.

The problem is that “some drivers have become so desensitized because of bad experiences at prior jobs that they will take off,” rather than notify their dispatcher about a specific issue.

Zimmerman also said the company is more mindful of where their trucks are located as they try to find backhauls for drivers more quickly.

For just the fourth quarter of 2006, ATA said the churn rate for large truckload carriers was 121%, unchanged from the third quarter.

The fourth-quarter rate for small truckload firms was 112%, down two points from the third quarter. The LTL turnover rate was 10% in the fourth quarter, down from 14% in the third quarter.


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