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Turnover at large TL carriers stays above 100%; rate at small TLs hits 6-year high

The turnover rate for less-than-truckload fleets averaged just 8 percent in the second quarter, down from 9 percent in the previous quarter. (Courtesy: CON-WAY FREIGHT)

The Trucker News Services

12/11/2012

ARLINGTON, Va. — The annualized line-haul driver turnover rate at large truckload fleets remained over 100 percent for the second straight month, and the churn at smaller truckload carriers rose to a five-year high, according to American Trucking Associations’ Trucking Activity Report.

At fleets that report more than $30 million in annual revenue driver turnover dipped 2 percentage points to 104 percent, just off the five-year high of 106 percent reported in the second quarter.

It is the first time since the fourth quarter 2007 and the first quarter 2008 that the turnover rate has pierced the 100 percent barrier in consecutive months.

“Increasing competition for quality drivers, coupled with gradual, albeit choppy, growth in demand for trucking services, continues to put pressure on the driver market,” said ATA Chief Economist Bob Costello.

At fleets with less than $30 million in annual revenue, this competition contributed to an eight-point jump in driver turnover during the quarter.

At 94 percent, turnover among small fleets is now at its highest point since the first quarter 2007.

“These numbers continue to reflect a tight driver market, and an actual shortage for drivers,” Costello said. “We believe the industry is actually short between 20,000 and 25,000 drivers, but if freight volumes were to accelerate, I would expect that number to grow and grow rapidly.

The turnover rate for less-than-truckload fleets averaged just 8 percent in the second quarter, down from 9 percent in the previous quarter.

This marks the fourth straight quarter that the LTL turnover rate was less than 10 percent.

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Motor carriers are continuing to struggle to find qualified, professional drivers, the ATA said, noting that in a study released this year, 90 percent of for-hire truckload (TL) carriers said they cannot find enough drivers who are capable of meeting Department of Transportation (DOT) requirements.

For safety and other reasons, carriers are, generally speaking, very selective in their hiring practices and, therefore, cannot always find the drivers they would like to hire.

What’s more, government regulations are expected to increase the need for more drivers, the ATA said.

The federation predicted that if changes to the Hours of Service rule are implemented in July 2013, motor carrier productivity will likely be reduced by as much as 3 percent.

“As a result, carriers will have to add more trucks and drivers to haul the same amount of freight, thus exacerbating the shortage,” an ATA report said.

Compliance, Safety, Accountability (CSA) will likely further add to the driver shortage, the ATA report said, noting that recent data shows that approximately 7 percent of drivers generate a significant portion of the CSA scoring problems for carriers.

“While not all 7 percent will be pushed out of the industry overnight, over time, CSA and the related pre-employment driver screening program facilitated by the government will exacerbate the driver shortage,” the report said.

Mandated use of electronic logging devices (ELDs) is unlikely to intensify the driver shortage in a significant manner, according to the ATA.

“Data shows that about 4 percent of drivers violate weekly HOS limits, so the likely impact of ELDs on the shortage is relatively small,” the ATA report said. “In addition, the vast majority of carriers that are voluntarily implementing ELDs today say that they can eventually boost efficiency because they can better match drivers with loads. In other words, ELDs facilitate better driver and operations planning. However, there is a chance that a small number of current drivers will leave the industry due to more government oversight with ELDs, but that number is unlikely to have a significant impact on the driver shortage.”

The Trucker staff can be reached for comment at editor@thetrucker.com.

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