ATA reports ongoing progress in lower driver turnover rates

For the first quarter, ATA reported that the annualized turnover rate for large truckload carriers with more than $30 million in revenue headed up by 3% to 74%, which the ATA said is at a “near-historic” low point and down 15% annually.

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As was the case in the fourth quarter of 2016, data recently issued by the American Trucking Associations (ATA) for the first quarter of 2017 showed continuing signs of progress for motor carriers in their efforts to fill driver seats, an issue, which has plagued the sector for several years.

For the first quarter, ATA reported that the annualized turnover rate for large truckload carriers with more than $30 million in revenue headed up by 3% to 74%, which the ATA said is at a “near-historic” low point and down 15% annually.

This first quarter turnover rate is in line with the fourth quarter of 2017, which came in at 71% and is the lowest rate in more than six years and was down from the third quarter of 2016, which saw the turnover rate come in at 81 percent––its lowest level at the time since the second quarter of 2011. The last two quarters of large carrier driver turnover rates continue a fairly recent trend of good news to a large degree with the third quarter of 2016 at 71% and the second quarter of 2016 at 83%.

ATA said that the turnover rate for smaller truckload fleets was down increased 2% to 66%, which is 22% less than the first quarter of 2016, and is in line with the 64% recorded during the fourth quarter of 2016. The less-than-truckload turnover rate for the first quarter was up 2% to 10%. The turnover rate for LTL carriers is typically much lower than the rate for truckload carriers.

“The slight uptick in turnover, despite weak freight volumes in the first quarter, may be indicative of a tightening in the driver market,” said ATA Chief Economist Bob Costello in a statement. “The situation bears watching because if the freight economy picks up significantly, turnover will surely accelerate – as will concerns about the driver shortage.”

The ATA executive previously said that ongoing softness in the freight economy contributed to an easing of the market for drivers and a reduced turnover rate, adding that at the end of the third quarter of 2016 there were indications that the end of the high inventory cycle may was in sight.

What’s more, he added if freight demand truly picks up and subsequently comes with increased demand for drivers and higher turnover rates, which will likely be back to the more familiar range of the mid-to-high 90 percent range, an unwelcome statistic to be sure, as it represents a “here we go (or are) again” type of scenario, with no clear end in sight for addressing the shortage and high turnover rates.

In October 2015, the ATA issued a landmark report, entitled “Truck Driver Analysis 2015,” whose chief findings cited how the current shortage of truck drivers now stands at almost 48,000 and has the potential to go higher, due in large part to industry growth and drivers parking their trucks on the way to retirement and also noting that if current trends remain intact, the driver shortage could rise to around 175,000 by 2024.

Even with an increased onus on augmenting driver training, retention, and compensation packages, many carriers are still struggling with how to fill the empty seats. The ongoing driver shortage still serves as a major factor for tight over the road capacity, which has been burdensome for shippers in that they need to pay higher rates in order to get their freight moved in a timely and efficient manner.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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