Driver turnover story is far from over, but ATA data is encouraging

While driver turnover and the ongoing driver shortage tend to go hand in hand and, more often than not, with a typically negative connotation, data issued by the American Trucking Associations (ATA) is on the positive side.

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While driver turnover and the ongoing driver shortage tend to go hand in hand and, more often than not, with a typically negative connotation, data issued today by the is on the positive side.

ATA reported that the turnover rate at large truckload carriers (with more than $30 million in annual revenue) saw an 11% decline in the third quarter, following two quarters of increased turnovers, which has really been the norm for more than a while.

With the 11% decline, the large carrier turnover rate now stands at 87%. While that still “seems” high, it is actually the lowest point going back to the first quarter of 2017, when it checked in at 74%.

What’s more, it helps to counter the 4% increase in the second quarter, which brought the annualized rate to 98%, which was 10% above the large carrier turnover rate at the end of 2017. The large carrier driver turnover rate for the first quarter of 2018 was 94%, another high number, especially when compared to the third quarter of 2018.

On the other side, the driver turnover rate for small carriers, or those with less than $30 million in annual revenue, in the third quarter, was flat at 72%, with the turnover rate for less-than-truckload carriers down 4% to 10%.   

explained in a statement that there are a few ways to interpret this third quarter data.

“First, large pay increases fleets have been offering appear to be working, and drivers are remaining with their current carrier,” he said. “Second, we did see a softening of freight markets in the third quarter from the incredibly strong pace it had set earlier in the year. Historically, softer freight volumes lead to lower driver turnover.”

Even with historical trends showing a reverse in the third quarter, a lot of work needs to happen to call it more than a blip on the radar.

Yes, as Costello said, things like increasing driver pay and drivers not jumping from carrier to carrier are clearly working. But, as he has said before, the extreme tightening of the driver market – driven by solid freight demand – will continue to challenge fleets looking for qualified drivers.

Despite the high turnover rate, motor carriers have been very aggressive in trying to ameliorate the current situation though efforts like raising driver sign-on bonuses, increasing pay, and providing financial aid options for potential drivers to attend driver training schools to get them their CDL licenses, among other things.  

Earlier this year, the ATA’s Costello said that anecdotally, carriers continue to struggle both recruiting and retaining quality drivers – leading to increasing wages, adding that the tight driver market should continue and will be a source of concern for carriers in the months ahead.

“Turnover is not a measure of the driver shortage, but rather of demand for drivers,” he said. “We know that as freight demand continues to rise, demand for drivers to move those goods will also rise, which often results in more driver churn or turnover. Finding enough qualified drivers remains a tremendous challenge for the trucking industry and one that if not solved will threaten the entire supply chain.”

A recent conference call hosted by , featuring and , presented a potentially positive outlook for the driver shortage showing signs of improvement, with the pair saying they expect driver wages to be higher in 2019, in the 6%-to-10% range annually, with the caveat, though, that driver wages will not rise unless they are commensurate with rate growth.

explained in a research note highlighting this call that his firm believes that the driver shortage is a simple commodity shortage driving truckload rates higher.

Again, one quarter does not mark a trend, nor a sudden shift. But, at the same time, this ATA data is encouraging. Let’s hope ATA’s fourth quarter driver turnover data continues to tell the same story.


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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