Truckload carriers must replace virtually their entire driver workforce each year.
Have you hugged a truck driver today?
If that was not high up on your personal to-do list, consider: one of the biggest impediments to keeping the flow of goods moving in this country is the inability of trucking companies, particularly truckload carriers, to keep drivers in their cabs.
Despite paying higher wages, the annualized driver turnover rate at large truckload carriers rose to 97 percent in the third quarter last year, the American Trucking Associations said, the 11th consecutive quarter the turnover rate has been above 90 percent at large trucking companies. A shortage of qualified truck drivers has become the biggest check on any expansion of truck capacity as the U.S. economy grows.
The turnover rate is a measure of how many truck drivers a carrier must replace on an annual basis to maintain a driver pool, leaving out any net gain or loss in employment. A 100 percent turnover rate means a carrier needs to replace the equivalent of its entire driver pool each year.
That’s an increasingly expensive task that drives up costs for carriers and, inevitably, their shipper customers. If the cost of hiring a driver averages $5,000, a company with 200 drivers and a 100 percent turnover rate would spend $1 million a year on recruitment alone.
High turnover also makes it difficult for fleets to operate efficiently, maximize utilization of tractors and trailers, and meet customers’ service expectations. All those difficulties translate to higher door-to-door transportation costs in supply chains that touch the U.S.
The picture is markedly different at less-than-truckload (LTL) carriers, where the turnover rate was 13 percent, flat from a year earlier and up two percent from the second quarter. But the truckload driver retention issue is not confined to the U.S., with other developed countries and regions including Canada, Western Europe and Australia also facing high turnover rates.
Without truck drivers, nothing moves, so show them some love. If not a big hug, maybe candy and a dozen roses?