Quarterly turnover at large US truckload fleets rose to an annualized rate of 97% during the first quarter, according to the latest American Trucking Associations’ Trucking Activity Report. Smaller truckload fleets were slightly “better off” with a turnover rate of 82%.
After more than 20 years of reading such numbers, it still never ceases to amaze me how so many in our industry have come to accept them as the norm; part of the cost of doing business in trucking.
Now I know that LTL turnover rates are much lower; Canadian turnover rates for either LTL or TL are not as high as that experienced in the US, and actually showed improvement just before the recession. But the reality is that drivers remain a precious commodity which the industry by and large has yet to figure out how to retain. More than two-thirds of driver turnover is attributable to drivers quitting their jobs.
The many letters to the editor we receive from drivers usually point to low pay as a main reason for quitting. Before the recession, when fleets had several years of rising rates to bolster their finances, domestic and international longhaul drivers were earning between $40,943 and $69,640 annually with the average salary being $55,797.
Almost every major fleet executive I speak to these days talks about the need to do boost driver pay. But with rate increases being as meagre as they have been during this slow recovery, how much flexibility do fleets really have to address driver pay in a meaningful way?
I don’t have the solution myself and I’ve yet to hear a good answer from anyone else. But I do know the industry is running out of time to figure it out. That’s because the driver pool has developed far too many leaks.
Consider that data from the 2011 National Household Survey indicates that the average truck driver age is now 46 years. Only 8.5% of drivers are in the 30 to 34 age group and only 8.8% are in the 20-29 age group. Meanwhile, drivers aged 55 and older make up more than a quarter of the driver pool and the number of drivers aged 65 and up is on the rise.
As Vijay Gill, principal research associate at the Conference Board of Canada points out: for the trucking industry, more than in others, ‘new’ sources of labour are delayed retirements. Which is nothing more than a “bandage solution.”
As an industry we can continue to recruit 40 year olds rather than 25-year olds. We can continue to live with high turnover rates as a cost to doing business. But sooner rather than later the numbers will catch up with this game and it won’t be pretty. Every 40 year old potentially has 25 years of driving left, whereas a 25 year old potentially has 40 years. In the long run then, for every 25 year old that the industry does not recruit, it will have to recruit close to two 40 year olds. And retain them.
Forty year olds bring the advantage of experience and maturity to their driving careers. But they expect better pay and are less willing to put up with nonsense.
With more than 25 years of experience reporting on transportation issues, Lou is one of the more recognizable personalities in the industry. An award-winning writer well known for his insightful writing and meticulous market analysis, he is a leading authority on industry trends and statistics. All posts by Lou Smyrlis