Large fleets reduce driver count; turnover rate hits 96%

The turnover rate for truck drivers at large fleets rose back to nearly 100%, a report from the American Trucking Associations shows.

In the third quarter of 2019, the turnover rate at large fleets – those with more than $30 million in annual revenue – jumped nine points to an annualized rate of 96%. According to the ATA’s quarterly employment report, the turnover rate reached its highest point since 2018. In addition, the nine-point increase was the largest quarterly jump since the second quarter of 2016. The turnover rate at smaller carriers rose six points to 73%. The turnover rate for LTL carriers dropped four points to 9%.

“Counterintuitively, we saw turnover rise even as the freight demand was relatively soft,” said Bob Costello, ATA’s chief economist. “While turnover rose at both small and large carriers, the reasons were quite different. Large carriers reduced the number of drivers they employed, in keeping with lackluster freight levels, but smaller carriers added to their driver pools, increasing their number of drivers by 1.9%.”

Costello added that large fleets add drivers during the first two quarters of the year but then started “right-sizing” their fleets in the third quarter.

Driver shortage?

Both the high turnover rate and the large fleets’ decision to cut back on its number of drivers appear to be in conflict with ATA’s continued cries of a driver shortage.

“Though large carriers often profess a driver shortage, their own comments and data clarify that the issue is a driver retention problem,” said Andrew King, of the OOIDA Foundation. “Freight rates took a hit in 2019 primarily due to overcapacity. In other words, there were too many trucks and drivers compared to the amount of freight. Thus, large fleets have announced they are reducing their truck orders and driver counts, which refutes their claims of a driver shortage.”

OOIDA has long refuted claims that there is a driver shortage, saying that large turnover rates indicate that the big fleets are able to find qualified CDL holders every year, but they are unable to keep them, often because of low pay and poor working conditions.

In March, a report from the U.S. Bureau of Labor Statistics affirmed OOIDA’s stance, saying the evidence does not support the theory of a labor shortage within the trucking industry. The report added that increasing wages could alleviate any issues with recruitment and retention.

DRIVE-Safe Act

None of this, however, has slowed the ATA’s charge that the industry has a shortage of truck drivers. That message is the fuel behind several bills in Congress, including the DRIVE-Safe Act, which would allow 18-to-20-year-old truckers to cross state lines. HR1374 is up to 127 co-sponsors, and S569 has 33 co-sponsors.

“I really can’t think of a worse response to the myth of a driver shortage than to lower the driving age or reduce the already low standard to get a CDL,” OOIDA President Todd Spencer said at a House subcommittee hearing in June. “This is really a highway safety issue. What’s not a myth is that new drivers crash more often and that younger drivers crash more often. There is no substitute to experience when it comes to safety and doing thing that help perpetutate the churn for driver turnover is not only counterproductive to safety, but it undermines the economics of all drivers.”