As was the case in the second quarter, annualized third quarter turnover rates, for both large and small truckload carriers, again saw significant gains, in the third quarter, according to data issued this week by the American Truckload Associations (ATA).
ATA officials said that the turnover rate for truckload carriers with more than $30 million in annual revenue headed up 10% to 92% on an annualized basis, while the turnover rate for smaller truckload carriers saw a 14% increase to 74%. Even with these gains, ATA observed that that average turnover rate for 2020 is lagging 2019. And less-than-truckload (LTL) saw the annualized turnover rate increase 2%, to 14%.
This quarterly data stands in stark contrast to the second quarter, which was a period in which the impact of the COVID-19 pandemic was tumultuous both for trucking and the broader economy, according to the ATA, which saw the turnover rate for carriers with more than $30 million in revenue fall 12%, to 82%, for the lowest level going back to the end of 2018, with smaller truckload carriers off 10%, to 60%, for the same period, for its lowest quarterly level going back to the fourth quarter of 2011.
“After a calamitous second quarter, trucking—along with the rest of the economy—began recovering in the third quarter, leading to a tightening of the driver market,” said American Trucking Associations Chief Economist Bob Costello in a statement. “With a more robust freight market, we saw an increase in carriers seeking drivers, which led to increased turnover. Additionally, the driver pool has decreased this year for a host of reasons, including fewer new drivers coming into the industry as truck driver training schools train less drivers due to social distancing requirements. Ironically, turnover bouncing back is a good sign for the economy and for trucking. The second-quarter drop was almost entirely the result of COVID, and with scientific light at the end of the tunnel, it is possible we will see continued strong freight demand into 2021, and corresponding increases in demand for truck drivers. And, driver pay continues to rise as competition for drivers is intense.”
While market conditions are much different now, than they were prior to the COVID-19 pandemic, many issues related to driver turnover remain consistent.
For example, in early 2019, motor carriers took steps to be aggressive in trying to ameliorate the high turnover 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.
And the ATA’s Costello said around that time 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.”
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