The annualized turnover rate for large truckload carriers was 87% in the second quarter of 2015, according to a report issued this month by the American Trucking Associations.
That means that nearly 9 out of every 10 truckers need to be replaced each year, a testament to just how serious the shortage of qualified truck drivers is today
Lower but Still Too High
The Q2 turnover rate represents a 3% increase from Q1 2015, when it was the lowest it had been since the second quarter of 2011. This year’s first quarter also was the first time it dipped below 90% since 2011. In 2014, the annualized turnover for large truckload carriers — defined as truckload fleets with more than $30 million in revenue — averaged 95%.
For small truckload fleets — which are companies with less than $30 million in revenue – the turnover rate was 76%, which is substantially lower than the large fleet rate, but still astonishingly high.
Reasons for Trucker Shortage
Recruiting, training and supervising nearly your entire truck driver staff every year is an expensive and time-consuming proposition for nearly every trucking company today. So why is the turnover so high?
According to the report, the biggest reason is an aging workforce.
“There are many reasons for the current driver shortage, but one of the largest factors is the relatively high average age of the existing workforce,” the report states. “The current average age in the OTR (Over-the-Road) TL (Truckload) industry is 49.”
About half of the demand for new drivers comes because of the need to replace retiring drivers.
Another factor is lack of diversity. Only 5.8% of all truck drivers are women and 38.6% are minorities, which is up 12% from the 26.6% of drivers who were minorities in 2001.
Plus, the trucking industry is growing, accounting for about 33% of the need for more drivers.
Throw Money at the Problem?
Another major cause of the driver shortage is the traditionally low wages truck drivers earn.
This has prompted some trucking companies to consider something they have long avoided: Paying higher wages.
Some of the nation’s biggest trucking firms — including Swift Transportation, Con-way Truckload, and US Xpress — are offering higher wages in an effort to secure more new drivers and to reduce driver turnover.
Earlier this year, US Xpress announced that it was instituting an average 13% increase in base mileage pay for over-the-road solo truck drivers, effective August 25. The company’s chief operating officer, Eric Fuller, said that the move was a direct result of the company’s need to recruit and retain qualified drivers.
Problem Getting Worse
The truck driver shortage is expected to get worse before it gets better, accrding to Bob Costello, chief economist for the ATA. By 2025, the trucking industry will need to hire an estimated 8890,000 new drivers — or an average of 89,000 per year.
“Our work shows the great and growing need for drivers,” Costello said in a news release. “But we also highlight several solutions, including increasing driver pay, getting drivers more time at home,as well as improving the image of the driver and their treqatment by all companies in the supply chain.”
“Make no mistake, the driver shortage is a challenge,” said Costello, “but not an insurmountable one.”