The annualized driver turnover rate at large truckload carriers shot past 100 percent in the second quarter, rising above that percentage figure for the first time in more than four years, according to the American Trucking Associations.
It’s not a milestone trucking companies will celebrate. A 100 percent turnover rate means truckload carriers need to replace the equivalent of their entire driver pool each year just to maintain employment and capacity at the same level.
At a 100 percent rate, driver turnover can cost larger truckload companies hundreds of thousands if not millions of dollars a year. If recruiting one driver costs $5,000, on average, a company with 500 drivers would pay $2.5 million a year.
The turnover rate wasn’t 100 percent in the quarter, however. It was higher.
For truckload carriers with more than $30 million in revenue, driver turnover hit an average of 106 percent in the second quarter, the trucking association said Wednesday, the highest industry turnover level since the fourth quarter of 2007.
That leap represented a 16 percentage point increase in the turnover rate from 90 percent in the first quarter, the ATA said — a sharp increase in a quarter that saw GDP growth slow to 1.7 percent and slower revenue growth at many carriers.
Smaller truckload carriers saw turnover increase by 15 percentage points in the previous quarter to 86 percent — up 31 points from the 2011 fourth quarter.
The rapid increase in turnover heightens carrier concerns over the supply of qualified drivers and shipper worries about truckload capacity and pricing as they prepare for the fourth quarter and pre-holiday peak shipping season.
“We continue to see steady, albeit sluggish, growth in freight volumes, which increases demand for drivers,” ATA Chief Economist Bob Costello said.
Last year, the turnover rate for large carriers averaged 83 percent, the ATA said. The annualized turnover rate bottomed out at 39 percent in the first quarter of 2010.