More truck drivers are leaving larger truckload carriers and signing on with smaller fleets, according to data released Thursday by the American Trucking Associations (ATA). Larger carriers have trimmed their payrolls, while smaller carriers are hiring drivers, ATA chief economist Bob Costello said while announcing the ATA’s third-quarter annualized driver turnover rate.
The annualized driver turnover rate for large truckload carriers rose 9 percentage points in the third quarter to 96 percent, the ATA said. That’s the biggest quarterly jump at large carriers — those with more than $30 million in annual revenue — since the 2016 second quarter. That leap was almost matched by a 6-percentage-point increase in turnover at smaller carriers.
“While turnover rose at both small and large carriers, the reasons were quite different,” Costello said in a statement. “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 percent.” That was a reversal of hiring trends in the first half.
“During the first two quarters of the year, larger carriers added drivers, but in the third quarter they started right-sizing their fleets,” Costello said. “Conversely, smaller companies increased their driver pool in the third quarter for the first time this year.”
Trucking workforce expands, contracts
For-hire trucking employment increased by 64,700 workers year over year in the third quarter, according to US Bureau of Labor Statistics (BLS) data, a 1.4 percent annualized gain. However, the trucking labor pool tracked by the BLS has shrunk 1.1 percent since July, falling each month from a high point of 1,538,800 employees, a further sign of weak US freight demand.
Even so, the preliminary BLS data for November shows trucking employment numbers essentially flat year over year in that month, and up 2.2 percent from January 2019. The BLS numbers rose throughout 2018 before dipping in early 2019 and cresting last summer.
Shippers may have had no trouble finding trucks this year, but truckload carriers say they are still struggling to find qualified, experienced drivers who will stay in their truck cabs — as seen in the third-quarter leap in turnover rates. The turnover rates represent the overall percentage of drivers who must be replaced each year. Usually, they rise when freight demand is high.
The leap in rates during a soft period for trucking shows demand for drivers is still a pressing issue for carriers, and that opportunities are opening for truck drivers within trucking and perhaps elsewhere, such as in construction. The turnover rates also promised renewed pressure to raise driver wages, one of the few pricing levers carriers still have.
The turnover rate at less-than-truckload (LTL) carriers dropped four points from the second quarter to an annualized rate of 9 percent, its lowest level since the end of 2017. The low LTL turnover rates reflect the higher pay and more regular and localized operations in the LTL sector, where even linehaul intercity drivers are home most nights of the week.