Challenges in the North American Trucking Industry
The North American trucking sector has long faced significant issues with driver retention, which refers to the percentage of drivers who remain with a carrier versus those who leave. The nature of long-haul, for-hire trucking often requires both employees and independent contractors to be away from home for days or weeks. This remote working environment, coupled with transit delays (both while driving and at customer locations) and health issues related to lifestyle choices (such as sleep deprivation and unhealthy diets), primarily contributes to both short-term and long-term driver turnover.
Turnover Trends in Trucking
Surveys conducted among TCA Profitability Program participants indicate that a substantial portion of turnover in the trucking industry involves drivers with little experience, specifically those who have been with a company for less than 180 days. For surveyed carriers, over 85% of annual turnover is attributed to this short-term category. This data supports the idea that the retention challenges in the industry stem from the difficulty drivers, especially long-haul ones, have in adjusting to their working conditions. Notably, longer average hauls correlate with higher turnover rates.
Annualized Turnover Rate Calculation
The formula for calculating the annualized turnover rate using a monthly method is:
((# of Drivers Departed) * 12) / (Average of Driver Count at Beginning and End of Month)
Understanding Turnover Rates
This formula interprets the turnover data by projecting if the reported rate for the current period persisted throughout the year. The following statistics reflect turnover rates for various trucking segments:
- TPP Participants (All): 97.50% (Q3 2019)
- TPP Participants (1-249 Trucks): 94.61% (Q3 2019)
- TPP Participants (250+ Trucks): 99.11% (Q3 2019)
- ATA Large Carrier Turnover: 96% (Q3 2019)
- ATA Small Carrier Turnover: 73% (Q3 2019)
- ATA LTL Carrier Turnover: 9.00% (Q3 2019)
Sources: TCA Profitability Program (TPP) Participants, American Trucking Associations (ATA)
Main Factors Influencing Driver Turnover
Several key factors contribute to driver turnover in the industry:
Human Nature
As inherently social beings, humans require interaction, making occupations that limit communication, like truck driving, particularly challenging. In recent years, many for-hire companies have aimed to reduce the average trip length to enable drivers to spend more time at home. The theory is that increasing home time will lead to lower turnover rates, aided by supply chain adjustments and a rise in e-commerce.
Economic Factors
A significant portion of long-haul drivers is compensated on a per-mile basis, leading to considerable fluctuations in earnings. This can create budgeting difficulties, especially for new drivers adjusting to inconsistent pay. To mitigate turnover associated with income variability, some carriers have begun to explore guaranteed or salary-based compensation structures.
Health Issues
Jobs that require frequent travel often present workers with numerous unhealthy food choices. The convenience of fast food has led to high obesity rates and related health problems among truck drivers. Unfortunately, health-related turnover continues to be a major factor in driver attrition.
Expectations vs. Reality
While trucking can offer above-average pay relative to educational requirements, this comes with challenges. Many new drivers are confronted with a disconnect between their expectations of scenic routes and the reality of deteriorating infrastructure and supply chain inefficiencies, ultimately impacting their job satisfaction.
