Driver Shortage Troubles Trucking Firms

by Mark Friedman  on Monday, May. 14, 2012 12:00 am  

A good truck driver is hard to find, especially when the economy is rolling.

Since the annual turnover rate for truck drivers bottomed out at 39 percent during the first quarter of 2010, the rate has more than doubled for trucking companies that have more than $30 million in annual revenue, according to the American Trucking Associations of Arlington, Va.

The latest figures show the turnover rate stands at 88 percent for the fourth quarter of 2011, which was down 1 percentage point from the previous quarter.

But trucking executives aren’t cheering the decrease.

“This reprieve, while surprising, is likely temporary,” the ATA’s chief economist, Bob Costello, said in an April news release. “The turnover rates were going down during the recession,” he said. “It’s back on the rise again.”

Costello said that as the economy improves, more items will be shipped, which “will cause the driver market to tighten and the turnover rate to rise.”

Others are preparing for the rates to climb.

“From what we see from trends and analysts, we’re expecting it to get worse,” said Rochelle Bartholomew, CEO of CalArk International Inc. of Mabelvale.

Bartholomew said the aging driving force coupled with fewer young people entering the trade had made it harder to find drivers.

In addition, new government regulations regarding the hours a truck driver can operate, which go into effect in July 2013, will cause a 3 to 8 percent loss of productivity for each driver, she said.

The U.S. Department of Transportation will reduce the maximum number of hours a truck driver can work within a week from 82 to 70.

“We’re go-ing to need more resources,” Bartholomew said.

“More drivers and more trucks to make the same loads.”

The state of Arkansas is trying to increase the number of truckers by offering more classes through colleges and the Arkansas Truck Driver Training Pilot Initiative.

(See also Students Line Up to Be Truck Drivers.)

But Lane Kidd, president of the Arkansas Trucking Association, said the only way the trucking industry is going to reduce turnover is to offer higher wages and find a way to get drivers home more often.

Higher Pay

Some companies are planning to pay drivers more while trying to improve working conditions for drivers.

“Unfortunately, there’s not one thing a carrier can do that would stop turnover,” said Bernie Kremer, vice president of Dancor Transit Inc. of Van Buren. “If there was, I can promise you, … people would have figured it out years ago and become a multimillionaire by selling the solution to the trucking industry.”

Between 2003 and the first quarter of 2008, the turnover rate for truckers was more than 100 percent, which meaning that a position was vacated and filled more than once within a year, according to the ATA. It hit an all-time high of 136 percent in the fourth quarter of 2004.

For 2011, the turnover rate for large truckload companies was 83 percent, the highest it had been since 2007, when it was 117 percent.

People who sign up to be long-haul truck drivers for companies such as J.B. Hunt Transport Services Inc. of Lowell or USA Truck Inc. of Van Buren can earn between 35 and 45 cents a mile, which translates to about $38,000 annually for someone without experience and $50,000 to $60,000 for someone with experience, said Kidd, of the Arkansas Trucking Association.

The job pays higher than Arkansas’ per capita income of $34,000, “but it does require the driver to be away from home, four to five days at a stretch,” Kidd said. “A lot of people’s lifestyles are such that they just can’t do that, which is a challenge for the industry because it’s not like the freight can go by hovercraft.”

Costello told Arkansas Business that the turnover rate is expensive. It’s estimated to cost a company between $5,000 and $6,000 in lost revenue and expenses to replace a single driver, he said.

Costello added that some of the turnover problem could be attributed to the trucking companies, which sometimes fire a driver who has been involved in just one accident, even a minor one.

Potential Solutions

Brad Vaughn, the director of recruiting at Maverick USA Inc. of North Little Rock, said Maverick tries to have a driver dedicated to one customer and deliver shipments to the same distribution center.

“So those drivers have to be centrally located right around that facility,” Vaughn said. “But in doing so, they get much better home time. They get a routine where they see the same customers every day.”

CalArk is considering raising its pay for drivers and improving schedules. Drivers will be able to have a better personal life if they know they’ll be home on certain days, Bartholomew said.

“The way it is now, a lot of it is pretty irregular,” she said.

CalArk also is improving its terminals across the country, adding gyms and other amenities.

Costello said that one way to keep drivers with a company would be to have them stay in a region and not send them across country. But that doesn’t always work either.

Dancor is a regional carrier and has most of its drivers home every night, Kremer said. But that doesn’t stop turnover. “You still get drivers that leave for every reason that they can come up with,” he said.

 

 

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