It’s industry gospel that Texas has one of the highest turnover rates in the trucking industry. We decided to do a little research and test the theory’s mettle.
What we found was surprising, to say the least.
Is It Texas?
The U.S. trucking industry employs over 3.4 million drivers. Using the United States' second largest state as a sample size, the Texas Trucking Alliance found a 90% state driver turnover rate this year, while smaller fleets saw turnover increase to 71%.
Because of this number, the Texas Trucking Alliance study recommended the following actions in order to reduce driver turnover:
- Hire drivers as employees rather than as contract workers, who are responsible for most of their vehicle’s expenses
- Provide drivers guaranteed time-off and paid sick and vacation days
- Offer drivers health care and retirement plans
- Provide drivers bonuses for longevity, productivity and safety records
- Provide electronic onboard recorders that eliminate the need for drivers to manage messy, manual paper logs
- Provide expansive driver safety training to the entire fleet
- Provide referral bonuses, which incentivize drivers
“The Texas trucking industry is faced with an ever increasing driver shortage challenge,” noted John D. Esparza, president and CEO of the Texas Motor Transportation Association (TMTA). TMTA is one of the largest state trade associations in the country representing the trucking industry.
“Through this intuitive study we are equipping our members with pertinent information to prepare for these situations and giving them tools to make educated decisions about their businesses reflective of the current economy,” Esparza added.
What Does That Mean For The Rest of Nation?
Texas actually had a smaller turnover rate than the rest of the nation. The annual large truckload carrier turnover rate rose higher than 100% for the first time in four years, according to the American Trucking Association (ATA).
That big round number means that fleet managers and owners need to replace their entire fleet in order to retain their yearly operational costs.
According to the ATA, “if recruiting one driver costs $5,000, on average, a company with 500 drivers would pay $2.5 million a year.”
Driver turnover hit a whopping 106% in the second quarter, which was the highest industry turnover level since 2007. “We continue to see steady, albeit sluggish, growth in freight volumes, which increases demand for drivers,” noted ATA economist Bob Costello.
The high turnover rate is especially concerning for the pre-holiday peak shipping season, as companies focus on pricing, workload and capacity for their businesses. In comparison, the turnover rate for large trucks was 83% last year, according to the ATA.
About the Study
The 2012 Texas Trucking Industry Study is the second annual research study commissioned by the Texas Trucking Alliance (TTA). The randomized telephone survey was conducted by San Antonio-based Galloway Research Service in June 2012. It includes responses from 266 trucking company owners, CEOs and senior executives at Texas-based trucking companies in the NAICS 484 category, which includes more than 15,000 companies according to Dun & Bradstreet’s database. The research results were weighted to match the proportions of large and small companies and their geographic distributions across the state, and have a +/- 5 percent margin of error at the 90 percent confidence level.
The study can be found here.