Editor’s note: This article contains outdated content but has been left up for anyone searching for this information. Check the EZ Invoice Factoring blog section to find our more recent content.
As a result of a stance against raising driver pay, truck driver turnover is rising. Large carrier turnover rates have hit an all-time high since last year, reaching an annualized rate of 99 percent. Additionally, given this current progression, turnover rates are expected to climb over 100 percent by the end of 2013.
Although the American Trucking Association previously projected that two thirds of this anticipated driver shortage would be a direct result of drivers’ retirement plans and industry growth, Bob Costello, chief economist for the ATA, has brought up a different concern. He links the current rise in turnover rates to a market shortage of qualified, experienced drivers.
Furthermore, according to the ATA, there are a few other influential factors that have led to the increasing turnover. Among them are the new hours-of-service regulations enacted by the U.S. Department of Transportation, the CSA (Compliance, Safety, Accountability) program imposed by the Federal Motor Carrier Safety Administration, and lastly, the general increase in freight. Nevertheless, reports reveal that turnover rates in the Less Than Truckload industry are at the lowest levels they have been in two years, coming in at an alarming 6 percent.
In the quarterly report recently published by Transport Capital Partners, research revealed that only 66 percent of surveyed carriers had plans to increase driver pay at any time within the next year. Furthermore, the majority of companies (with an emphasis on large carriers) revealed their anticipations of acquiring tremendous gains in freight volume within the coming year. As a result, these trucking companies are planning to expand carrying capacity by adding on more trucks and drivers to their fleet.
Consequently, as driver turnover rates are forecasted to reach a rate of over 100 percent, TCP and other similar consulting firms are searching for effective solutions to help boost driver retention rates for their clients. Currently, the simple solution for raising retention is to increase driver pay. Regardless, the claim that carriers can’t afford to raise driver pay still exists. However, studies have shown that smaller carriers, on average, are more likely to boost driver pay or offer their workers with better benefits, whereas larger carriers still encounter significantly larger turnover rates.
Tired of being beholden to a company and hoping to venture out on your own? Learn more about starting your own trucking business.
If your trucking company is searching for an effective solution to reduce driver turnover rates, a trucking factoring program could be the key to increasing your cash flow. Take on additional business with the help of trucking factoring programs, specially designed to help your trucking company manage its cash flow needs. Discover how trucking factoring services can help your business grow by calling 1-855-EZ-FACTOR today.