Viewpoint: Newer trucks help companies lower cost of onboarding drivers

The tight market for drivers has made retention even more important in the current economy. ACT Research recently said its latest For-Hire Trucking Index showed a Driver Availability Index that dropped to a new low of 16.7 in March, down from its previous low of 23.6 in February.

The recent data showed that the annualized turnover rate at truckload carriers with more than $30 million in annual revenue increased to 92% during the third quarter. For smaller carriers, the turnover rate increased to 74%.

ATA Chief Economist Bob Costello said: “After a calamitous second quarter, trucking – along with the rest of the economy – began recovering in the third quarter, leading to a tightening of the driver market. With a more robust freight market, we saw an increase in carriers seeking drivers, which led to increased turnover. 

“Additionally, the driver pool has decreased this year for a host of reasons, including fewer new drivers coming into the industry as truck driver training schools train less drivers due to social distancing requirements.” 

While it would be easy to point toward COVID-19 as the culprit, the fact remains that driver recruitment and retention has been a growing issue for several years now. 

For the fourth consecutive year, the driver shortage remains the trucking industry’s leading concern, according to the 2020 American Transportation Research Institute report, “Critical Issues in the Trucking Industry.”

Driver shortages are also a major concern specifically for private fleet organizations, even though the numbers are not as dire as for-hire carriers. The latest benchmarking report from the National Private Truck Council in 2020 shows that driver turnover has continued to increase, reaching close to an all-time high of 18.5% in 2020. For comparison purposes, in the previous year private fleets reported turnover of 16.9%, up a point and a half over the previous year’s 15.4% average turnover.

Compensation programs are regularly discussed to attract new drivers and retain existing ones. However, fleets are beginning to utilize other strategies for driver recruitment and retention. 

The average cost of onboarding a new driver can exceed $10,000 for many companies. Organizations with private fleets and for-hire carriers therefore have a continuous motivation for retaining their existing drivers to avoid paying this hefty onboarding expense. What they’re now coming to realize is that having drivers operate newer trucks can improve their chances of retention.  

Newer trucks come with newer technology, advanced safety features and fewer maintenance and repair problems, which equates to less downtime and breakdowns on the side of the road. This means drivers can more frequently return home to their families at the end of the day and operate trucks on their routes with more confidence they will avoid breakdowns on the side of the road.  

The advanced safety features found in today’s newer trucks are a significant motivating factor for drivers to remain with a particular fleet. Fleets themselves are realizing a greater return on their investment into newer trucks when more of these trucks are placed into service. 

In fact, the cost for all safety equipment (including collision avoidance, disc brakes, lane change and electronic stability control) reduces overall collision repairs and yields a return on the original safety technology investment in about 18 months (collision repairs cost avoided). These are substantial savings to offset the cost of onboarding new drivers. 

As more fleets and transportation organizations replace aging trucks with newer, safer equipment on the roads, these companies will quickly realize they will keep their drivers and others on the road safer, retain their drivers at a higher rate and also enjoy substantial savings in reduced accident and litigation costs as well as lower maintenance and repair expenditures. 

About the author

Katerina Jones is the vice president of marketing and business development at Fleet Advantage, an innovator in truck fleet business analytics, equipment financing and life-cycle cost management. For more information visit www.FleetAdvantage.com.