From SCDigest's On-Target E-Magazine
- Jan. 21, 2016 -
Supply Chain News: Carriers Increasingly Embracing Driver Council to Stem Turnover, but Legalities Complicate the Approach
Are Councils a Great Vehicle to Solicit Driver Feedback - or a Management Plot to Control Costs
SCDigest Editorial Staff
Even as freight volume growth slowed in the second half of 2015, bringing supply and demand in the US trucking sector more in balance, driver retention remains a key issue for the industry.
While turnover rates in 2015 moved below the 100%+ level seen for the preceding several years, the churn in the US truckload sector among large carriers ($30 million or more in revenue) was still 87% in Q2 2015, in the most recent figures available from the American Trucking Associations, up from 84% in Q1. (The Q3 turnover report from the ATA should be out almost any day.)
SCDigest Says: |
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The National Labor Relations Act, includes has a broad provision that precludes aimed the creation of "company unions," or any quasi-representative body that discusses wages and working conditions. |
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Turnover and recruitment continues to be the top concern cited by trucking industry execs in quarterly earnings calls, and a lack of drivers continues to be the largest barrier to fleet expansion at many carriers. That even as most truckload carriers offered significant increases in driver pay over the past two years.
For instance, salaries, wages and benefit expenses at Swift Transportation, the largest U.S. truckload carrier, were up 18% year-over-year in the 2015 third quarter. While some of that increase is attributable to more miles being driven, the overwhelming majority of the added stems from increases in wages.
It looks like that trend may continue in the coming year. Truckload carrier C.R. England, for example, is boosting pay for certain drivers a substantial 12.3% Jan. 4. While the rate of increases for drivers may slow this year versus 2014-15, barring a recession the upward trend will likely continue.
While the focus has naturally been on wages, rates per mile are far from the only factor in retaining drivers. The fact that turnover at smaller carriers is significantly lower at smaller carriers (76% in Q2 2015) versus larger ones is generally attributed to a more personal, community type environment at smaller truckers. It is certainly not better pay.
Last March, SCDigest reported on this issue, noting that John Elliott, CEO of expedited and regional truckload carrier Load One in Taylor, MI, found in a recent survey of its drivers that the top factor in driver retention was "Respect, hands down. It was almost two to three times higher in scoring" in the driver surveys. (See Is Higher Pay Really the Key to Solving Driver Shortage?)
Now, a new report from the Washington Post says an increasing number of trucking forms are trying to use "driver councils" of one form or another to get in front of issues of concern to drivers - and form a more collaborative environment that they hope will reduce turnover.
Carrier management usually meets with such councils several times a year, such as quarterly, to talk over issues and concerns. At some carriers, the councils serve as more than just offering a voice for truckers to management.
At carrier Central Hauling in Arkansas, for example, a council there serving primarily independent owner-operators has developed training modules to help drivers manage the business aspects of their jobs, like keeping up with truck payments and minimizing fuel costs. The carrier executive says the council has helped the drivers feel connected to the business - and thus less likely to leave.
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