Balancing profit and people in trucking

In an industry where carriers battle for each point on their operating ratio, driver turnover rates – 72.3% for 1000+ truck fleets and 71.4% for 251-1000 truck fleets – serve as a critical indicator of friction and opportunity for better driver management. Year after year, driver shortage and driver retention have topped the ATRI top industry challenges. Despite these warning signs, fleets continue to lay out their loads, build routes, then assign these routes to their drivers. But something's missing.

Drivers receive “optimized” routes with little to no personalization or consideration for their preferences. Wasted time, lost productivity, and turnover quickly follow, burning out employees and dragging down operating ratios. Despite their challenges of retaining drivers, fleets follow this process and even amplify it with freight-centric systems and processes. 

The root of turnover 

Of drivers looking for a new job, Conversion Interactive Agency found that 81.7% pointed to predictable pay as a reason for looking. Home time ranked as the second most common answer at 61% with more consistent miles coming in third at 38%.  

And these drivers' problems are their fleets' problem. With the popularity of the pay-per-mile structure, if drivers aren’t making money, neither are fleets. As drivers continue to face high dwell times, deadhead, and lack of available parking they look toward fleets to provide better planning and dispatching. Yet, fleets often fall short of driver expectations and the promises of their recruiters.

Drivers may voice these frustrations to their dispatchers or driver managers. But dispatchers are stuck working with the freight available to them. It leaves drivers and dispatchers in a state where they must choose between loyalty, voice, or exit. And this prolonged high turnover points to employees feeling that there is no other option but to exit.

While these narratives have historically focused on the driver, we can't forget that they aren’t alone in their frustration. 60% of truck dispatchers and 50% of load planners leave within two years, half the median U.S. employee tenure.  

"As hard as the driver job is, the driver manager job is pretty thankless too," Harmen Cheema of Cheema Freight Lines told Bloomberg.

By looking further into data of drivers who leave their fleet and what traits make a successful dispatcher, we can find a better solution. We’ll go beyond the overstated amount of turnover to when and why it happens and how we can fix it.

When turnover takes place

In 2017, now acquired StayMetrics reviewed data from over 62,000 drivers and found that 70% of driver turnover happens in the first year and 35% left within the first three months. DriveriQ reached a similar conclusion, finding that 71% of drivers were with the company for less than one year. 90% of new hires decide whether to quit or stay within the first six months.

“If trucking companies can keep an employee past one year, they stand a pretty good chance of developing a long-term employee,” the DriveriQ report added.  

Simply put – as drivers stick with a fleet, turnover rates decrease, and retention rates rise before plateauing around year 3 or 4. But fleets still must earn the right to keep their drivers, whether that’s through recruiting, onboarding, operational processes, or a combination of all three. 

And just a small change in this high turnover of early employees can mean a big difference for companies. 

The cost of turnover

We won't go deep into the cost of turnover. We'll leave that to the experts at PDA, who recently shared that "losing a single driver can cost between $10,000 and $20,000. For example, a fleet of 400 trucks with 100% turnover could face annual costs of $4 million."

According to the StayMetrics survey, high recruiter satisfaction lowers driver turnover by 21.57% in the first three months. At the same time, high dispatcher satisfaction can reduce turnover by 15.81% over the same period. But these gains diminish over time.

By improving your recruitment and dispatching processes you can make significant changes to driver turnovers costs while retaining top dispatcher talent. Now, let's uncover where to begin making this a reality.

It starts with the right freight 

At the end of the day, you can only pay your drivers and get them home within the constraints of the freight available to your planners and dispatchers. 

As Harman continued on Bloomberg, "you're at the mercy of the customer, traffic, production, all of those things. It's playing chess with marbles."

The right freight meets fleet profitability metrics, but also fits a fleet’s network, specifically driver availability and preferences to make the "chess game" a little easier. In chess, sometimes you need to sacrifice a pawn for the long game. You may need to “lose” on the short term with one load to get to a “win” in the long term. And it will require improved driver communication to explain why they’re making a short haul, moving in the “wrong direction”, or won’t be home.

The current approach to sourcing freight and planning trips often revolves solely around freight, disregarding significant factors that affect these drivers’ productivity and long-term profitability. Carriers focus on sourcing freight, creating routes, and allocating loads based on factors like rates, volume, and distance. This strategy fails to consider or misjudges the importance of the preferences and needs of individual drivers, customers, and their existing network. A “perfect route” with an incomplete picture may run a driver out of hours, strand them without another load, or throw off your network balance.  

“We have all these puzzle pieces on a table, and we've got to put all those puzzle pieces together into a route,” Former Gulf Relay CEO Scott Auslund described in an Optym webinar. “Then what we'll do is we'll take that route and give it to a driver, and they don't have any say in it. That's not how the world works.” 

While that may work for small fleets, those drivers also could come to their office for feedback and reassurance. As you scale, those drivers become more detached from the company and quickly feel abandoned leading to turnover, lost productivity, and less capacity. When dispatch sends a driver a bad trip or ignore preferences, they may brush off the first or second time but eventually it will catch up with them. Sending a driver to an unknown area or creating a feeling of pressure leads to elevated safety risks for drivers as well.

When creating sporadic and irregular routes for drivers week after week, carriers are bound to defy driver preferences, milage or pay targets, and personal needs, creating frustration. It’s become common for drivers to spend hours waiting, occasionally on the side of the road, for their next load. 

These waiting sessions quickly lead to drivers considering other companies, as Conversion Interactive Agency found that 52% of drivers are recruited at least once a week. It's vital to pre-plan drivers and develop a consistent and equitable distribution of loads across green and experienced drivers to continue delivering for customers and growing their business.

In an industry with such tight margins and a soft market, carriers can’t afford to bleed cash for additional recruitment and safety costs that come with high turnover of quality drivers, dispatchers, or planners.

So, if they're bringing freight that doesn't fit their capacity or competency into their business, they're doing everyone a disservice. Freight won’t meet driver expectations. Mileage and pay targets will fall short. Home time will be thrown out the window. Driver and manager relations will become less friendly. Drivers look elsewhere, joining another carrier or going independent. Customers will move to the next carrier. That's a tricky business to run.  

But what if we shifted the focus to capacity, drivers and assets, and network competencies? What if we leveraged technology to effectively store and use driver availability, preferences, feedback, and goals to tailor load selection and assignments for a better driver and customer experience? Carriers would build a solid, reliable, and more profitable and efficient business. 

The right freight can be a moving target depending on each scenario. Some loads may not meet rate goals but rather minimize deadhead and costs to get them to the next profitable load. Or they may need to prioritize a contractual obligation to a preferred customer to secure the next contract.  

To find the right freight requires an overarching understanding of business needs. This requires instant access to pertinent information, and a clear system to manage shipments, either accepting, rejecting, or brokering a load based on a holistic look at the business impact.  

Scaling personalized driver-load matching 

Now, you’re giving your dispatchers the right freight to match your capacity. Executing on this optimized freight requires finding the right driver at the right time for the right job.

When manually managing driver preferences, mileage targets, hours of service, home time, and more it becomes challenging to balance these with deadhead, detention time, and overall carrier profitability. This leads to friction between drivers and their managers, leading to the high driver and dispatcher turnover we see plaguing the industry.

Manually sorting through drivers and digging through pages of notes on their preferences doesn’t lead to an efficient process. By centralizing this data in an organized manner, dispatchers can more quickly search, sort, and find a match. Pairing this with an organized database of available freight, or trips, can further improve the process. 

But you’ll reach another level of efficiency and scale when you’re able to automate and optimize these decisions. By pairing advancements in optimization research with a solid database, dispatchers can assign individual drivers, regions, or the entire fleet with a click. And depending on your available freight, you’ll be able to pre-plan your drivers, giving them piece of mind that they have additional loads already waiting for them. This will minimize downtime, enable better route planning for parking, hours of services resets, and fueling.

These personalized assignments increase profitability, as you’ve selected better freight for your network, enable dispatchers to focus on bigger picture or more human-centric tasks, and can help you improve your overall utilization. 

The last piece of the puzzle here requires looking toward an even further event horizon, as you look to maintain network balance.  

Finding your balance 

Economies of scale lead us to believe that as a business grows, it should see improved productivity. But with scale can come additional management headaches that can taper growth and lead fleets to plateau.

While individual teams may be given targets, it can be difficult to connect them to the bigger picture. Working within integrated systems can break that ceiling and connect each movement to the larger goals of the company. 

For trucking, these means weighing your network’s balance of trips and drivers across a broader time horizon. This can enable you to make smarter freight selections, and ensure you keep your drivers moving for the long term.

With LoadAi, you can do just that. By connecting to your TMS, you can synchronize your freight selection, driver management, and monitor your network's balance – all in one place.

If you're ready to bring your fleet into a new era that balances your people and company goals, contact Optym today.