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In my last article, I talked about Driver Turnover and gave some reasons as to why it is so high. In today’s article, I want to talk about what — and who — driver turnover costs.

Effects on Drivers

The trucking industry is notorious for having a high turnover rate.  This means that a lot companies find themselves having to replace positions that leaving drivers left open.  The problem is that driver turnover hurts drivers more than anyone else.  In addition to making the individual driver look bad, it causes a divide between the companies that need to hire drivers and the drivers themselves.

The breakdown between drivers and companies creates a race to the top.  Companies begin to outbid each other for the top drivers.  Which in turn creates more driver turnover as drivers jump from one job to the next to take advantage of a better financial opportunity.

Effects on Companies

In my next article, I’ll talk about where the money goes, but different places have estimated that replacing a driver can cost anywhere from $5,000 to $20,000.  If a fully endorsed driver can makes an average of $70-80,000, then replacing a driver can cost as much as a quarter of the driver’s salary.

Businesses is about making money.  If an investment isn’t making money, then the company will cease to invest in it.  In a future article, I’ll talk about how companies are trending towards third-party logistics companies. But for now, companies have trouble finding value in their trucking when the turnover rate raises.  This is one reason for the trend towards third-party trucking and logistics.

Effect on Consumers

Simply put, cost drives up price. The economy is like a giant machine, and companies are the engines.  If a company is not hitting the right margins, they will either stop investing or raise the price of their product.  And ultimately, that puts the burden on the ones buying the product.  Sometimes, that’s other companies.  But whether it’s chemicals, fuel, or oil, the raise in price will always hit the consumer in the wallets.

Conclusion

Consider this more of an analysis than anything else.  I’m not presenting a solution to the problem, but in order to find the solution, we have to understand what the problem is.  I’ll dig in a little deeper with my next article on what costs companies so much money when a driver leaves.

For now, happy driving!

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