Why Freight Carriers Lose Drivers and Shippers for the Same Reason

Abstract

The trucking industry describes driver turnover as a shortage: too few licensed drivers, wages under pressure, demographics running against recruitment. The sector's own figures refuse that reading. Less-than-truckload carriers report annualised driver turnover near 10%. Truckload carriers over the same period report 66% to 106%. One industry, one labour pool, one equipment class, and broadly one wage band separate those numbers, which leaves the operating model as the variable that moves. Less-than-truckload runs a scheduled hub-and-spoke network where routes repeat and the driver sleeps at home; truckload over-the-road runs irregular routes with daily rerouting and more than 100,000 miles a year. This paper argues that the same structural property governs the commercial side of a carrier, where contract freight represents 80% to 85% of truckload procurement but contract tender rejection has been running above 20%. A carrier either holds a repeatable book of lanes and shippers or re-acquires its revenue continuously, in the way a high-turnover fleet re-acquires its drivers. Both are one failure: an operation that cannot repeat itself pays the acquisition cost again every cycle. The argument draws on the logistics literature on turnover and its transmission into freight pricing (Miller and Bolumole 2020; Miller and Muir 2020; Correll 2024), on carrier-shipper coordination under a spot market (Wang and Wen 2021), and on digital intermediation in freight (Herold and Fahimnia 2023; Orji and Kusi-Sarpong 2020). It closes with the constraint that governs any remedy: 91% of carriers operate ten trucks or fewer, which places the enterprise answer out of reach by arithmetic rather than by preference.

The shortage account and what contradicts it

The standard account of driver turnover is a supply account. It holds that the pool of qualified drivers is too small, that the work is unattractive relative to alternatives, and that carriers compete for a scarce resource by raising pay until equilibrium arrives. Every element of that account is partly true, and taken together they predict that turnover should be broadly similar across carriers facing the same labour market.

That prediction fails against the sector's own reporting (American Trucking Associations 2021). Less-than-truckload carriers report annualised driver turnover at approximately 10%. Truckload carriers report 66% at small fleets and 74% at large fleets, with the large-fleet series having peaked at 106% in the second quarter of 2012 and the small-fleet series at 86% in the same period. A rate above 100% means a carrier replaced more drivers than it employed across the year.

The two segments recruit from the same licensed population, operate the same class of equipment, and are subject to the same hours-of-service regime. A supply explanation cannot account for a ten-fold difference between them, because supply is common to both.

What differs is structural. Less-than-truckload consolidates shipments at terminals and moves them through a hub-and-spoke network, which produces repeating routes and a pickup-and-delivery driver who returns home at the end of a shift. Truckload over-the-road assigns a full trailer to a destination, which produces irregular routing, frequent and sometimes daily schedule changes, annual mileage above 100,000, and rest taken in the cab.

Miller and Bolumole (2020) examine industry-level truckload turnover longitudinally and find it responsive to operating conditions rather than to a static labour supply. Correll (2024) reaches the same conclusion from the opposite direction, predicting turnover from driver-level operational data: the variables that carry predictive weight are features of how the work is scheduled and executed.

The conclusion is unwelcome but plain. Turnover in trucking behaves as a property of network design. A carrier that cannot make the work repeat will pay to replace the people doing it, whatever it pays them.

The cost of a non-repeating operation

Replacing one driver costs between $8,234 and $20,729 (Federal Motor Carrier Safety Administration 2021). The range reflects differences in recruitment channel, training obligation and carrier size.

Applied against an annualised turnover rate of 74%, a fleet of one hundred drivers absorbs roughly seventy-four replacement events in a year, at a cost between approximately $609,000 and $1.53 million, to end the year with the headcount it began with. The expenditure buys no additional capacity. It purchases the restoration of capacity already held.

Miller and Muir (2020) take the step the operational discussion usually omits and trace turnover through into truckload freight pricing. That finding relocates the problem. Turnover stops being a human-resources cost absorbed inside the business and becomes an input to the rate a carrier must charge, which is a commercial variable visible to every shipper evaluating that carrier against another.

The same structure on the revenue side

Freight procurement divides along a line with the same shape as the operational one. Contract freight accounts for 80% to 85% of truckload procurement. The spot market accounts for the remaining 15% to 20%.

Contract freight is the repeatable form: agreed lanes, agreed rates, known volumes, a shipper relationship with a history. Spot freight is the irregular form: a load appears, a rate is quoted against current conditions, and the transaction concludes without establishing anything that persists.

The boundary is not holding. Contract tender rejection has been running above 20%, which means better than one contracted load in five is refused and pushed into the spot market. Spot linehaul rates have crossed above contract rates for the first time since 2022, and shippers have responded by shortening contract terms: annual agreements with monthly price adjustment, single-quarter agreements, and agreements covering specific lanes rather than a whole freight mix.

Wang and Wen (2021) model carrier-shipper coordination in the presence of a spot market and show that the availability of spot capacity changes the risk each side is willing to carry within a contract. The contract is not insulated from the spot market; it is priced against it.

For a carrier, the consequence mirrors the driver problem exactly. A carrier holding contract freight has revenue that repeats and a relationship that survives the individual load. A carrier living on the spot market re-acquires its revenue with every load, from a shipper it may not transact with again, at a rate set by conditions it does not control. The acquisition cost is paid continuously, in the same way the high-turnover fleet pays its replacement cost continuously.

Herold and Fahimnia (2023) examine digital freight forwarders against incumbents and identify where the relationship with the shipper is captured. The intermediary that holds the record of which shipper moved what, on which lane, at what rate, occupies the position from which the relationship can be made to repeat. A carrier without that record has surrendered the position, whatever share of the physical work it performs.

What a small carrier can actually build

Any remedy has to survive a structural fact about the industry. More than 55% of carriers operate a single truck. 91% operate ten trucks or fewer.

That distribution disqualifies most of the standard technology answer. A full transportation management system installation runs at approximately $40,000, and heavy customisation only repays itself in fleets above roughly five hundred trucks. Industry guidance places the threshold at which a transportation management system begins to make financial sense at five or more trucks with two or more operations staff. Below it, carriers work from spreadsheets and free cloud tools. Web-based systems have brought the entry price for a ten-truck fleet to approximately $1,000 a year, but lower-cost options are frequently described as carrying dated interfaces and performance problems.

Orji and Kusi-Sarpong (2020) study adoption factors in freight logistics and find that perceived complexity and the availability of technical capability weigh heavily against adoption, independently of cost. For an owner who is simultaneously the dispatcher, the salesperson and frequently a driver, implementation effort is not a secondary consideration. It is the binding one.

The conclusion is not that small carriers should buy enterprise software. It is that the commercial layer is the part worth building first, because it is the part that converts spot exposure into contract freight (Wang and Wen 2021).

That layer is narrow. It requires a record of every shipper the carrier has moved freight for, the lanes moved, the rate accepted, and the date. It requires a record of every shipper quoted and not won, with the reason. It requires the renewal or review date of any contracted lane to exist somewhere other than in the owner's memory. None of that requires a transportation management system, and none of it is served by a spreadsheet that one person maintains and no one else can read.

The test is a question the owner should be able to answer in a minute: which shippers moved freight on this lane in the last year, what was quoted, and which quotes were refused. A carrier that can answer it can pursue contract freight deliberately. A carrier that cannot is dependent on the load board, and on rates set by a market that prices its capacity as interchangeable.

What this argument does not establish

The turnover comparison is between segments, not a controlled experiment. Less-than-truckload and truckload differ in more than route regularity: terminal networks require capital that favours larger and older firms, union density differs, and freight characteristics differ. The claim defended here is that operating structure carries substantial explanatory weight, not that route regularity is the sole cause of the difference.

The turnover figures cited are from the periods stated and are annualised rates published by a trade association rather than a statistical agency. Rates move with the freight cycle, and the 2012 peaks reflect conditions specific to that recovery.

No causal claim is made that a commercial record produces contract freight. The relationship argued is weaker and more defensible: a carrier that cannot identify its own shipper history is unable to pursue contract freight systematically, which is a claim about capability rather than outcome. Carriers win contract freight through service quality, equipment availability and price. A record is a precondition for pursuing it deliberately, not a substitute for the rest.

The cost-per-replacement range is wide enough that the fleet arithmetic above should be read as an order of magnitude rather than a forecast. A carrier with low training obligations and a strong referral pipeline will sit at the bottom of that range.

Finally, this paper argues from published industry data and peer-reviewed mechanism rather than from measured results at a named carrier. That is a deliberate limit. The figures are checkable by the reader, and no outcome has been attributed to work that cannot be verified.

Conclusion

The freight industry's two retention problems are usually assigned to different departments. Driver turnover belongs to human resources; shipper retention belongs to sales. The structural evidence suggests they are the same problem observed from two positions.

A less-than-truckload carrier retains drivers because the work repeats (Miller and Bolumole 2020). A carrier holding contract freight retains shippers for the same reason. In both cases the alternative is not cheaper: it is the continuous payment of an acquisition cost, in recruitment on one side and in rate exposure on the other.

For the 91% of carriers operating ten trucks or fewer, the enterprise systems that promise to address this are priced for fleets fifty times their size. What is available is narrower and considerably cheaper: a commercial record with enough structure that the carrier can see which relationships repeat, which do not, and which were never asked to.

References

Correll, D. (2024). Predicting and understanding long-haul truck driver turnover using driver-level operational data. Expert Systems with Applications, 238, 122782. https://doi.org/10.1016/j.eswa.2023.122782

Herold, D. M., & Fahimnia, B. (2023). The digital freight forwarder and the incumbent: A framework to examine disruptive potentials of digital platforms. Transportation Research Part E: Logistics and Transportation Review, 176, 103214. https://doi.org/10.1016/j.tre.2023.103214

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Miller, J. W., & Muir, W. A. (2020). The effect of truckload driver turnover on truckload freight pricing. Journal of Business Logistics, 41(4), 316–336. https://doi.org/10.1111/jbl.12252

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Transport Topics. Small but growing carriers make the leap from spreadsheets to TMS software. https://www.ttnews.com/articles/small-growing-carriers-make-leap-spreadsheets-tms-software

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Conflict of Interest Statement

RevOps HQ is a HubSpot Solutions Partner and derives revenue from revenue operations and CRM implementation work, including for carriers. The argument in this paper concerns the structure of a commercial record rather than any particular platform, and the case made for building one is a case the firm is paid to act on. Readers should weigh it accordingly. No carrier named or unnamed supplied data for this paper, and no client outcome is claimed anywhere in it.

Acknowledgments

Turnover and structure figures are published by the American Trucking Associations and the Federal Motor Carrier Safety Administration. Freight activity and industry structure data are published by the Bureau of Transportation Statistics. Procurement and technology adoption reporting is from Transport Topics.