Human resources

Transportation Fleets Focus on Life-Cycle Cost-Management Strategies To Recruit and Retain Drivers

For the fourth consecutive year, driver shortage remains the trucking industry’s leading concern. Oil and gas and energy industries face major challenges in the retention and recruitment of drivers for their transportation fleets, especially for petroleum and liquid tankers.

Tanker Transferring Oil into Fuel Tanks
Between 20% and 25% of all tanker trucks are not currently being utilized because of a lack of qualified drivers to fill positions.
Getty Images

Organizations within oil and gas and energy industries continue to face major challenges in the retention and recruitment of drivers of their transportation fleets at a particularly perilous time, as drivers are needed more than ever to continue transferring the shipment of materials to keep clients happy.

Petroleum and liquid tankers are seeing especially difficult employment challenges in finding drivers. According to the National Tank Truck Carriers (NTTC), companies that serve these markets are seeing an almost 42% reduction in qualified driver applicants dating back to 2019. NTTC has also estimated that between 20% and 25% of all tanker trucks are not currently being utilized because of a lack of qualified drivers filling positions.

Driver Turnover Rates Remain Inflated

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

For the fourth consecutive year, driver shortage remains the trucking industry’s leading concern on the overall list of challenges and concerns, according to the 2020 American Transportation Research Institute (ATRI) report, “Critical Issues in the Trucking Industry.”

Driver shortages are also a major concern specifically for oil and gas companies with private fleet operations. The latest benchmarking report from the National Private Truck Council (NPTC) in 2021 shows that driver turnover has averaged 14.25% over the 15-year history the group has been tracking this data, and it reached 18.5% in 2020.

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

Overall market pressures continue to place further strains on the employment picture for oil and gas firms. According to Deloitte’s 2021 industry outlook, US oil and gas companies laid off about 14% of permanent employees in 2020, and research shows that 70% of jobs lost during the pandemic may not come back by the end of 2021, placing more pressure on finding drivers.

Onboarding New Drivers Can Erode the Bottom Line

Typically, the average cost of onboarding a new driver can exceed $10,000 for many companies. Organizations with fleets 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 less maintenance and repair problems, which equates to less downtime and fewer 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.

Aside from the costs to recruit drivers, simply not having enough drivers is also eating into bottom-line profits. Companies that focus on oil and gas are losing business to owner-operators because they don’t have enough drivers to take jobs.

“We have heard that with the high spot market trucking rates, individual owner-operators are choosing to get their own authority and take loads off the load boards,” said Bob McDowell, president and owner of Houston-based W.M. Dewey & Son Inc. in a recent industry article. “They keep 100% of the load revenue rather than sharing it with a trucking company. That is a bad trend for established trucking companies, which cannot increase their driver/owner-operator count.”

Advanced Safety Features Benefit Drivers and Fleets

The advanced safety features found in today’s newer trucks are a significant motivating factor for drivers to remain with a particular organization or fleet. Today’s drivers enjoy comfort and safety items such as the following:

  • Air ride suspension
  • Power steering
  • Automated manual transmission
  • Engine HP and speed settings
  • Lane departure
  • Collision mitigation
  • Adaptive cruise control
  • Blind spot monitoring
  • Roll stability

Companies and 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 yield a return on the original safety technology investment in about 18 months (collision repairs cost avoided). These are substantial savings combined with the cost of onboarding new drivers.

Driver shortage and the retention of drivers were listed as the top two issues being faced by transportation firms according to the ATRI report. Including drivers in the conversation around safety initiatives and acknowledging their input is important for retention strategies. As more fleets and oil and gas 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 more safely, retain their drivers at a higher rate, and enjoy substantial savings in reduced accident and litigation costs and lower maintenance and repair expenditures.

Ultimately, oil and gas companies are paying closer attention to their overall life-cycle cost management strategies in alignment with the need for reduced driver turnover and better safety measures. Refocusing truck acquisition strategies based on economic obsolescence as opposed to functional attrition is now helping industry players preserve bottom-line profit potential.