Driver retention and fuel prices continue to be two of the most critical concerns for the trucking industry. Driver shortages have worsened in a tight, pandemic-era labor market, and fuel costs have increased significantly over the last couple of years.
There’s no easy answer to tackle both challenges at once. At first glance, driver retention and fuel savings appear to be unrelated. When examining these challenges in more detail, it becomes clear that companies can use technology to address both issues at the same time.
Fleet management, truck telematics, and coaching solutions provide a way to connect driver engagement with more efficient fuel consumption. Driver incentive programs that include fuel economy bonuses can help increase engagement while saving fuel.
Business pressures linked with driver retention and fuel costs
The last two years have been unusually stressful for most businesses and the global labor force. Pressures include an ongoing pandemic, supply chain challenges, a shift to remote work, skyrocketing inflation, and major geopolitical events.
The American Trucking Association projects that the estimated driver shortfall of about 80,000 could grow to more than 160,000 by 2028. Perhaps more concerning, the U.S. Department of Transportation revealed that turnover rates in 2021 were “over 90 percent for large, long-haul carriers and over 72 percent for small carriers.”
In June 2022, a continuous rise in fuel prices drove the U.S. average cost of a gallon above five dollars before the average price fell quickly in the later half of the summer. Unstable energy prices erode profits and create cost uncertainty for fleets.
Individual organizations can’t control volatility in labor markets and gas costs. Still, trucking companies can act to mitigate turnover and fuel prices. Real-time coaching solutions are an example of technology that fleets can deploy to save fuel and engage drivers.
Fuel economy programs can improve driver retention
Increased costs force trucking companies to re-evaluate technology and core business processes deployed across their fleet. Investing in fuel savings technology, such as the ISAAC Coach, can support cost reductions and driver retention. The business case for investing in technology revolves around skyrocketing costs related to turnover and fuel.
Turnover costs change from one fleet to the next. The average cost of turnover per driver was $11,500, according to Driver IQ. At the same time, estimates from the U.S. Bureau of Labor Statistics showed the potential cost above $20,000 per driver for some fleets. Depending on the trucking vertical, recruiting and onboarding new drivers costs between $6,000 and $20,000. These numbers show that driver engagement and retention investments can pay off with reduced labor costs.
For fuel economy, an improvement of a half-mile per gallon for vehicles traveling 100,000 miles per year can result in annual savings between $4,000 and $5,000 on a single truck. The most efficient drivers can achieve up to 30% better fuel economy compared to the least efficient drivers, according to Cummins Fuel Economy Guide. This shows the value of investing in fuel efficiency programs. In fact, the larger the fleet, the greater the potential savings.
Gallup Workplace studies show that high-turnover organizations—those with greater than 40% turnover—benefit significantly from improved worker engagement. Their research shows that:
- Highly engaged business units experience 24% less turnover
- Highly engaged groups show a 10% increase in customer ratings
- Highly engaged business units result in 21% greater profitability
- Engaged workers have a greater commitment to quality and safety
Drivers who experience higher levels of engagement are less likely to jump to competing carriers or decide to switch careers. Fuel economy initiatives can help to increase driver engagement. At the same time, fleets will benefit from more fuel-efficient driving behavior, improved safety, and better overall driver performance.
Tackling turnover and fuel costs will require more than technology. Fleets must place drivers at the center of fuel efficiency programs to succeed.
Give drivers clear goals and the support to achieve them
Many fleets have experienced success implementing fuel economy programs as part of a larger driver retention initiative. So how do you develop a fair and balanced driver recognition and rewards program based on fuel economy?
Fleets already know their objectives: reduce costs and keep drivers happy—but what’s in it for drivers? How will the fuel efficiency program connect to drivers to benefit them? Perhaps more important, what aspects of the program will be under driver control?
Fuel efficiency programs must provide clear, realistic, and achievable objectives. New and experienced drivers should understand what’s expected. Fleets must show how fuel efficiency initiatives impact driver performance assessments, benefits, compensation, and even career development.
New or updated programs must be incorporated into the organization’s shared vision and overall culture. Buy-in across the entire fleet begins with leadership. A commitment to continuous improvement must be seen and felt across each level and department of the organization.
Before implementing the program, take the time to map out messaging, communication, change management, and driver onboarding plans. Work backward from the go-live date on a week-by-week basis. Include drivers during initial and ongoing planning efforts to ensure the buy-in and engagement needed to ensure success.
Drivers must understand how the program will impact them and the fleet. Rolling out the deployment in incremental, bite-size parts lets everyone adapt to changes better than a larger deployment. Give drivers a baseline period to learn the new technology and discover how to achieve their goals.
Changing driver behavior takes time—some operators will adapt quickly, while others may require a longer adjustment period. Don’t forget to incorporate feedback loops during the program’s development and deployment, including driver surveys, large group meetings, and smaller focused groups.
Certainly, drivers want to know how they will be compensated for fuel efficiency performance. Still, the program must go beyond compensation to develop the engagement needed to diminish turnover.
Fuel efficiency technology helps to connect and engage drivers
Trucking technology, like the ISAAC Coach, supports fleetwide initiatives to save fuel while engaging drivers. The technology helps to provide real-time coaching for aspects that the driver can control, such as the accelerator pedal, cruise control, and coasting. Things beyond driver control, such as headwinds, slope, and load, are all considered to ensure a fair driver performance scoring.
Gallup’s State of the Global Workplace: 2022 Report showed “only 21% of employees engaged at work.” At the same time, 71% of workers in the United States and Canada “said now is a good time to find a job.”
Companies don’t control labor and energy price trends impacted by global events. Fleets can mitigate tight labor markets and reduce costs with fuel efficiency programs deployed as part of larger driver retention initiatives.
About the author
Trent Gilles, Technical Solution Specialist
Trent Gilles helps lead the Solutions Engineering efforts for ISAAC prospects and clients in North America. An education graduate of the University of Wisconsin – River Falls, he has led the design, development, and implementation of telematics, video safety, lone worker health, mobile workforce, and data science solutions for the largest transportation technology companies in North America over the past 17 years. Before joining ISAAC, Trent was responsible for managing the Solutions Engineering and Customer Success Teams for SmartDrive Systems, Inc.