Over-the-road #trucking is an infamously high-turnover industry. Often times turnover meets or exceeds 100%, meaning that trucking companies start each new year with an entirely new set of drivers. This is costly.

A colleague in industry recently advised me to calibrate our computer models to $7k as the cost to replace a truck driver who quits. Interestingly (to me!), when adjusted for inflation, that tracks with the “ugly’ case presented in this 2004 cost breakdown included in my friend and colleague Dr. Yoshi Suzuki’s 2006 paper, “Truck Driver Turnover: What Rate is Good Enough?”. Suzuki goes on to present the model equations in the second image, that formulates a carrier’s acceptable turnover rate based on these costs and a company’s goals for daily profit contribution per driver. Because of the way this is formulated (globally convex, strictly decreasing function of p), your everyday computer spreadsheet program can solve it.

To me, this kind of thinking changes the perspective on driver turnover from decades of unsuccessful efforts to reduce it; to efforts to live with, and manage it.

Reference article: “Truck driver turnover: What rate is good enough” by Yoshinori Suzuki, Int’l Journal of Physical Distribution & Logistics Management 37(8) 2007.