Keller and Ozment (1999)

Problems of driver turnoverProblems of driver turnover Costs $3,000 to $12,000 per driverCosts $3,000 to $12,000 per driver Shipper effectShipper effect SCM impactSCM impact

Tested solutionsTested solutions Pay raisePay raise Regional routes (swapping)Regional routes (swapping) Newer equipmentNewer equipment Rewards for long stayRewards for long stay

Study hypothesesStudy hypotheses Voice sensitiveVoice sensitive Exit sensitiveExit sensitive ResponsivenessResponsiveness TurnoverTurnover

Voice

Exit

TurnoverResponsiveness

Data collectionData collection Large TL carrierLarge TL carrier PretestPretest Top 100 US carriersTop 100 US carriers 149 usable data149 usable data

Voice

Exit

TurnoverResponsiveness

Results

Study ImplicationsStudy Implications

Significant impact of dispatcher on Significant impact of dispatcher on turnover rateturnover rate

High sensitivity to complaints and exits, High sensitivity to complaints and exits, and responsiveness lead to low turnover and responsiveness lead to low turnover raterate

Train dispatcher for responsivenessTrain dispatcher for responsiveness Assign assistants to dispatchers (n > 50)Assign assistants to dispatchers (n > 50) Use inputs from exiting driversUse inputs from exiting drivers

QuestionsQuestions

1.1. Why drivers quit-and-hire within the industry? Why drivers quit-and-hire within the industry? 2.2. What are the costs of losing drivers for carriers?What are the costs of losing drivers for carriers? 3.3. If you are the management of a trucking If you are the management of a trucking

company, what would you do to prevent or reduce company, what would you do to prevent or reduce driver turns?driver turns?

4.4. How do you train dispatchers? What is your How do you train dispatchers? What is your strategy for hiring new dispatchers?strategy for hiring new dispatchers?

5.5. What other factors should be considered when What other factors should be considered when analyzing driver turns?analyzing driver turns?

6. How does this study change the way you play 6. How does this study change the way you play simulation game?simulation game?

Min and Lambert (2002)

Driver turnover impactsDriver turnover impacts Higher rateHigher rate Newer equipmentNewer equipment $ 446 billion industry$ 446 billion industry 3.1 million drivers3.1 million drivers

Study questionsStudy questions

DataData Randomly selected 3000 carriers – 422 responsesRandomly selected 3000 carriers – 422 responses

ResultsResults

QuestionsQuestions

1.1. What kind of drivers do you want to hire or What kind of drivers do you want to hire or not want to hire?not want to hire?

2.2. How does the driver turnover affect the How does the driver turnover affect the whole supply chain?whole supply chain?

3.3. As the management, what would you do to As the management, what would you do to prevent driver turns?prevent driver turns?

4.4. Would giving high pays to drivers solve the Would giving high pays to drivers solve the problem?problem?

5.5. What other factors would you consider?What other factors would you consider?

Predicting Truck Driver Turnover

Suzuki, Crum, and Pautsch (2009)

IntroductionIntroduction

Truck driver turnover is a key industry problem (TL).Truck driver turnover is a key industry problem (TL). Many studies have investigated driver turnover.Many studies have investigated driver turnover.

Limitations of past studies:Limitations of past studies: (1) Static analyses(1) Static analyses (2) Survey data(2) Survey data

Missing an approach that:Missing an approach that: (1) uses time-series approach(1) uses time-series approach (2) utilizes operational work variables (data)(2) utilizes operational work variables (data)

Advantages of using new approachAdvantages of using new approach

(1) Operational work data = “revealed” data.(1) Operational work data = “revealed” data. (2) Data collection advantage.(2) Data collection advantage. (3) Can assess dynamic effect of predictor variables.(3) Can assess dynamic effect of predictor variables. (4) Can be used as a practical decision tool.(4) Can be used as a practical decision tool.

For these reasons several TL carriers expressed For these reasons several TL carriers expressed interest in providing data for analysesinterest in providing data for analyses

This paper reports results of two case studies and This paper reports results of two case studies and examine the effectiveness of this new approach from examine the effectiveness of this new approach from a variety of perspectives.a variety of perspectives.

Questions to be answeredQuestions to be answered

(1) Are Operational work variables good (1) Are Operational work variables good predictors?predictors?

(2) How do they compare against (2) How do they compare against demographic variables?demographic variables?

(3) Can the model be used as a (3) Can the model be used as a practical decision tool?practical decision tool?

Background (Carrier B)Background (Carrier B) One of the largest TL carrier in the US.One of the largest TL carrier in the US. 150% driver turnover rate150% driver turnover rate Tested almost all possible solutionsTested almost all possible solutions Want to develop a method to predict driver exit for each Want to develop a method to predict driver exit for each

individual driver by timeindividual driver by time Data mining methodData mining method What else?What else? ISU approachISU approach Application of the survival analysis (duration model)Application of the survival analysis (duration model) Predicts death (e.g., life expectancy)Predicts death (e.g., life expectancy) Time-series approachTime-series approach Quit prediction based on statistical probabilityQuit prediction based on statistical probability

DataData Weekly observations of all drivers (> 5,000)Weekly observations of all drivers (> 5,000) One-year data (52 weeks)One-year data (52 weeks) Both stationary and non-stationary variables Both stationary and non-stationary variables

includedincluded Total sample = 117,874Total sample = 117,874 Computation time = approx. 60 min (1.8 Ghz Computation time = approx. 60 min (1.8 Ghz

Pentium 4 PC).Pentium 4 PC).

Background (Carrier A)Background (Carrier A) Medium TL carrier, with approx. 700 drivers.Medium TL carrier, with approx. 700 drivers. 80% driver turnover rate80% driver turnover rate Wants ISU team to analyze their data and come Wants ISU team to analyze their data and come

up with recommendations for reducing driver up with recommendations for reducing driver turns.turns.

ISU ModelISU Model Same model as that used for the large TL carrier.Same model as that used for the large TL carrier. Good opportunity for ISU team to (1) examine Good opportunity for ISU team to (1) examine

the robustness of the previous estimation the robustness of the previous estimation results, and (2) test the validity of the approach.results, and (2) test the validity of the approach.

DataData Weekly observations of all drivers (9 Weekly observations of all drivers (9

months).months). Both stationary and non-stationary included.Both stationary and non-stationary included. Slightly different set of predictor variablesSlightly different set of predictor variables Total sample size = approx. 29,000.Total sample size = approx. 29,000.

ImplicationsImplications

Pay effectPay effect Dispatcher effect.Dispatcher effect. Operational data effectOperational data effect Personal characteristic effect.Personal characteristic effect. Hire source effectHire source effect Other noticeable effects?Other noticeable effects? Demographic vs. Operational dataDemographic vs. Operational data

Model ValidationModel Validation

Face validityFace validity Estimation robustnessEstimation robustness Macro-level validityMacro-level validity Micro-level validityMicro-level validity External ValidityExternal Validity

Actions & Results (Carrier A)Actions & Results (Carrier A) The carrier has changed its practice by using study results The carrier has changed its practice by using study results Action 1: Driver referral teamAction 1: Driver referral team Action 2: Incentive program for dispatchersAction 2: Incentive program for dispatchers Action 3: Improved information to dispatchersAction 3: Improved information to dispatchers The turnover rate has improved.The turnover rate has improved.

Actions & Results (Carrier B)Actions & Results (Carrier B) Outperformed data mining methodOutperformed data mining method The carrier has implemented the ISU model.The carrier has implemented the ISU model. Seeking to combine the model with load-assignment modelSeeking to combine the model with load-assignment model

QuestionsQuestions 1.1. How would you utilize the proposed How would you utilize the proposed

driver-exit forecasting model to improve your driver-exit forecasting model to improve your turnover rate?turnover rate?

2.2. Does this type of model give benefits not Does this type of model give benefits not only to each carrier but also to the whole only to each carrier but also to the whole industry?industry?

3.3. What conclusions and implications can What conclusions and implications can you drive from the two set of studies?you drive from the two set of studies?

4.4. IS this type of model more helpful for IS this type of model more helpful for large carriers than for small carriers?large carriers than for small carriers?

5.5. What other factors would you consider in What other factors would you consider in future studies?future studies?

Suzuki (2007)

IntroductionIntroduction Driver turnover rate is still high and increasing.Driver turnover rate is still high and increasing. Many studies on this topic, but focused on how Many studies on this topic, but focused on how

to improve turnover rates.to improve turnover rates. By how much should the rates be reduced?By how much should the rates be reduced? ““What level of turnover rate should carriers What level of turnover rate should carriers

attain to generate desirable business results?”attain to generate desirable business results?” Develop a method of calculating a “desirable” or Develop a method of calculating a “desirable” or

“target” turnover rates for motor carriers.“target” turnover rates for motor carriers.

ModelModel Calculates the desirable rate for each individual Calculates the desirable rate for each individual

carrier by considering the carrier’s unique carrier by considering the carrier’s unique characteristics.characteristics.

Based on statistical confidence (95%)..Based on statistical confidence (95%)..

Suzuki (2007)

M

RCMRT (1)

M

RCDRT

RPDM

RPDMRTM

(2)

(3)

RC = driver replacement costM = net profit per day per driver = profit desired from each driver before exit = target operating profit marginRPD = revenue per driver per day

Suzuki (2007)

Excel file with VBAExcel file with VBA

Driver heterogeneityDriver heterogeneity Tested the validity of the model for carriers with Tested the validity of the model for carriers with

heterogeneous drivers.heterogeneous drivers. Results look promising (Table 3).Results look promising (Table 3).

Is your company’s turnover rate higher/lower Is your company’s turnover rate higher/lower than it should be?than it should be?