The following metrics are sourced from truck driver recruiting campaigns managed by Randall-Reilly. Recent trends are detailed below in an effort to review driver employment activity.
In the past 12 months, the network of unique Driver Recruiting Landing Pages maintained by Randall-Reilly were visited by over 3.6 million users. Over 2.85 million unique users visited using a mobile device, over 650k visited using a computer, and over 95k visited using a tablet.
For Driver Recruiting campaigns managed by Randall-Reilly:
- Drivers submitted 879k unique leads to 991 different clients through Randall-Reilly advertising campaigns.
- 244k unique driver contacts submitted 447k unique forms to various fleets.
- 313k unique driver callers made 432k unique call leads to fleets.
Summary
The freight market for trucking companies remains very strong, and indicators suggest the market will remain very strong through Q3 and be beneficial to carriers through at least Q1 of 2022. However, hiring drivers to take advantage of these tailwinds is more difficult than ever.
As noted in April’s trend newsletter, lead costs (CPL) spiked in the back half of March, and that continued through April, leading to all-time highs for average CPL for all major driver types.
The high CPLs were primarily caused by a sharp decline in drivers searching for jobs:
- Nearly 180,000 fewer drivers searched for a driving job in April than March.
- When compared to April 2019, there were ~330,000 fewer job seekers for driving jobs.
Average overall CPL in May[1] is on pace to decline by 7% month-over month (MoM).
- All major driver types except for owner-operator are on pace to decline.
- Student campaigns are seeing the largest MoM percentage decrease in May, indicating that potential drivers are interested in beginning driving as driving schools increase capacity.
As predicted last month, high lead costs from the second half of March and April are causing hire costs (CPH) to increase significantly.
- Average company driver CPH increased nearly 41% MoM.
- Too little of April’s owner-operator hire data has come in to be certain of how much CPH increased, but early indications suggest hire costs increased substantially.
Keep in mind that most carriers’ orientations occur on Mondays, and the number of Mondays in a month can influence CPH:
- March had five Mondays, whereas April only had four.
- One of April’s Mondays was after a holiday (Easter), potentially suppressing hire counts.
- Looking forward, May technically has five Mondays, but the 31st is Memorial Day, likely pushing some hires into June.
One further note: since year-over-year (YoY) comparisons are less helpful since last April and May were deeply affected by the early stages of the pandemic, the charts and tables now include 2019 stats, where available.
[1] May stats are taken from campaign performance between May 1 and 15.
Click Cost Averages
Click costs (CPC) trended upwards in April, but through the first half of May, Search and Display CPC is on pace to decrease MoM but remain well above 2019 and 2020 costs.
Facebook’s CPC continues to increase; in fact, CPC has increased MoM in 12 of the past 13 months since it hit its low last April. The click-through rate hasn’t changed nearly as much as CPC has, indicating that competition remains elevated.
The Digital Marketing team is monitoring the iOS privacy changes and seeing how much this is affecting campaigns, especially on Facebook.[2]
[2] Currently, 43% of users who visit Randall-Reilly built landing pages do so on an iOS device.
Cost-Per-Lead Averages
As first reported last month, lead costs (CPL) spiked in the second half of March. Costs remained very elevated through April, leading to double-digit MoM increases for all major driver types except for Student campaigns, which saw an 8% increase. While multiple factors may have affected the CPL increase, the sharp decline in job seekers on job boards [see ‘External Market Trends’ below] after the extension of unemployment benefits and distribution of stimulus payments likely played the largest role in the increase.
Through the first half of May, average CPL is on pace to decline for all major driver types except for campaigns targeting owner-operators, but all driver types remain elevated compared to historical trends.
Student campaigns are seeing the largest MoM percentage decrease in May (-22%), indicating that potential drivers are interested in beginning driving as driving schools increase capacity.
CPL stats by driver type are only available from March 2019 and onwards.
Hire Costs & Rates
The high lead costs of the past few months have begun to really affect hire costs (CPH). For company drivers, hire ratios (LTH) dropped by 14%, but CPH increased by 41%. This indicates that the majority of the CPH increase was driven by higher lead costs. %. (Note: a drop in LTH would lead to an increase in CPH.)
The majority of April’s owner-operator hire data is not yet available. That data should be considered incomplete/preliminary (denoted by the light green color in the line charts) and will likely change significantly as more hire data is added. The early data suggests that CPH in April increased significantly.
Be aware that March had five Mondays, whereas April only had four, and one of those was the Monday after a holiday (Easter). Most carriers’ orientations occur on Mondays, so the monthly hire counts tend to be affected by this. Carriers hired on average 7% fewer drivers overall[3] in April than they did in March. Looking forward, May technically has five Mondays, but the 31st is Memorial Day, likely pushing some hires into June.
Hire data by driver type is only available from March 2019 and onwards.
[3] Overall hires are any hires made by a carrier that provides hire data.
Other Digital Trends
The count of users on Randall-Reilly-built recruiting pages is on pace to increase for the second consecutive month. When accounting for this month’s increase in client budget, users are on pace to increase from last month. This suggests that more drivers are looking for jobs than in April.
While landing pages are getting more users, drivers remain selective of who they apply to. Conversion rate on landing pages is on pace to decrease slightly. Users are spending the same amount of time on client landing pages, while multi-carrier application volume remains low compared to historical values.
External Market Trends
Truck driving jobs posted on job boards continued to fall in April. While this suggests a lower level of competition for drivers seeking a new job than several months ago, the number of different employers posting these jobs increased by ~3,000 and is the highest level on record. Therefore, carriers are posting fewer jobs on average than in the past several months, but more carriers are looking for drivers than ever before.
Most concerning is that nearly 180,000 fewer drivers searched for a driving job in April than March (-14%). When compared to April 2019, there were ~330,000 fewer job seekers for driving jobs (-23%).
Market Information[4]
The freight market for trucking companies remains very strong in the short term and indicators suggest the market will remain very strong through Q3 and be beneficial to carriers through at least Q1 of 2022.
Retail sales remain very high, and the industrial economy is beginning to accelerate considerably. These will both keep freight demand high, and total truck loadings are forecast to be 8% higher in 2021 than in 2020. Capacity will likely remain incredibly tight, and the undersupply of trucks and drivers means that freight markets are likely to continue to play catch-up for at least the next several quarters. Where possible, retailers will try to replenish inventory levels by October to be prepared for the peak holiday shopping season.
The shortage of drivers continues to reduce capacity. Many driver training schools are running at ~50%–60% capacity, which keeps retiring drivers from being replaced. Trucking employment is still down by 42,100 jobs (2.8%) from February 2020. At the same time, new trucks remain in short supply and supply chain difficulties for truck orders are expected to persist into at least Q3.
Spot rates continue to be very high and should not fall very much in the short term. Total rates are forecast to be 14.6% higher in 2021 than 2020, while evidence suggests that truckload rates and earnings may peak in the latter half of 2021 or even in 2022. Currently, it looks as though general freight contract rates may be peaking, but specialized contract prices are poised for further growth.
As always, there are a lot of different variables that could change the market for carriers. There will almost certainly be a shift back to spending on services and away from goods in 2H 2021 or 1H 2022, and increases in taxes and/or inflation are possible. Additionally, hundreds of thousands of extra trucks will be delivered over the next few quarters, and driving schools will begin operating closer to full capacity. Any faltering in demand in late 2021 or early 2022—as drivers and trucks are rapidly added—could greatly change the challenges carriers face.
[4] Market information taken from:
FreightWaves Freight Intel. “Q2 Shipper Rate Report: May 2021.” 18 May 2021, FreightWaves White Paper.
FTR. “Trucking Update: May 2021.” 30 Apr 2021, FTR.
Miller, Jason. LinkedIn postings (multiple). Apr 2021, Michigan State University.
[box]
Click the image below to download a PDF of the full report.
[/box]
