In The News
The Owner-Operator’s Guide to Selecting a Carrier
When you're looking at the various driver recruitment ads from expedite trucking carriers, you probably notice that many of them tout similar benefits. You'll see phrases like, "24/7 live dispatch," "No-touch freight," "Sign-on bonus available," "Fuel cards," and so forth.
But how do you sift through the similar-sounding job postings to find the distinctions that matter most to your career? Use this eight-point checklist to help you dig deeper into the carriers you're considering to find the best fit for you.
1. Business Growth Support
Think about your long-term business goals. What does the carrier bring to the table to help you fulfill those objectives?
Michael Abood, Sr. Manager of Capacity for FedEx Custom Critical, advises, "You want to know: Is the carrier an established company that you can grow with over time? Does it offer the support infrastructure and organization you need to help you succeed -- whether you have one truck or decide to grow it to 10 or 15?"
The key here is to find this out upfront, so that you avoid the hassle of moving from carrier to carrier to finally discover the right fit for your business.
2. Compensation
Does the carrier pay by flat rate per loaded mile or percentage of revenue on each load?
According to Abood with FedEx Custom Critical, which offers both flat rate and percentage compensation plans, fleet owners often prefer a flat rate because it simplifies the revenue and cost projection process, especially when you're having to manage multiple trucks. He says that percentage pay tends to be favored by individuals and teams because of the higher upside potential, depending on the loads they get.
The idea here is to run numbers that compare flat rate and percentage pay plans based on the specifics of your situation -- to determine which route would be most advantageous to you.
Another component of owner-operator compensation is fuel surcharge. It can be a challenge to accurately figure out which companies offer the best rates because they all calculate fuel surcharge differently. Therefore, ask each carrier how they calculate their rates and whether they pay on all miles or only on loaded miles. If it's "all miles," find out what the difference is in fuel surcharge for loaded and unloaded miles.
(For more information, check out the Fuel Surcharge Calculator on the Owner-Operator Independent Drivers Association website.)
Veteran expediter Linda Caffee also recommends that owner-operators ask carriers about their fuel card benefits, which directly impact how much money you get to keep per load. "Carriers have different rates that they've negotiated with fuel providers. So, you want to know: What are those discounts? How do those discounts compare from carrier to carrier?" says Caffee.
3. Payment Timeframe
No matter what's included in a carrier's compensation plan, if you have to wait on your money longer than you expect, that delay in cash flow could sink your business before it gets started.
"Some carriers will hold driver pay up to three weeks," says John Mueller, President of Safety and Recruiting/Partner for Premium Transportation Logistics LLC. "For us, the driver turns in paperwork on Monday and is paid on those loads on Friday."
This way, you eliminate unpleasant surprises by knowing precisely when you should get paid and how the process works to ensure timely payment.
4. Upfront Expenses
Carriers typically collect escrow (as much as $1,000 or so) from drivers to cover insurance deductibles, satellite services, fuel taxes, and other items included in the lease agreement. Find out how much escrow is collected and what's included. Some carriers will offer drivers the option to make weekly payments to help reduce the upfront cash burden.
5. Load Acceptance Rate
Most carriers will have a stated "non-forced dispatch" policy, which means you have the right to refuse a load without recourse. But is this always the case in practice? That depends on the carrier.
"Does the carrier have a load acceptance rate? If so, what is it? This is important to find out," says Caffee. "You want to know upfront that if you only accept a certain number of loads, is that going to affect you getting the next load?"
6. Customer Base
Who are the carrier's primary customers? Is the carrier locked into one industry, where its success (and yours) would be tied to the health of that market? Or does the carrier serve a wider range of industries?
"If I am evaluating a carrier, I want to know what their book of business is," says Abood. "This will let me know if the company is going to be around for the long haul. Or, if a particular market segment takes a turn, will the carrier be in trouble?"
7. CSA Score
"If a company's CSA (Compliance, Safety, Accountability) score is beyond a certain threshold, it will be subject to more inspections. And a carrier's customers look at those safety scores, as well. If the scores aren't good, customers may not choose that carrier as often -- and that directly affects your ability to get loads," says Abood. "From an owner-operator's perspective, I would want to know: Would my business be at risk with this company because of its CSA score?"
(Click Here to look up a carrier's CSA score.
8. The Company Culture
Mueller's company, Premium Transportation Logistics, touts an "Open Door Policy" as one of its benefits to owner operators. "Some carriers put up 'barriers' that make it unfriendly for drivers to interact with the company," says Mueller. "We try to be as accessible as possible everyday to give our drivers that sense of a more friendly and warm environment."
How do you learn more about a carrier's culture?
"Talk with other drivers about their experiences with a carrier," says Abood with FedEx Custom Critical. "A carrier's reputation precedes them."
Think about the carriers you're considering. What's the sense you get about their company culture? Is it an environment in which you think your business could thrive? Do you feel that you would be treated with honesty and respect?
As Mueller with puts it: "Most carriers offer the same benefits. But, often, the one true differentiator is the culture the carrier creates for its drivers."
The Bottom Line
One of the most important decisions you make as an expedite owner-operator is selecting the trucking carrier you will lease to. So, follow these eight points to narrow your search to those carriers that offer the compensation plan, freight opportunities, and support you need to take your business -- and income -- to a higher level.