Exit signs

| August 01, 2001

It took months of warning signs before Franke Schein left his carrier of three years. “The first thing I recall was older hands – owner-operators of 10 to 12 years (with the carrier)- they suddenly weren’t there,” Schein says. The Ohio owner-operator left his carrier about four months after he started noticing things were going downhill, but not before his pay was slashed, a competitor took his carrier’s customers, executives left and dispatchers assigned him unfavorable loads.

Owner-operators and trucking experts agree such a situation is worth leaving. Other signs of woe include slow payments, corporate financial trouble, broken promises and fewer miles. But you shouldn’t leave your carrier without another job to go to and without investigating your new company. You don’t want to lose pay and benefits, only to replicate your problems somewhere new, says Tom Sonricker, president of the North Carolina-based Transport Business Solutions, a tax and accounting firm. “You may think you have a better deal but make sure you do your homework,” Sonricker says.

Economic pressures are limiting what carriers can offer truckers, says Gordon Klemp, president of SignPost, publisher of the National Survey of Driver Wages. “Companies are figuring what they can shave off,” Klemp says.

Also, the trucking industry has less of a driver shortage than in recent years, says Dick Durst, chief executive officer of Ohio-based Arctic Express. Durst has 33 percent turnover among his 25 owner-operators. “We’re seeing carriers take a harder look at who they’ll put in their trucks,” Durst says. “We’re rejecting 19 out of 20 applications.”

Schein says his former carrier gradually cut its flat rate for a Columbus, Ohio, to Chicago load from $550 to $445, but a competitor still won some of the company’s business. “That’s a sign of insolvency or major changes coming,” he says. “When a competitor starts pulling your freight, it’s time to do a 360-degree turnaround and see what’s going on.”

Schein left for Brooks Trucking of Columbus, Ohio, which offered dramatically better pay and wait time. “They paid $400 for Columbus to Cleveland,” he says. “It was half the distance for the same pay as the other company.” He hears his former carrier continues to lose truckers at a high rate.

Of course, pay isn’t everything. Tom Finkbiner, head of the Florida-based Quality Distribution, says his company offers safety and service bonuses to his 3,500-tractor fleet, 2,200 of which are controlled by owner-operators. He attributes his comparably low turnover rate of 40 percent to giving recognition for good performance.

Klemp says his surveys indicate such factors are important to truckers. “A lot of owner-operators become dissatisfied, not so much with pay rate but with practices,” he says. Owner-operators often have complaints about the procedure, accuracy and speed of pay and reimbursement packages. High turnover occurs when contractors feel the carrier and dispatcher are not listening to them, Klemp says.

Some owner-operators, such as Schein, believe management is more responsive at smaller companies. “It’s a one-on-one relationship,” he explains. Schein believes smaller carriers, especially ones headed by an owner-operator, tend to treat truckers better because they cannot afford to keep rehiring. “He (the owner-operator) has got his future tied up with that truck,” he says.

Missouri owner-operator Chris Yoder, who has leased to only four carriers since 1974, agrees. He leases to the Missouri-based Plaza Express, a small fleet. But smaller has not been better for Dan Pruitt of Ohio. He found better deals at larger carriers and leases his seven trucks to several carriers. “The bigger, the better, because they have more freight,” Pruitt says.

Look for a pattern of problems before leaving a carrier, he says. “Most start out running you real good, but after two to three months, you’re at the bottom of their list,” Pruitt says.

Still, when freight slows down, ask how long the slowdown has existed, says Ronnie Dowdy, president of the Arkansas-based Ronnie Dowdy Inc. Is freight decreasing for other truckers with your carrier? Is the market softening for your freight?

That’s only part of how owner-operators should evaluate their carrier, says Dowdy, chairman of the driver recruitment and retention panel for the Truckload Carriers Association. “Are there hidden costs in settlements? No hidden deductions? What deductions are above board? Are settlements correct?”

Another way of measuring your carrier is through news stories and, for publicly owned companies, stock reports, says Todd Spencer, spokesman for the Owner-Operator Independent Drivers Association. Be wary of signs of corporate trouble when payments slow. Also, your lease should address fuel surcharges, and you should receive 100 percent of those fees, Spencer says.

The amount of home time, as well as a carrier’s faithfulness to honor its commitment in scheduling your downtime, are also factors in deciding whether to find another company. Randolph Rochelle of Arkansas, a father of three, was unhappy at his former job because he wanted more time with his family and church. Bruce Oakley Trucking offered more time home, and the 260-owner-operator fleet kept that verbal promise, but Rochelle hears of carriers that are less committed. “For lots of owner-operators, the verbal agreement just kind of runs out,” says Rochelle, who sold his truck in July and became one of Oakley’s port managers.

When you change carriers, consider the things you lose, such as good relationships and respect that you might have built up at your old carrier, says Sonricker.

You can also lose money. You lose pay for the time you are not working, and if you break your lease, you lose bobtail insurance and may incur termination penalties. Getting escrow money back can be problematic. “Sometimes there are backups and delays with getting the paperwork filled out,” Sonricker says.

Dowdy also recommends weighing your carrier’s benefits, such as discounts for tires and maintenance, before deciding to leave. “If you are looking for a trucking company where there is never a problem, then sell your truck and get out of the business,” Dowdy says. “You are looking for companies that don’t exist, instead of working through problems.”



Making sure the grass is greener

When considering a new company, other owner-operators are excellent sources of information. “Drivers’ word of mouth goes a long way,” says Joel Dandrea, vice president of the Specialized Carriers and Rigging Association.

Check the facts, too, Dandrea says. Get a copy of their written policies. Read the company’s safety and out-of-service ratings on the Federal Motor Carrier Safety Administration’s website.

Ron Davis, safety director for Arkansas-based Bruce Oakley, says truckers should ask if the carrier is doing what it advertised. “Look for stability,” Davis says. “Is the carrier people-oriented? Do they have a good safety record? You want to see that they’re not just looking at
drivers like a piece of meat.”

Even as a truck owner, you should pay attention to the quality of the company trucks, Dandrea says. “What premium do they place on drivers? Do they enter safety contests or truck driving championships?” he asks.

Owner-operators need to ask more questions before leasing, such as the average length of haul, pay for deadheading and insurance. Gordon Klemp, president of SignPost, publisher of the National Survey of Driver Wages, adds that contractors should consider the cargo hauled and ask about down time as well. Most truckers want the benefit of a trip-reporting-delivery system and a toll-avoidance system, he adds.

Tom Sonricker, president of the North Carolina-based Transport Business Solutions, says weighing the pros and cons includes crunching numbers. “Lay it out on a piece of paper,” Sonricker suggests. One contractor he knew was ready to leave a carrier, but then he realized the amount of unpaid deadhead miles would eliminate the plus of extra pay offered at the new carrier.

Finally, study the prospective company’s lease. If the language is obscure, get an attorney or other qualified person to help you interpret it. Some companies hesitate in showing you their lease, says Chris Yoder, a longtime Missouri owner-operator. When that happens it’s a red flag to look elsewhere, says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

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