Look both ways before you leap

| March 07, 2006

Job-hopping should be a business decision, not an emotional one.

In mid-December owner-operator Brian Powell of Farwell, Texas, wasn’t sure leaving his carrier of four and a half years to jump to a new trucking company was a good decision. The money made sense – he was getting the same number of miles each week but more pay per mile and a better fuel surcharge.

So he made the jump.

Still, he gave up several weeks of income – at least $1,000 in profit, he estimates – and there were other issues just as important as the money. “At my old company, I knew who to go to when there was a problem,” Powell says. “I knew how settlement people wanted their paperwork done. I knew how to work the system. I’m still learning the ropes here.”

With driver turnover rates in the trucking industry hovering at an all-time high, according to the American Trucking Associations, plenty of truckers are looking to leap from one carrier to another.

Sometimes it’s the right decision. Many times it’s not. And the difference between a good decision and a bad one is in the preparation you make before you decide. Checking out both your current company and prospective new company as thoroughly as you can is an essential pre-jump procedure.

So why do so many truckers make the jump?

“The No. 1 reason is financial,” says Darin Heinemeyer, director of recruiting at Dart Transit. “The No. 2 reason is not getting enough miles. That’s an operational issue, and it’s also a symptom of the first reason. The No. 3 reason is a family situation, which is usually another symptom of finances. If your finances aren’t working out, you’re going to have other problems.”

But most drivers make the leap without considering the true price. Changing to a new carrier – even one that offers more money per mile – can actually cost more than staying put, say accountants and recruiters. The direct financial costs can run into the thousands for owner-operators, and intangibles, such as new routes, new dispatchers and new procedures, can affect all truckers.

Recruiters and accountants say most drivers make the major decision to change employers based on emotion rather than good business, and many pay the price in their wallet.

“We try and talk our clients out of changing at all costs,” says Todd Amen, president of American Truck Business Services. “If they’re with a good carrier and making decent money, a change probably won’t do them any good. If you change carriers once in a year, you increase your odds of going out of business by 50 percent. If you change twice in one year, your odds go up 99 percent.”

Lost opportunity
Why does changing carriers have such a major effect on drivers? For owner-operators, fixed expenses like truck and insurance payments don’t stop during the inevitable down period between resignation and the time they receive their first settlement with a new carrier. For all drivers, at-home costs like mortgage payments and other living expenses also continue during that ramp-up period.

Truckers who are leaving because they can’t live on what they earn at one trucking company aren’t likely to do better just because a new company is offering 2 cents more a mile, Heinemeyer says.

“Most drivers are probably better off staying where they are,” Heinemeyer says. “It’s perception. They have a perception they’re not making much money. They have a perception that the system they’re working in isn’t working for them. We have contractors who say, ‘I’m not making enough money.’ Then we’ll crunch the numbers and find out they’re doing very well. We just have to figure out where their money is going.”

Moving to a new company may seem like a great opportunity. But lost opportunities cost many who make the move. Consider what the average owner-operator may give up in revenue to make a switch for 2 cents more a mile, says Todd Amen.

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