Look both ways before you leap

| March 07, 2006

“You’re going to be down for at least three weeks,” Amen says. “You have to identify your truck, turn in your Qualcomm and trailer. They’re going to keep some of your escrow. You might not get paid for your last delivery on time. There’s orientation at the new carrier. It’s a process.”

Not to mention all the loads that will pass by while a trucker is waiting for all his ducks to get in a row. For example, an owner-operator running 130,000 miles a year who sits for three weeks will miss out on more than $7,600 in paid miles, Amen estimates.

Even when they start driving again, owner-operators will not earn the money right away that they did at their previous carrier. Few drivers start driving the same number of miles immediately upon hire. For owner-operators it may take time to identify the new carrier’s best lanes, figure out procedures at shipper locations and build the good will with dispatchers that leads to more lucrative loads.

Other costs
For some drivers a move can mean a loss of investment, too. Earl Fletcher moved from Grand Motor Freight to Murphy Transportation six years ago. Though he now pulls in more money with Murphy by putting more road under his tires, the move was expensive and it took Fletcher time to recover.

“I was in a lease/purchase [program with Grand Motor Freight] and I lost my lease,” Fletcher says. “I lost $14,000 when I gave the truck back.” He also lost $4,000 when he stayed parked between employers. Still, even though it took time to recover, Fletcher is glad he made the decision. “I’m happy where I am right now,” he says.

A 2-cent-per-mile increase translates to roughly $2,600 in revenue over the course of a year, but a trucker may miss out on the thousands of dollars some carriers give to drivers who stay for five or 10 years. Company drivers also may give up valuable safety and longevity bonuses and seniority perks, such as new model trucks, by leaving for greener pastures. And they could lose access to medical insurance and other benefits, such as 401(k), for months or even a year when they make the switch.

Owner-operators looking to score a few more pennies a mile may give it back if their new carrier doesn’t have as good a program to allow drivers to purchase fuel, repairs and parts at lower rates. Both company drivers and owner-operators making the switch from a carrier who pays based on practical miles to one that uses household goods miles may lose as much as 10 percent of their pay to the new calculation, even if they are getting more per mile.

It all requires careful consideration, says Dart’s Heinemeyer. “It’s all about research and all about packaging,” he says. “Don’t just look at rate per mile, but what’s their fuel surcharge and are they competitive there? Do they pay fuel surcharge on all miles or just loaded miles? Do they hold your settlement for a week or two weeks? All these things come into play. Switching for five cents may sound great, but it may not be a financially sound decision.”

One more hop
Truckers should also consider another factor – their résumé. Chances are your next employer will want to know how many other carriers you’ve worked for. Drivers who make frequent changes are less desirable to the very carriers that pay more and offer more benefits, recruiters say.

But changing companies is not always a bad idea.

Allen Schwinn, who now drives for CFI, left his last carrier because he couldn’t get enough miles. The shift cost him at least $4,000, but it paid off within a year. “Right off the bat, I got better miles. I was making $3,000 to $3,500 a week,” Schwinn says.

Other drivers have lost very little money during their career changes. Bill Holland now drives for Marten Transport after a switch in early 2005. He has changed carriers six times during his 15 years of driving, and money has always been the motivation. “I lost one paycheck, maybe, from orientation,” Holland says. He also temporarily lost insurance benefits. But better rates and pay began on the first haul. Over time other benefits kick in, too.

“They [Marten] give you 401(k) and a raise after one year, and a bonus raise six months after that,” Holland says.

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