Payday

Max Kvidera | October 01, 2011

Carriers chase after a diminished pool of owner-operator candidates with higher pay, bonuses and more compensation options.

Marten Transport leases about 100 owner-operators but would like to double that number over the next year.

Flatbed owner-operators enjoyed higher rates of pay and net income during the spring, thanks to increased freight demand in a segment where many operators had left the business during the recession.

Prime Inc. works with approximately 3,000 independent contractors and expects to grow that total 8 percent to 14 percent into 2012, says John Hancock, director of recruiting. “The market is asking for more capacity than is out there,” he says.

More than 120 owner-operators are leased to Barr-Nunn Transportation, and the Granger, Iowa-based carrier aims to increase its capacity. “If we could go to 200 owner-operators, we would,” says Jeff Blank, recruiting director.

These and other carriers are competing for a pool of qualified operators that has been shrinking because of the recession, growing government regulations and retiring drivers. “I don’t see that number increasing,” Blank says. “It’s hard to say where they’re going to come from.”

With the recession’s end and an increase in freight, many carriers are posting bonuses, hiking pay and offering other inducements to sign owner-operators.

The quality of unaffiliated driver prospects is “marginal at best,” says Gordon Klemp, president of National Transportation Institute, who has been tracking driver compensation for 16 years. Plus, the Compliance, Safety, Accountability program and other regulatory efforts are further whittling the ranks of operators.

In some cases, carriers have restored rates that were cut during the 2008-09 slump, while others have increased to higher levels. “We’re seeing fleets get downright shrewd about how to target pay to find things that motivate drivers,” Klemp says. He forecasts owner-operator pay will climb 4 to 6 cents a mile in the next 12 months, with the lower figure achievable even if the economy is still limping along.

“I don’t think this is over,” says Tom Kretsinger Jr., president of American Central Transport. “This is the first round.”

Mileage pay

This year Barr-Nunn raised rates in its Pure Pay program, where the contractor pays for his license plates and permits, to $1 per loaded mile from 97 cents, and 80 cents per empty mile from 70 cents. Its Band Pay program, which is based on length of haul and where the company covers cost of plates and permits, lifted pay 2 cents a mile.

ACT boosted its top pay for an operator with a hazardous materials endorsement to 98 cents under load and 90 cents empty. Without hazmat, the pay increased to 94 cents loaded and 90 cents empty. “Our higher rates account for the operator paying for plates, permits and getting more pay,” Kretsinger says. “They can buy their own plates or buy it through us at cost.”

On May 1, Marten increased its mileage rates by 4 cents so that it ranges from 88 cents to $1 a mile based on length of haul. For hauls up to 150 miles, the carrier pays 50 percent of the load’s net revenue, the only instance where it pays a percentage, says Tim Norlin, director of recruiting.