A leased owner-operator has a bad day, bad load or bad conversation and decides it’s time to jump to a carrier that pays 2 cents more per mile than he’s currently getting. He thinks he’s made a good decision because, hey, he’s getting 2 cents more per mile, right?
Not so fast. It will take him about three weeks to leave his current carrier, go through orientation and get familiar enough with the new carrier’s systems to start earning a decent income. During that time, he still needs to cover his fixed expenses – truck payment, insurance and permits. Plus, he’s lost three weeks of potential income and his personal expenses keep piling up. That means he could be facing more than $13,000 in costs in one month. Of course, he’s now getting 2 cents more per mile, which will earn him a whopping $2,400 if he drives 120,000 miles in the coming year. That doesn’t help a whole lot.
As for carriers, there’s an estimated $8,000 cost (advertising, orientation, etc.) for every owner-operator turnover. Multiply that by 100 percent turnover of the nation’s approximately 100,000 leased operators, and you get an annual cost approaching $1 billion.
To look for ways to address this problem, representatives from more than 30 carriers gathered last month in Tuscaloosa, Ala., at the Partners in Business Owner-Operator Retention Forum. Carriers with some of the lowest owner-operator turnover rates in the nation shared their insights:
- They respect – and genuinely like – their owner-operators. They spoke of owner-operators as their “internal customers,” and of striving to make them feel “like the most important people in the world.”
- They start off on the right foot by not hiring problems. One executive said if an owner-operator has a truck payment that’s too high, he won’t lease that driver because he’s already set himself up to fail.
- They ask for – and act on – suggestions from their owner-operators on how to improve operations, from revamping their fuel surcharge program to reorganizing their settlement statements.
- And perhaps most importantly, they provide ways for owner-operators to continually improve their businesses, whether it’s access to a business consultant or to some form of ongoing education.
As one executive said, owner-operators are a “hot, hot commodity.” The owner-operators who recognize that fact and take control of their business will rise to the top. And the carriers that embrace owner-operators as business partners will be rewarded with the best source of safe, dependable and productive capacity in trucking.