How mostly owner-op fleet K&J Trucking became the 'Best Fleet to Drive For'

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Updated Jun 24, 2024
K&J Trucking staff in front of truck
K&J Trucking was named the Overall Best Fleet to Drive For in the Small Carrier category by CarriersEdge earlier this year. The majority owner-operator-driven company goes out of its way to ensure leased owner businesses are successful.
Photos courtesy of K&J Trucking unless otherwise noted

Hearing truck drivers refer to the company they work for as “family” isn't uncommon, but Sioux Falls, South Dakota-based K&J Trucking exemplifies the notion, according to leased owner-operator Theron Thompson.

Thompson was instrumental in K&J’s journey in recent years to the very top of the CarriersEdge Best Fleets to Drive For competition. He nominated the fleet for the first time in 2021, and K&J ended up in the program’s “Fleets to Watch” category, just outside the Top 20 that year.

K&J, a fleet of around 125 trucks that is right at 83% owner-operated, was disappointed at first not landing higher on the list. However, “then we started hearing, ‘Well, that’s a big deal to get an honorable mention because the same people are in Best Fleets every year and it’s too hard to crack the case,’” said K&J owner Shelley Koch. After that year, the key to finding more success in the program was “learning how to tell our story,” she added. “It’s really what it came down to.”

In 2022 and 2023, K&J did crack the top 20, before being named the Best Overall Fleet to Drive For in the small carrier category in 2024.

“I can tell you how we got here,” Koch said. “It’s the staff. God is good. This group of people that I work with every day is amazing, as well as our drivers. So I feel like this is as much a win for the administrative staff and the shop as it is for the drivers, because our drivers are such an integral part of us.”

Jane Jazrawy, CEO of CarriersEdge -- which puts on the Best Fleets program -- said K&J does things, particularly for its contractors, that many fleets don’t or just won’t do.

“They offer services for their contractors that are unusual,” she said. “Most contractor fleets will say, ‘Oh, we can't do that,' because of wanting to maintain the distance, you know, to make them true owner-operators. But K&J kind of manages to offer the services, but it's up to the owner-operators, up to that business owner, whether they want to partake in that or not. But the offering is there, which is what makes it really nice, and I think an environment to grow a business.”

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While generally carriers can’t offer employee benefits to contractors, Jazrawy noted, K&J does offer easy access to group discounts on benefits through a third party (more on that later). K&J also helps with coaching, particularly business coaching, to ensure success to the owner-operators' leased there.

“What I find with the fleets that do participate [in Best Fleets], even if they are primarily contractor fleets, is that they do it differently,” Jazrawy said. “They don’t do it the same way. They’re not offering [company-paid] health insurance, obviously, but there are other things that you can do to make some place a good place to, maybe not work, but to do business with. And that is where I think K&J” excels.

Theron ThompsonOwner-operator Theron Thompson has worked with K&J Trucking for a total of around 11 years, the last nine leased to the company as an owner-operator.South Dakota Trucking Association

[Related: A short leash on long-term stability, profit: Trucker of the Month Gary Schloo]

Theron Thompson's journey to full appreciation of the 'K&J way'

December 9, 2020 -- the day Theron Thompson was diagnosed with head and neck cancer. The 2021 Kenworth T680 he’s currently hauling with had just come in -- two days before Thanksgiving. That fateful December day he had just sold his prior truck. “It’s like, 'What am I going to do?" he said. "I just sold my truck and I got this new one, and I don’t know what’s going to happen.”

Thompson has been an owner-operator since he got into the trucking business in the early 1990s, minus a few years after he sold a fleet of 13 trucks and worked as a company driver. Some of that time was with with K&J. His life around that time called for Thompson to be closer to home, so he left K&J for a local job. He would then follow a group of drivers he knew to another company, staying there for 14 years, before he returned to K&J now nearly nine years ago, this time as an owner-operator.

Thompson's always enjoyed working with Shelley Koch and the team at K&J, but it was that cancer diagnosis and all the uncertainty that led him to this conclusion: “Everybody always says they’re family,” he said. “When they say it at K&J, they mean it.”

Post-diagnosis, Thompson and his wife went to Koch and told her what was going on.

“She says, ‘Don’t worry about it, Theron,’” he said. Essentially, Thompson said, K&J took on his truck payment and allowed him to pay off the note on his own time after he got his cancer treatments. “She picked up the phone, called the bank, and said, 'This is how it’s going to go.' Boom. Not a big deal. You show me another company that would actually go and do that.”

K&J Trucking was officially founded in 1979 by Shelley Koch’s parents, Dave and Sharon Koch, with just one truck. In the 1980s, Dave Koch brought in a partner, Don Jerke, who brought the J to the fleet’s name.

The company’s first customer was John Morrell & Co., now Smithfield Foods. Dave Koch employed a time-honored strategy for securing direct business as a small fleet owner-operator, asking the company for the lane that nobody else wanted. Destination: Phoenix, Arizona.

In those early years, K&J hauled to the border state, bringing produce back to Chicago. The company grew from there.

[Related: The question any independent owner-operator business must answer]

“I think we’re a typical family truck line,” Shelley Koch said. “You start with one truck and that’s what happens.”

Dave Koch passed in 1991, and by the late '80s the fleet was sitting at around 50 or 60 trucks, Shelley said, and she'd started working there part-time. “And then I just stayed there. I was kind of going to school and doing different things, but after [her father's] first heart attack, my parents asked if I would be interested in taking over K&J one day.”

At just 25 years old, she was a solid yes, though “you don’t know what you’re saying yes to” at that age, she said. “And then four years later, my dad passed away, and I took over.”

The fleet’s size has fluctuated through the years, shrinking some at times, growing at others. K&J stayed right around 100 trucks in the years before 2022 when it bought Midwest Continental. Now at 125 units, it's still doing mostly reefer work. The company also has a van division running for a dedicated customer hauling cabinets all over the country.

K&J fuel islandK&J recently completed construction of a new fuel island at its Sioux Falls, South Dakota, headquarters, covered to help protect drivers from the elements, especially those harsh South Dakota winters.

Management with owner-op success in mind

Given the nature of K&J’s customers, owner-operators get their choice of loads to a degree, though generally the company runs the same regions consistently. If an owner doesn’t want to run California, K&J doesn’t send him there. If a driver wants to stay out three weeks at a time, the fleet dispatches with that in mind.

Office staff strives to keep an eye on owners' revenue per mile each week. “If we have somebody that’s falling short because of either our problem or their problem, we will try to make it up to them,” Koch said. “They might get offered a higher-paying load that week than someone else just because we’re trying to keep everybody at a certain level, because it’s damn tough out there today, and we need to keep our drivers as whole as we possibly can.”

As also mentioned by Jazrawy, the company offers other  – in some ways “unusual” – methods of support. Koch and company offer physical damage insurance among the cheapest she’s aware of, with owners paying 2% of the value of their truck with a $1,000 deductible. If operators choose to get worker’s comp through K&J, it’s under $200 a month, she added.

“All the fuel discounts get passed on,” she noted. “We have in-ground fuel here, and I think we put 2 cents on there to offset the cost. Our shop labor rate is under $80, and you get our discount on parts. So, I always tell an operator, to be successful, revenue is important, but expense control probably is where your bread and butter’s at.”

[Related: Keen fixed, variable cost understanding key to owner-operator business success]

Asked about other benefits, Koch said the company “really struggled with getting healthcare to our operators They used to be part of our group, and then we were told they could no longer be under our group in the state of South Dakota.”

So while the company doesn’t have a group policy option for leased owners, K&J is able to steer owner-ops to individual policies with a group discount. Operators can also get vision, dental, IDShield, disability, cancer insurance and more at discount rates.

K&J Trucking drivers loungeK&J's headquarters features a drivers lounge with a kitchen, recliners and more.

[Related: Health-share plans prove to be attractive insurance alternative for owner-ops, small fleets]

Owner-operator and small fleet owner Doug Newman came to K&J after a 21-year career in banking. He had known how to drive a truck for a number of years, helping a friend do farm-to-elevator work, but he hadn’t truly been a full-time driver up until about eight years ago.

Newman knew K&J through a friend, and he got in touch with Koch about coming on as an owner-operator. She wanted him to work for six months as a company driver before leasing on, so he did that, then signed on with a 2017 Kenworth T680 he ordered. He’s bought seven trucks since then, selling two at the peak of used-truck prices a couple years ago, and is now off the road himself while putting drivers in three trucks he still leases to K&J.

“They do my payroll; they service the trucks; they dispatch the trucks,” he said. "It’s just an awesome working relationship.”

As a fleet owner himself, Newman said he tries to align the benefits he offers his three drivers with those that K&J offers its own, “just because it makes things flow smoother. Drivers talk to drivers.”

Small Fleet Championship logoThrough the end of July 2024, small fleet owners with authority (up to 30 trucks) can enter Overdrive's Small Fleet Championship, sponsored by NASTC, via this link.Koch “is just an incredible lady,” he said. “She’s just open, honest, easy to talk to. She’s got good business sense. She’s got good people skills. She’s not afraid to tell you when you’re wrong, and she’s not afraid to give you compliments. She’s just an all-around good person.”

A cautious approach to lease-purchase 

As noted, most drivers at K&J are leased owners like Newman, yet the company does employ company drivers and has ushered some into a lease-purchase program when interest and ability seem clear. Lease-purchases have long been a hot-button issue in trucking, getting hotter of late with the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force shining a light on predatory practices by some fleets.

Koch said K&J strives to be different. First, in order to even get into a lease-purchase with Koch, six months' worth of driving for K&J as an employee is a prerequisite. “We need to get to know you, and you need to get to know us,” Koch said. “We do not let you walk through the door and lease a truck with us. I don't know how you can know about a company and do that personally and feel good about basically getting on the hook for a truck.”

If eventual truck ownership through lease-purchasing is something a K&J driver is interested in, “we're going to start watching your performance and start coaching you on better ways to do your job,” she added. “That might be fuel economy. It might be better load selection. It might be better safety practices, different things like that.”

K&J leased owner-operator Eric CallowayK&J leased owner-operator Eric Calloway is shown here with his truck.Six months in as an employee, though, drivers aren’t guaranteed a truck. If there are concerns about performance, how the operator handles money, maintenance, anything like that, the company works with the drivers to address those issues. If they’re relatively minor, “we will tell you, 'You can go ahead and lease a truck, but these are our minor concerns and these are things we think will prohibit you from getting the most profitability out of your business,'” Koch said.

In the event of major concerns, the company simply doesn't help a driver into any lease-purchase. Rather, they offer the operator 90 days to make changes, then reassess the situation.

Once in the program, operators make weekly payments based on a depreciation number corresponding to what K&J paid for the truck. “They’re getting the benefit of our discounted pricing from our OEMs when we purchase the trucks,” she said.

The company coaches operators on tax liability, and how that works as a business owner. “It’s really kind of a total approach to, ‘How do you run a business and how do you be successful running your business?’” Koch said. “Because anybody can get into a lease payment and have to pay all this money and just barely make ends meet. That’s not success in our book.”

On the flip side, of course, owner-operators can and do bring their own equipment to K&J. Generally, the company tries to stick to a requirement that an owners' equipment be four years old or newer. Given recent economic realities, they've been more flexible on that if maintenance records are up to par, the truck passes an inspection, and a plan is laid out on upgrading to newer equipment when the economy is more favorable.

“We're not interested in running old equipment here forever,” Koch said. “In a perfect world, it'd be 500,000 miles or less. We're not living in a perfect world. So, we take it case by case.”

For leased small fleet owner Newman, the relationship's been a match. Sure, K&J is the only trucking company he's ever worked with, yet he's certain, too, it will keep that status for the rest of his time in the business. He plans to stay leased to K&J until his retirement.

Access past features in Overdrive's occasional profile series of fleets leasing owner-operators, including some past Small Fleet Champ contenders, via this link.

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