Why do owner-operators leave a trucking carrier?
If you ask carrier executives, the vast majority will tell you that the top reason is because of pay, says Tim Hindes, chief executive officer of Stay Metrics, a South Bend, Ind. firm that helps motor carriers capture insightful data to boost their driver engagement and retention rates. And that explains why you see a lot of trucking recruiters tout their sign-on bonuses, compensation plans and benefits.
But surveys of drivers and owner-operators tell a different story, says Hindes. “The number one reason across all carriers and all types of drivers, including owner-operators, is unmet expectations,” says Hindes. And that includes unmet expectations about pay.
In other words, when it comes to owner-operator compensation, if actual pay doesn’t match their expectations, owner-operators are likely to assume the recruiter has broken a promise, which causes them to lose trust in that carrier and search for another company.
The challenge, says Hindes, is that recruiters and prospective owner-operators rarely hash out realistic expectations upfront.
“The recruiter says, ‘We want you to come onboard with us because of this, this and this, but they never really ask that person, ‘What are you looking for? What are you expecting from us? What are you expecting from the industry?’ says Hindes. “So, when they get in the industry and buy their van or truck and they sit at home for three days and the phone doesn’t ring, they’re thinking, ‘What’s going on?’”
And many prospective owner-operators don’t know what they should expect or, even, what questions to ask of a carrier, says Hindes. So, they go into the business with unrealistic expectations in mind, setting themselves–and their relationship with their carrier–up for failure.
So, how can you ensure that you have realistic expectations of how much money you can make with a carrier before you lease on to them? Hindes suggests asking the recruiter about compensation in terms of weekly settlement, not pay rate.
Says Hindes, “You want to know, ‘What is your average settlement for drivers who drive my unit on a per-week basis?’ And then, the next question you want to ask is, ‘What is it for newer drivers?’ So, if you’re a Sprinter [van] driver, you want to know, ‘What does your average Sprinter driver make on a per-week basis? And what do your 90-day guys make?’”
The reason why “average settlement” is a helpful number for comparison is that it gives you a real-world compensation figure that factors in whether or not the carrier has enough business to keep you on the road making money.
And the question about “newer drivers” helps you know what to expect as you’re getting started. This way, you can determine whether the business is even a good fit before you take on the risk of buying a vehicle and leasing to a carrier.
After all, it doesn’t really matter how much a carrier says it will pay you per mile or per load, if they brought on too many drivers–and there are too few loads to go around–you likely won’t make the amount of money you need to earn to stay in business. But you also want to have realistic expectations of how hard you need to work in order to earn the average weekly settlement that the carrier says is possible.
“There needs to be a conversation where the recruiter sits with the prospective owner-operator and says, ‘Hey, you’re going to make this kind of money, but I’ll tell you that the guys who make this kind of money are only home about six times a year [or whatever the actual number is]” says Hindes. “Usually when we see home time as a reason [that a driver leaves a carrier], it’s because it wasn’t accurately portrayed to them.”
The Bottom Line
As an owner-operator and business owner, you’re responsible for your success. It’s up to you to ensure that you have realistic expectations of a carrier and address any potential issues before taking the next step. This way, you can put yourself in the best position to avoid unpleasant surprises–and the expense that comes with changing carriers.
And if you’re new to the expedite industry, make sure you know what to expect before signing the lease agreement. Tap into resources such as ExpeditersOnline.com and attend trade shows like Expedite Expo. Network with other drivers and owner-operators, asking them about the carriers they partner with- -what they like and dislike–so you can move forward in a relationship that is set up for success.
