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automatic, Norlin says. Before, the carrier charged customers but the contractor didn't always receive it. Now contractors automatically get paid $20 an hour if they're on time and have to wait more than two hours, even if the customer doesn't pay Marten, he says. In cases where the shipper or receiver is known for delays, detention pay is $30 an hour. Detention time is calculated as part of the revenue that is shared by contractors and Prime, Hancock says. The installation of electronic logs makes it easier to confront customers. "We're putting the bill on the customer and making them pay," he says. Lease option One traditional option for a carrier to boost its owner- operator ranks is through lease-purchase programs. FFE Transportation Services is cutting lease rates up to 25 percent in its Drive to Own program. In January the carrier opened a new driver academy that covers driving skills, obtaining a CDL and career paths. An 18-day course is followed by a six-week driver training program. Drivers can enter the lease program within four months of finishing driver training. "Our growth and future driver capacity is going to come from our academy, rather than from traditional owner-operator recruiting," says Rob Newell, vice president of capacity development for FFE. Newell says that from late March to mid-July the company approved 39 drivers for the program. Prime's approach is to treat the truck lease more as a rental. Instead of traditional lease-purchase, the program offers the operator the option of buying the vehicle or walking away with a "completion bonus," reasoning that most of the truck's useful life has been used up during the lease.At the end of a typical three- year term, that bonus can range from a few thousand dollars to $30,000, Hancock says. "The more miles he runs, the more money he receives," he says. Barr-Nunn's lease-purchase plan attracts about 70 percent new contractors, the rest existing owner- operators, with most of those from outside the company. "We're getting a high experience level, with a majority with more than five years' experience," Blank says. Richard Forney was one of the first at Barr-Nunn to move from company driver to owner-operator when the company launched its lease-purchase program. He paid off the lease early on his 2005 truck and is considering buying a new truck next spring. Forney says he receives an additional 5 cents a mile in hazmat pay for all miles and extra pay of at least 3 cents a mile, depending on length of haul, under the carrier's Health insurance option spreads Although an increasing number of carriers is offering health insurance plans as a benefit in recruiting independent contractors, the share of the total industry remains small. Inquiries at TrueNorth Companies about insurance programs from carriers in the first half of the year were double the same period the previous year and sales were up about 20 percent, said Mike Vogel, a vice president. The company serves 90 carriers offering health insurance and related products to contractors. Because of law that prohibit employers from offering employee benefits to independent contractors, any insurance products for owner-operators must be totally separate from the carrier's group plan for employee drivers, says Jason Smith, executive vice president of transportation for TrueNorth. A carrier may provide individual products for major medical, limited medical, dental, vision and life insurance to contractors. Carriers offering individual plans usually lease out to 100 owner-operators or more, Vogel says. "For smaller carriers, it just doesn't typically make a lot of sense administratively to put a program in place," he says. Cost for a major medical plan for a contractor will typically be higher — $500-$750 monthly — because the carrier isn't contributing to it. A limited medical policy covering pre-existing conditions, doctor's office visits, minor surgeries and hospital stays might cost one-fourth as much. DRY VAN FLATBED REEFER Income per month $5,000 $4,500 $4,000 $3,500 $3,000 2010 FLATBED LEADS PACK 2011 Owner-operator net income was stagnant or falling in late 2010 and early 2011, according to averages from clients with owner-operator financial services provider ATBS. Flatbed earnings rose markedly in the second quarter. Because much of that segment's capacity was wiped out early in the recession, increased demand from governmental stimu- lus spending and elsewhere produced strong rate increases, says ATBS President Todd Amen. 30 OVERDRIVE OCTOBER 2011 Pay day