Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/1002866
28 | Overdrive | July 2018 GUARANTEED PAY week and paid sick leave and vacation. "Creating better careers is a top goal for us," Cooper noted at the time. However, strict experience qualifica- tions for participating flatbed drivers have limited participation, says Furnell. Another limiter has been geography. The new fleet's hiring area was cen- tered in the triangle defined by Bowling Green, Kentucky; Birmingham, Alabama; and Charlotte, North Carolina. When Furnell spoke with Overdrive in early June, just one driver was a part of the Mission Fleet. Small fleet Eagle Express Inc. of Canton, Michigan, transitioned from a brokerage operation when it bought its first trucks in 2014. It immediately offered its employed drivers who were available five days of the week a $1,000 guarantee that fleet owner Leander Richmond says he's been thinking of boosting to $1,200. Its primary intention is to encourage five-day weekly avail- ability. Most drivers spend weekends at home, he says. Richmond believes the minimum also helps ensure stable income no mat- ter what happens on the road — for instance, a driver "sitting in a truck stop for three days" waiting on a load. "Never had that happen, but when we have to meet the weekly commitment … sometimes it motivates us to do things to keep drivers happier," whether taking loads to reposition a hauler toward bet- ter opportunities or deadheading drivers (at 43 cents per mile) home or to better freight areas. Eagle Express pays 50 cents per loaded mile. Richmond says it was challenging to meet the minimum weekly pay at first, but not so any longer. His drivers' aver- age pay is $1,213, he says, and $1,410 is the highest average for any one week. Regional OTR fleet Osborne Logistics, located in Fairfield, Ohio, has started offering its company driv- ers a flat pay scheme similar in level to Richmond's minimum — $210 per day they are available for work. The struc- ture has been in place for about two NO GUARANTEES FOR FLEETS TRYING GUARANTEED PAY Twenty percent of the small fleet respon- dents to Overdrive's recent compensation survey offered minimum guaranteed-pay packages to employed drivers. The rate is slightly higher than what drivers report in the same survey, where 17 percent said they receive a minimum guarantee. Small fleets are showing an eager- ness to experiment with guaranteed pay. Of those that have established such a program, 83 percent did so within the last five years, though 67 percent have done so within just the last two years. Still, it's not for everyone. Small fleet operator Mark White of Old Time Express, started by his owner-operator father, Bo, in Hartsville, Tennessee, considered guaranteed pay for the fleet of about 20 trucks. While it "sounds good in theory," White says, "there's just too much incen- tive to do less." Efforts to improve retention and the driver experience at the dry box hauler have centered instead on detention and benefits, among other things. As of about a year ago, White and company are picking up 100 percent of drivers' health insurance premiums, rather than the typical split on offer at companies around the nation. When White's company shifted to electronic logs several years ago, "I thought about switching to hourly-based pay," he says. "We kicked that around — it might be difficult unless we went to an hourly-based charge to our customers," something few carriers outside of local haulers are doing today. Smokey Point Distributing had similar worries about its move toward offering an annual guaranteed salary for company flatbed haulers. Comfort enough to make the move was achieved with an internal system for analysis, as well as incentives for miles and hazmat/overdimensional hauls the company allowed on top of the base salary. Developers built a way to analyze haulers involved in the company's test of its minimum-guarantee system, Smokey Point's Dan Wirkkala said in May. Productivity increased, contrary to "what's often expected" for non-piece- rate structures. Wirkkala acknowledges a trucking company might "get itself into trouble if they don't have the right tools in place and the ability to mea- sure" productivity metrics in near-real time. Osbourne Logistics, says Brant Osbourne, similarly tracks performance in its flat daily pay scheme. It's been rare that a driver underperforms, and when it pops up, it's typically just one of many reasons a driver isn't cut out for Osbourne Logistics, which has seen more drivers hit the one- and two-year anniversary with the company since it started the program. Drivers on Smokey Point's program "get paid on 9,900 miles a month regard- less of productivity," Wirkkala says. If drivers aren't hitting the mark "due to company performance … we eat that, a big risk that we take on our end." That also gives office personnel their own kind of incentive to perform. The current strong market makes it "a good time to implement this," he says. "The true test: How well do we do when things get tight and everybody's under- cutting each other?" Time will tell. Distribution of small fleets offering guaranteed minimums No guarantee 80% Minimum weekly guarantee 17% Minimum monthly guarantee 3% Among respondents, 76 percent owned one to five trucks, 10 percent owned six to 10, and 14 percent owned more than 10. Other insights from small-fleet owner-operator respondents to Overdrive's compensation survey: • A majority (56 percent) paid operators primarily based on a percentage of the load. 36 percent used a per-mile rate. • 56 percent had raised drivers' base rate of pay at least once within the last two years, 16 percent more than once. • Gross pay averaged less than or equal to $60,000 for drivers at 48 percent of the fleets. Source: Overdrive 2018 compensation survey