It's no secret that owner-operators are in high demand among fleets today, especially truckload carriers. But what isn't so evident are the rules of thumb fleets use to identify those owner-operators they think are the best. Here's a hint: they rarely dwell on the type of truck you drive.
"One of the items we put particular emphasis on is financial solvency," says Mike Norder, spokesman for Green Bay, WI-based Schneider National. "Financial stability is a big one: can they make the payments on their tractor with the pay they'll be getting from us?"
Another big factor is the operator's safety record, says Norder. That's an obvious indicator but one that, even in these times when drivers are scarce, a carrier cannot afford to overlook.
Next is the operator's prior leasing history, if any. Have they leased out to multiple carriers over the years or just to a few? "To us, that indicates stability in their business planning," Norder says. "If they are switching two or three times a year between carriers, that's an issue for us."
Norder emphasizes, however, that the total work experience of an owner-operator isn't as big a factor as many would think. "An employment candidate could have 15 years of experience as an owner-operator but switched between carriers a lot and had trouble making payments on their vehicle," he says. "Whereas a three-year independent might come in with a very stable business. So it's the nature of their business history rather than the total tally of years they've been in trucking that really matters."
Many fleets work hard to reduce driver turnover, as turnover represents a significant cost to their business. The American Trucking Assn. estimates that the average amount of turnover in the truckload sector hovers around 116%, which forces those fleet owners to spend time and money on continued driver recruiting efforts.
That's one reason why more and more fleets are focusing more intently on the initial hiring process, says Mitch Bookbinder, director of sales & recruitment for N.J.-based Louis J. Kennedy Trucking. That's why both company driver and owner-operator applicants are going to see more attention paid to their employment histories.
"The driver interview is the key to knowing if the driver you are hiring is going to fit the job you have to fill," says Bookbinder. "It's a two-way street: we have to level with them about what the job will require and they have to be honest with us about their driving and work history, job likes and dislikes, etc."
He adds that, with recruiting and retention now costing the industry upwards of $7,000 per driver, it's wise to be as forthright and blunt as possible during the interview. That's better than discovering a problem once the driver is in the cab and on the road.
"Let's say you have a 5% profit margin and your driver takes in $3,000 a week in revenue. They'll have to bring in $100,000 in revenue, some 30 weeks or eight months of work, to cover the cost of recruiting and retaining them," Bookbinder explains. "That's only one reason why screening driver applicants thoroughly is so much more important today."
As security becomes an ever-greater factor in the hiring process, many trucking companies are looking to perform more comprehensive "instant" background checks during the hiring process - using systems such as Securint, developed by information technology firm Seisint, Inc.
"The cost of a bad hire to any company can be expensive, but that's even more so in transportation, which is suffering from a truck driver shortage," explains Jim Swift, Securint's president, in an interview with DRIVERS. "The goal with our technology is to give employers a fast and easy way to screen potential employees, looking for any 'red flags' that could pose problems later on."
Swift says Securint's system checks traffic court records, motor vehicle histories, credit histories, and other data to first help determine if the information provided on the employment application is accurate, then to see if there are any financial, criminal, or driving history issues that might indicate problems down the road.
Securint offers its system via the Internet and charges on a per-use and service requirement basis. If an employer just wants to verify an applicant's identity, the cost is 50 cents per transaction. Adding criminal history and traffic violation checks bumps the cost up to $2 a transaction. A full screening - including sex offender registry search and credit check - costs $5 to $20 per applicant, with the ability to pull credit histories requiring a $100 set-up fee.
The key benefit Securint offers, says Swift,, is that much of the information - from motor vehicle records to criminal background searches - takes just seconds to acquire, while more detailed searches (including credit checks) only require one to three days.
"Speed is the key, because the transportation labor pool is very tight and there's a lot of 'churning' going on - as a result, most trucking companies need to make a hiring decision right away," notes Swift. "This technology can allow them to make decision with more and better information at hand."
Schneider's Norder emphasizes, however, that there are significant benefits for owner-operators that make the grade from a carrier's perspective - and it's not just about getting a sign-on bonus.
"First of all, we're indifferent to the communication technology they may be using because once they come on board with us, they'll be equipped with a Qualcomm system. That's how we communicate all of our work assignments, directions, etc.," he explains. "As part of that, they go through a paid orientation that helps them get integrated with how we do things, so there's no confusion on their part once they are put out on the road with a load."
For the independent, Norder says getting accepted by a carrier means the one big headache for their business is pretty much taken care of: stability of freight.
"No longer are they having to waste time searching for a load - they have a monthly tractor payment to make and bills to pay," he says. "So they get to retain that sense of freedom an independent has without the biggest burden-- finding freight."
The second-biggest benefit is ancillary business support. In Schneider's case, owner-operators get fuel surcharge revenue from the carrier once diesel fuel prices go above $1.21 per gallon - that helps mitigate the impact of high fuel process to a degree, Norder notes.
Schneider also offers owner-operators the opportunity to buy maintenance services and parts - such as tires - at a discount. "On average, owner-operators working for us save $10,000 a year per truck in terms of fuel, tire, and maintenance savings," Norder says. "That's a huge advantage when you are running your own business."