Talking to Owner Operators and small fleet owners, I asked the question. What is the most important issue to you in trucking now? The answers were mixed between “Factoring” and truck driver retention. Small fleet owners are worried about keeping the good drivers they have. It cost between recruiting and the process that one goes through as a new hire, the company spends thousands a year. They are getting creative when it comes to keeping good drivers. One said he has a driver living in another state that works their normal routes for several weeks then he gets a load going home. The driver lets him know several weeks in advance of when he wants to be home. They guy is single so it is not very often. If an emergency comes up they work together to get him home. Even as far as allowing the driver to borrow the boss’s personal vehicle to get there. Paid him a small amount for the drive even though it was in his POV (Personal Own Vehicle). Good company owners who want to keep good drivers will do many things to keep them, if not then they lose that driver. Losing a quality affects the bottom line and as many are finding out this can affect the other drivers in a small company also. Drivers in a small company specially when you only have 20 drivers or so, they talk. They talk to one another when things are good and especially when things are bad. Drivers talk can be a motivation killer in a company. That’s why companies are doing more and more to make sure their drivers are happy. There is a balance between happy driver and happy customer. Drivers are finally getting retention pay, for sitting at shippers and receivers to long. It’s used to be a real problem with several receivers in the US. There were and still are some that don’t even want you to ask till after 4 hours of waiting. 4 hours past your appointment time is when you can ask if your trailer is empty yet. They are the ones that have had issues like this for years, and they are the ones that if a driver sees the load is going there, then they want to refuse and get a different one. That’s why companies started paying them for sitting long periods of time. I will say that companies are doing more than ever to keep drivers, if they don’t then they are making less money.
The other issue that was a very big topic, factoring. Years ago no one heard of this, then some smart business people realized they can make money off, the drivers rush to get paid. Now I know there are the times when money is needed quick. The single truck owner operator who just got his new truck, and he does not have much cash to run his business. In this case I understand that quick payment is needed. It is good to have this but it cost.
Some owner operators telling me that they pay between 4.5% to almost 6% of the invoice. As I said to them, over a years’ time you can lose a lot of your money that way. Companies like Comdata and EFS, who provide fuel cards and many other services like log book auditing and fuel tax fillings and factoring. I can see paying someone like that to handle my business as they do things I cannot do. One owner operator telling me he only is charged 3% for factoring, but never gave me the name of the company he uses. Love’s Financial seems to be very popular with a fee of only 4.99%. Many of the owner operators I spoke with use them they also have fuel cards and discounts on fuel and other services they offer. Other companies do advertise lower prices but that’s for companies with more than one truck. If you only have one truck then they all seem to be at or around that 5%. Not all are the same, check them out and always check with the Better Business Bureau, and US Chamber of Commerce. Get credit checks on them if you can, or if you have questions.
I know years ago we never had this, and it does seem to be a service that can help a company especially when first starting up. I know some freight brokers do a fast pay on the loads you haul for them. Again look at the fees that any company charges you, make sure to read the fine lines of any contract you are required to sign and try to find a company that does not require a long term contract. If you can find one that takes care of more than one thing for you. They do the factoring and fuel cards and discount fuel, file IFTA taxes and reports and the little things that can trip up a small company. Sometimes it’s worth paying someone to have your back. Just back sure the cost is more than you feel it is worth. Talk to them and maybe you can get a lower rate after being with them for a length of time.