Picking a Fleet

Last week I came back from a short lunch break to find an upset husband and his crying wife in my office. After a couple of minutes I discovered the problem. The husband applied to join our fleet as an owner operator. He qualified and went through the training and was ready to roll, however, his old company would not release his truck. As a tractor simply cannot be registered to two fleets at the same time they were stuck. The husband was upset because he did not understand that we could not register his truck until the old fleet released him, and the wife was upset because she understood that they were losing money everyday the truck sat. They had been sitting for 3 weeks with no end in site.

This guy, like most owner operators don’t realize that when they contract to a fleet, that fleet becomes the registered owner of the truck (for pro-rate purposes) and can effectively stop them from transferring their truck to some other fleet. Keeping a truck on the fleet when the owner has expressed a wish to leave is a cruel and unfathomable practice that should not be used except in the most unusual cases, but it does happen if the owner operator is not aware and protected. In this case there was not even a written contract between the truck owner and the fleet and so the owner operator was completely unprotected. I could not help but wonder how the truck owner willingly got into such a difficult position. I guess he just did not know what he was risking.

I called the owner of the fleet in question, and of course he had a long story about how the operator was no good, had damaged his equipment, and owed him money and on and on. Finally, I cut in and explained that the operator was free to work for whomever he chose that he could not earn any money unless his truck went to work somewhere, and that the place to deal with these types of disagreements is in court. I suggested that he do (what most responsible fleets do) hold back some funds and release the truck, then they would still be in a powerful position but the owner operator would, at least, be able to earn income. It shortly became clear that the old fleet owner really just wanted to make leaving his fleet so difficult that the owner operator would stay.

We worked out a deal by helping the old fleet with the administration of a minor accident and the truck was released and registered to our fleet.

Right after they left my office I got a call from another owner operator looking to place his truck on our fleet and the first question he asked was “How much do you pay a mile?” This was really the only question he had. That made me think. What should an owner operator look for when he chooses a company to work for? How can he minimize the risk of changing fleets?

With the shortage of drivers and owner operators in the market today it is worth your while to shop around for a good place to contract your truck and apply your skills. To paraphrase Ben Franklin, be wiser when choosing a fleet to contract with and then you can go to bed happier and wealthier anytime.

Look at the company’s reputation

Let’s look around a little first. Look at the trucks already on the prospective company’s fleet. Are they newer or older, clean or dirty? Are they well marked and easily identifiable or do they look temporary, or as if they have something to hide? Remember that no company has ever survived long with the business plan of using dirty old trucks to do cheap work. Successful companies want to be identified and take responsibility for their actions so they can get rewarded accordingly and their reputations can grow.

Speak to other drivers. People you know will know someone that works there or has worked there. Or say “Hi” to a driver if he is picking up or dropping off in the same yard as you. Listen to all comments, good or bad, but remember to ask why and consider the reply. I have had some drivers tell me they think a dispatcher is great and always fair and some drivers quit because they hated dealing with the very same person. If they don’t like the dispatcher, go ahead and ask for an example or story of what happened so you can decide yourself if it was all the dispatchers fault.

Remember to consider the clients of the company. If you keep seeing them at the docks of reputable companies, that is good. It means the revenue stream is good and the reputable company has already done some of your work as they evaluated the fleet and have decided to establish a trust relationship with it.

How long have they been in business? You know that trucking is a difficult business. Be wary of trucking companies less than 5 years old. It takes time, one small success after another to become stable in this industry.

Is their office in a house or farm or do they have a proper industrial building with dock access. Branches with local sales presence in the markets they serve is also important if you want to make sure your truck is busy and that that you will have some backup with problems on the road.

Don’t let any one of these factors or even any one truck or one driver colour your impressions either good or bad of an entire company. Try to get an overall impression of the company and try to determine if the business seems to be growing or declining. Above all you want a growing fleet, but not one that is growing too fast. Consider all of these things before you get serious about considering a fleet to join.

Look at the company’s safety record

Now it is time to get serious about the companies that looked interesting after you investigated their reputation. You want to work for a fleet that meets or beats the average national compliance rates. This will mean fewer “call ins” and inspections at scales. It will mean the company cares about you and operates in a safe manner.

Remember no one ever built a successful trucking company with a plan to run poorly maintained equipment and break as many laws as possible. Good companies plan to maintain equipment and plan to comply with laws like speed limits and log books. They organize their business around these safe operating practices.

In a perfect world, you could go to the company and when they ask for your abstract, you would ask them for theirs. While the USA is a long way from a perfect world, if that company runs into the states, you can do just that. In fact anyone with a computer can. Just go to www.safersys.org. Click on “company snapshot”. From this screen you can look up any company by name. Once you have the company up, take a look at inspections. Here is an example of inspections:

Inspection results for 24 months prior to: 07/12/2006

Total inspections: 318

Note: Total inspections may be less than the sum of vehicle, driver, and hazmat inspections. Go to Inspections Help for further information. Inspections:

Inspection

Type Vehicle Driver Hazmat

Inspections 194 316 2

Out of Service 29 9 0

Out of Service % 14.9% 2.8% 0%

Nat’l Average %(2003) 22.92% 6.78% 5.26%

An “out of service” violation is a defect that the government deems so unsafe that the vehicle is taken off the road until the repair is made. Look at the “vehicle” column.

For the example above, when trucks on this fleet were inspected at scales, they had out of service violations almost 15% of the time. The national average however is much higher, almost 23%, and so safety is a real priority at this fleet.

Next, look at the “driver” column. Most driver violations are log book related. In this case the US government provided record “shows” that this company has an out of service rate of half of the national average. You can be sure that driver safety is a real priority at this fleet.

There is a truckload of specific company information available on this web site. This is just a small part. A word of warning: Although these are official government numbers, be careful. Remember it is only showing you the information about the activities that happened in the USA. I can’t wait until Canada catches up and has a similar site. My contacts tell me that a similar Canadian site is in the works but is still at least 2 years away.

Take a look at the contract

So now you have a short list of companies that you may want to work for. Now it is time to get a look at the contract. How much someone pays is only important in relation to what expenses they deduct from the owner operator. For example fleet ‘A” pays $1.00 per mile and will also pay for insurance and prorate fees. Fleet “B” pays $1.05 per mile but charges you for insurance and prorate fees. If insurance & prorate are $1000 per month and you average 10,000 miles per month, your insurance and prorate is costing ten cents per mile. Although company “B” pays a nickel more per mile the owner operator actually loses a nickel a mile working for them.

Here are some main points to look for in a contract.

Is the contract in writing? If it isn’t, leave.
How is the mileage distance calculated? Make sure you understand if the company pays hub miles, shortest miles, or practical miles. What is the name of the mileage source? Check that a reputable program is used to calculate the mileage. Be careful of companies that may pay more per mile to look good but base the pay on shortest miles so you get the same or even less money per actual mile. Remember to ask about empty miles?
Can you understand from the contract what costs belong to the truck and what costs belong to the company? For example, who pays tolls, who pays the prorate fees and who pays insurance?
Take a good look at the insurance deductible. Look at minimums and maximums. Are you going to be severely penalized for a minor collision? In the event of a catastrophic rollover, will you be able to afford the deductibles and withstand the loss of work for 3 months while your truck is being repaired?
Is a dispute mechanism spelled out? For example, are costs recovered or penalties applied if a driver refuses a trip or fails to make a minimum mileage? Often costs are charged to drivers that fail to make minimum mileage even when they take a holiday or their truck breaks down.
Does the contract say how to end it? How much notice is required? What cost does the company pass on to the driver for ending the contract early. When a company prepays expenses (like prorate or insurance) it will often specify a minimum term for the contract (usually around 8 months). If you quit before the term is up, the expenses will be deducted from your account.
How does the fuel surcharge or fuel subsidy work? How is it adjusted? Look for a program that is indexed and will automatically adjust the level of pay to the changing cost of fuel. No one wants to have to ask for a raise every time fuel prices go up.
Lastly look for a mechanism that shows you can leave with your truck and not get trapped like the couple in the story at the beginning of this article. The most common mechanism is a holdback. The company releases you and your truck but holds part of your pay for a specified period of time.

This could be $3,000 to $5,000 for three months. At the end of the three months they either pay you your money or prove why not. If they keep any of your holdback, it can only be as specified in the contract and you can seek a remedy in small claims court.

Hopefully this will give you an overview of what to look for if you are interested in finding a good fleet to contract with.

Next issue we will focus more on drivers and look at some of the many types of driving jobs available so drivers can find the type of work that best suits their needs.