Whether you're working with first-time lease-purchase independent contractors, or small fleets with their own operating authority, having the right tools in place will make sure your program starts and stays successful.
Oftentimes, you hear horror stories about predatory lease-purchase programs or carriers taking advantage of independent contractors (ICs). Throughout our 23 years in business, we’ve found that the most successful carriers with the lowest IC turnover, are the ones that truly set their contractors up for success. Make money from them hauling freight, not from nickel and diming them to death with fees!
Communication is the key to success in any business setting.
This starts before the prospective contractor is even in the picture with recruiting. Giving false information to get folks in the door is a recipe for disaster. Expectations of miles, take-home pay, and benefits, need to be clearly defined. Any embellishment will quickly be turned into a negative thought, which means everything they’ve been told is now met with skepticism.
The next step is having the exact same message in orientation. Orientation is the first live look at the carrier and how things operate. Orientation must be well organized, clean, and to the point. A communication network for support must be very clearly defined and driven into the IC’s mind so that they understand it is there! We also often hear about monthly or quarterly IC calls where folks can express concerns or frustrations to office staff. Sometimes a cure to woes is just having someone listen to the IC’s issues.
#2 Successful Partnerships
One of the hardest things about IC success is making sure you don’t cross the IC vs employee line. That is where 3rd party vendors and partners can make all the difference!
At ATBS, we save contractors time, stress, and money while letting them do what they do best… deliver freight safely! Most ICs aren’t the best business people, that's why we give them:
A dedicated Business Consultant for unlimited advice and help
A budget that helps them understand daily fixed costs, tax-saving advice, and a break-even point for business and personal expenses
Monthly interactive P&Ls to help make informed decisions
Quarterly Tax Estimates
Tax Preparation and Filing
An app to submit receipts
Secure Online Portal
You can also look into insurance and retirement partnerships. Benefits are more important than ever right now. With rising healthcare costs and increased cost of living, ICs need to know they have the options to make an investment in retirement and their health.
#3 Safety Incentives
Safety is a huge cause for turnover, that is often overlooked. Don’t lose the good capacity to unwarranted safety incidents.
We often hear of programs that incentivize with safety bonuses. The common ones you hear are paid based on certain intervals without any incidents (Eg. 50k miles, 100k miles, etc). You also hear about safety bonuses based on low percentages of time speeding.
Another safety incentive that is being elevated recently is one based on onboard cameras. There have been countless nuclear verdicts in recent years, and onboard cameras can be a huge tool to help in a lot of cases!
#4 Pay Full Fuel Surcharge
This one is a HUGE topic for ICs. This goes back to the idea that you need to make money off of freight, not from the ICs themselves! We all know our IC’s talk, and one of the most common things they discuss is a carrier, and how they pass on costs and revenue. Not paying 100% of the fuel surcharge has become extremely toxic and ICs will avoid fleets not paying the full amount based on that idea alone.
The #1 reason a truck driver takes the next step to become self-employed is FREEDOM. They make this step so that they can control their own destiny, and have the opportunity to make more money. It’s that simple.
It seems obvious, but that means you need to give them the chance to have a profit or loss. This means no forced dispatch. No IC wants to be told this is what they have to do. They need load choices, a load board if you can support it, or just the ability to say no.
Fleets that do have the ability, should consider a load board for freight choice. This has become significantly more popular over the last few years and continues to expand in this booming freight market. As a fleet, you need the company driver capacity to cover lanes that the ICs tend to not run, so this isn’t for everyone.
Lastly, the ability to have riders and pets seems to be a make-or-break for a good portion of the ICs. If you say no to riders and pets, you’re eliminating a big part of your recruitment pool!
#6 Discount Networks
It feels like we are beating a dead horse, but passing on your fleet discounts to your ICs is a no-brainer! Make money off of freight, not your ICs!
Fuel - Your ICs biggest cost. Make sure you pay the full fuel surcharge and you pass on the same discounts your company drivers get! A profitable IC lowers your turnover and runs your freight. Both of those are very important!
Maintenance - Your IC's 3rd biggest cost. Make sure they are aware of your network and how to utilize it. Like the driver shortage, there is a maintenance tech shortage and labor rates continue to go through the roof. Use your purchasing power and leverage to help maintain your fleet! This goes for tires as well!
#7 Create a Driver Career Path
You don’t hear of this as often as you’d think. Some folks come into the industry looking for a clear career path to help better their lives, lower their stress, and keep making more money.
Trainee - Not every fleet has this ability, but utilizing the communication idea with a career path from day 1 can help you develop ICs that know your company, your system, and how to be successful.
Company Driver - If you couldn’t start as a trainee, start here for developing your IC program. Make it an option as a clear career path opportunity. This should be part of your recruiting pitch and known throughout the organization. Some fleets even require new hires to pull company freight for 3-6 months before they become an IC. This allows both the carrier and the driver to have an extended job interview to make sure all parties are the correct fit.
Lease-Purchase - This isn’t for every carrier, but this is often the stepping stone from being a company driver to being an IC. This can be operated in-house, but there are numerous companies that supply trucks for an LP program. The best LP programs make sure the IC has some sort of down payment to have some skin in the game. They also utilize companies, like ATBS, to make sure these first-time business owners get the help they need from day one.
Hired Gun - This is a true IC with their own asset who is driving under your authority. Sometimes it’s from paying off their LP truck, sometimes it’s from saving up for a down payment at an outside vendor. Have a network in place where you can refer them to in order to make that purchase!
*Please note that any of these changes should be evaluated by a legal team.
These are just a few of the things we see from carriers with successful IC programs. If you have any questions or would like to discuss any of these topics in more detail, please feel free to reach out to us.