"The Road Home" Podcast

Episode 9: Are Major Carriers Nothing More Than Starter Companies?

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Episode 9: Are Major Carriers Nothing More Than Starter Companies?

It's common to hear drivers say you should start your career with one of the major companies but then move on as quickly as possible to better jobs with smaller companies. But is this really true? Are large carriers nothing more than starter companies? Are the best jobs found at smaller companies? We'll examine all different facets of life for a driver at a small company versus a large company, and we'll explore the economics of the industry to see if this notion of starter companies holds true.

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Transcript: Are Major Carriers Nothing More Than Starter Companies?

Hey folks, I'm Brett Aquila with TruckingTruth.com and welcome to another episode of our podcast 'The Road Home' where we help new drivers prepare for life on the road.

Today I want to talk about the major carriers that hire inexperienced drivers and whether or not they can be more than just a starter company.

For reasons no one can be quite sure of, there has been this long-held notion that major carriers are nothing more than 'starter companies'. Drivers from coast to coast will tell you to land your first job with a major carrier, stick around for a short time, and then take the first opportunity to land a better paying job at a smaller company where they'll know your name and they'll treat you better.

This myth has cemented into legend over the years and has been misleading rookie drivers and derailing careers for far too long. So lets take a deeper dive into the starter company myth and see if we can set the record straight.

Pay

So let's start out talking about money. Is the pay better at smaller carriers than at the larger ones? Well my question is, why would it be? Why would a small carrier be able to pay you more than a large carrier?

Every company out there is trying to grow their fleet and grow their profits, right? Well only a very tiny percentage, far fewer than 1% in fact, have managed themselves well enough over the years to get their fleets above one or two hundred trucks. In fact, about 93% of all trucking companies have fewer than 6 trucks, and about 97% of all trucking companies have fewer than 20 trucks.

So if these smaller companies were highly profitable they wouldn't be smaller companies anymore. They'd be large companies. In a commodity service like trucking, having scale allows you better pricing for fuel, tires, trucks, and many other expenses. So the larger carriers are getting significant discounts on items that smaller carriers are paying full price for.

Larger carriers, because of their resources, are also capable of handling a wider range of customers, giving them more options for seeking out a better profit.

So if the large carriers get bulk discounts on their expenses and they can handle a wider range of customers, how do you expect the smaller carriers to come up with the additional profits needed to pay their drivers better than the larger carriers can? Unfortunately for the smaller companies, the math just doesn't add up. You can not expect to make a larger profit than your competitors when you have higher costs and fewer revenue opportunities. And without higher profits you're not going to be able to pay higher salaries.

Home Time

Ok so let's talk about home time. Can a smaller carrier get you home more often than a large carrier? To be honest, the size of the company has nothing to do with home time. The freight lanes a company has will determine the home time they can offer to drivers in different areas.

Say, for instance, a company has steady freight going back and forth between Indianapolis and Chicago. This would make it very easy for the company to hire out of Chicago, out of Indianapolis, or anyplace in between because it's easy for them to get their drivers home with the freight they have. In fact, drivers for this company that live in these regions may even get home every day.

Now this same company might be able to hire someone out of Pittsburgh, PA but it's more difficult to get them home because they don't have a lot of freight going that way. So a driver for this company out of Pittsburgh might only get home one a week or even once a month because there simply isn't a lot of freight available to get them there.

So the size of the company has nothing to do with home time.

Better Equipment

Ok, so let's talk about equipment. Again, the big factor here is profit margin. Can a smaller carrier afford new equipment the way the larger carriers can? Most of the time, no, they can't. They simply don’t have the money behind them and can't get the same financing that’s available to large carriers.

Now sometimes you will see some small carrier with really nice equipment. But if you talk to the drivers you'll often find that the fancy, custom equipment they have is one of the best features about the company, and it's even worth it to them if they make a little less money because of it. And there's nothing wrong that. If you would love nothing more than to have a decked-out custom Pete you can surely find an owner operator or a small comapny out there that has one. But how are they going to afford to give you extra fancy equipment and pay you better than their larger competitors at the same time? If they had all this money floating around they wouldn't be a small carrier in the first place.

So you might find a small carrier that has really nice equipment, and maybe even some equipment that's really loaded to the max. But you have to ask yourself where they're getting the money for that expensive equipment if they're not taking it out of the driver's salary.

Better Treatment

Now the next item on the list is finding fair treatment and a family atmosphere. It's common to hear drivers say that they want a smaller company where everyone knows their name and they're more like a family. Well let's think about that for a minute. You're a truck driver. You're driving around all day, every day, by yourself. What difference does it make if your company has five trucks, or five thousand trucks? Driving around by yourself is still driving around by yourself. There are no 'family members' from your company with you.

And what about when you get back to the terminal? Is it better at a small company? Do you think there's going to be cookouts and parades and carnivals with rides all the time? I don't know what people picture when they're hoping for a company with a family atmosphere, but I've worked for several small companies and I can assure you I was treated no better than at a large carrier, and there were definitely no carnival rides. If you want a family atmosphere, buy a home and start a family.

Future Opportunities

Ok, so what about future opportunities? Say you get started with a large carrier and you run dry van for a while and you were getting home one a month. Maybe you decide you'd like to try flatbed or maybe you'd like to get home on the weekends instead. Then again, you've heard it's great being in a dedicated fleet where you're only driving for one customer, or a dedicated route where you go to the same places all the time.

Large carriers tend to have a huge assortment of different opportunities available, especially once you've put in a few months and you've proven yourself to be a safe, hard working, reliable professional. Large carriers will often haul more than one type of freight, they'll often have numerous home time options, and they always have some dedicated fleets that only run certain areas of the country or only haul for certain customers.

So it's easy at a large carrier to dip your toes in the water and try different types of trucking to see what suits you best. And the beauty of moving between divisions within a company, instead of starting over with a new company, is that you retain your great reputation and your hard earned seniority. When you change companies you start all over again at the bottom. You have to prove yourself to everyone, you have no seniority, and you're not going to be offered their best opportunities with their best customers until you've put in some time.

So it's often a big advantage to move around within a company than it is to change companies anytime you’re looking for a new opportunity.

Perks

So what about the little perks that come with working for a large carrier? See, the larger carriers have so many resources at their disposal that they can offer things you'll almost never find at small companies. For instance, a lot of large carriers have free healthcare hotlines you can call anytime to speak with medical personnel from the road. They also tend to offer things like recreational buildings at their terminals, travel discounts for you and your family, and national accounts for handling breakdowns, tires, and fuel.

I once worked for a small company that didn't have any sort of national accounts setup. Every time I needed the tank washed out, the truck repaired, fuel, or a hotel I had to pay cash for everything because my carrier couldn't get the financing available to be given large credit accounts. It was a frustrating, time consuming, and tedious process trying to get anything done.

When you work for a large carrier they have financing and national accounts to handle all of that for you. When you go to get fuel, get your truck washed, get repairs done, or get loaded at a customer the process is normally faster and easier because the bill is taken care of and you're often given precedence over drivers from smaller carriers because your carrier's account is so important to their business.

Now none of these little perks by themselves might be a game changer, but when you add them up you'll find the experience of working for a large carrier is often much nicer than at a smaller carrier where they simply don't have the money or the personnel to make life as easy on their drivers.

So as you can see the notion that you should start with a large carrier and quickly move on to a better job at a small carrier is completely false. The large carriers have more money behind them and more clout with their customers and with the companies that service their fleet than smaller carriers do.

Large carriers tend to offer fantastic pay and benefits, especially after you've put in a little time. They often have a variety of home time options, gigantic fleets of nearly brand new equipment, and a list of perks a mile long that make life easier on the drivers.

You can expect to be treated every bit as well at a major carrier as you will at a small carrier and down the road you'll have far more opportunities available to haul different types of freight or run different regions of the country.

So don't make the mistake of thinking that large carriers are just starter companies and that you're supposed to work your way up to better jobs with smaller carriers. This isn't true at all. If you're going to leave one company for another, make sure it's because the company you're leaving doesn't offer what you're looking for but another company does. A smaller carrier doesn't have the resources available that a large carrier has, so if you're going to make the move to a smaller carrier, make sure there's a very good reason for it.

You want to make sure you're with the right carrier, not just the right size carrier, so in the end when the work is done you can sit back, and relax, and enjoy the Road Home.

I'm Brett Aquila with TruckingTruth and we'll see you next time.

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