commercial-truck-insurance-services

Truck Drivers & Owner Operators Should Get Paid Faster

Trucking is very hard work. Truck drivers and Owner Operators are very hard working people. Hard working people want to and should get paid well for it. Unfortunately, their pay structure can be very difficult to understand.

There are many types of pay structures including Pay Per Hour, Pay based on mileage, revenue sharing, along with time to deliver bonuses, safety bonuses, fuel allowances, as well as insurance reimbursements. All of these make it very difficult for a truck driver or Owner Operator to manage and get it right.

Owner-operators, who own and operate their own truck, make between $100,000 and $300,000 per year gross. However, Owner Operators’ expenses can run very high, as much as 70 – 80% of the income going out to expenses with fuel and insurance being at the top of the expense list.

Driver / Owner Operator Payments

Because of the number of organizations involved in the payment process there is often a lot of confusion by the time the Driver or Owner Operator gets his / her net pay.

Quite often, there is the shipper (owner of the goods), then a logistics provider, then a load broker (either online or offline), sometimes even sub-brokered with another load broker, then the driver or Owner Operator gets paid. With so many hands in the payment process it can become very confusing and will often short change the driver or Owner Operator.

A truck driver or Owner Operator can use technology to help manage the payment process. There are many apps, spreadsheets, and software programs available that can help in managing the payment process.

Factoring Invoices MAY Be a Good Option, or MAY NOT!

Factoring is the process of assigning your freight invoices to a factoring company for a cash advance on the invoice versus waiting for the load to pay out. While on the surface this appears to be a good idea, it is important to remember that Factoring Companies will not issue 100% of the invoice, and may charge service fees in the factoring process.

Factoring can benefit Owner Operators by helping manage cash flow, however this will come with a price of reduced payout, and servicing fees. The benefit is the load invoices will be paid out almost immediately, this can be very helpful in managing cash flow.

Another option to Factoring is simply to ask the shipper, logistics provider or load broker for an immediate advance on the load invoice. Many shippers, logistics providers, and load brokers would rather issue an invoice advance versus dealing with a factoring company.

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