Isn't there a better way??

I have been driving straight truck regionally (WA, OR, ID) for the past 2 years (was in sales for 17 years). Therefore, I might not know what I am talking about. However, after reading the forums and "dipping my toe" into truck driving, I have to think that there is a better way. With the amount of turnover in the business, something should change. Here's my idea. Is it feasible? I would be interested in hearing what people think. I know this is short on details, but that could be left up to a real "businessperson".

A true "driver owned" trucking company-

I would imagine that the biggest obstacle would be purchasing the equipment. To do this, each "Partner" (driver) would have a one time "buy in" into the company. I would imagine that there would be several sources where someone could get a small business loan. Probably even gov't programs for something like this. Once you "buy in" you would have 1 share. You would be a true business owner, therefore, you would be responsible for your own health care, taxes, retirement, etc.. Every partner would have 1 vote on everything (type of equipment, business practices, requirements of Partners, etc.).

I am sure there is someone out there who really knows the trucking industry inside and out that could be hired by the Partners as a CEO to run the business. His job would be to make the Partners as much money as possible as opposed to outside investors or trucking company owners. Partners would earn a wage based on miles/stops/etc.. But at the end of each quarter/semi-annually/annually would receive their share of the profits from the company based on how much they worked. Improving working conditions would also be a top priority. If Partners are willing to slip seat, it would mean more home time and less costs as far as equipment. I think that Partners would work a 7/4 or even 7/7 schedule. If done right, if a Partner where to drive 85,000 miles per year with an "average" amount of stops, I think (????) they could earn $70,000+ per year as a Partner. This is similar to what FedEx Ground does with their "Partners". However, their "Partners" are only paid on miles/stops/etc., but do not get to share in the profits of the company.

With the right people as Partners (operating and thinking as owners, not company drivers), I think this idea has unlimited upside. It could expand into different "fleets" and types of transportation. Yes, all the way down to the little box truck driver and directly compete with FedEx and UPS. Customer service would be superior since every driver would be personally invested into the company. By cutting out "The Man", transport costs would certainly be "competitive" with other other trucking companies. Better service for customers at a competitive price. Should be an easy sell??

I could keep on rambling about this idea, but will stop here. Tell me where I am wrong/right? Would like to hear your input.

 

Fuel would be an expense. As well as office space, employees (salespeople, dispatchers, etc), maintenance, etc.. The same as any other business. Partners would split the profit equally (based on how much work they did) after expenses. Just as business owners and investors are paid after expenses. How much do you think the trucking companies are making off of their drivers right now. Instead of them receiving the fruits of your labor, you would.

 

Of course the Partners (drivers) would determine what the hiring criteria would be, and any employees would technically work for the Partners. Although an individual Partner should not have the sole authority to hire/fire certain individuals, whoever is doing the hiring/firing would answer to the Partners. I have been around several businesses in my adult life. I have never seen an industry that is so completely dependent upon only one segment of their employees (truck drivers), yet treat them as 2nd and even 3rd class citizens. This is why there should be a truck drivers co-op. See the definition below.

"A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise" (International Cooperative Alliance, "Statement of Cooperative Identity", September 1995).
Cooperatives keep economic benefits within the community. Profit is not siphoned off by outside interests. The co-op's members are its owners.

 

The difference between what I am proposing is quite a bit different from what FedEx does. FedEx pays their contractors a "fee" for their services. The contractors do not get any part of FedEx's profits as a company. Also, FedEx tries to keep the "fees" that they pay to their contractors as low as possible so that the company profits are higher. I can tell you from experience, there is a competing factor with FedEx and their contractors. And yes, the contractors do get screwed over from time to time. I could give examples but will keep this short.

 

I do not know what the margins are. This is why I am asking for input. It might not be the right time now to do something like this due to the economy, but things will eventually turn around. Of course, there would be rules for the partners. You would have to be able to depend on one another to show up and do the work so that trucks are not sitting and not making the business/co-op money. You wouldn't want to bring on just anyone to be a Partner. Criteria would determine who would be a Partner. Probably based on background checks (criminal, driving, credit, etc.). Partners would have to think in terms of being an owner and not a company driver. Purchasing economical trucks instead of the "cool looking" fuel guzzlers. Being responsible on fuel consumption, slip-seating to insure that the company is more profitable. Good customer service to retain customers as well as build a client base, etc., etc., etc.. Hiring the right person to run the business/co-op would be critical. The CEO would technically work for the drivers, but run the company/co-op. He/she would be paid based on the profitability of the company. If he/she is making money, then the partners would be as well. Technically, the CEO would work for the drivers, but have control of the company/co-op. I know that sounds strange, but I think it would work.