November 9, 2015

Werner's owner-operators get their largest pay increase in company history

Hike equal to $10,000 annual pay raise.

By DC Velocity Staff

Trucking and logistics provider Werner Enterprises Inc. said it has implemented the largest per-mile pay increase for a portion of its owner-operator driver workforce in the company's 59-year history.

The increase, which took effect last Tuesday, will apply to Werner's dry-van independent drivers with 48-state operating authority, the company said. Those drivers account for about one-third of Werner's owner-operators, the company said. At the end of the third quarter, Werner had 705 owner-operator tractors in its truckload fleet of 7,415 tractors.

The increase will be equal to a $10,000-per-year pay hike for the drivers, according to Omaha-based Werner, which generates the bulk of its revenue from truckload services. It is unclear what the typical owner-operator driving for Werner makes each year, and company officials were unavailable to comment on the announcement, which was made late on Friday afternoon.

The company also said it is offering offer owner-operators more opportunities in the "dedicated contract carriage" segment, where a shipper pays a fleet to dedicate rigs, trailers, and drivers for that customer's sole use. The standard contract runs three to five years and requires the customer to compensate the provider for an agreed-upon number of miles driven on a round-trip basis. In the third quarter, Werner's "specialized services" unit, which consists mostly of dedicated operations, accounted for about half of the trucks in its truckload segment, according to data in its third-quarter results.

Dedicated services have increased in demand as big shippers that have the volume to afford committing to round-trip payments seek to lock in capacity amidst a tightening market for drivers. Drivers like it because it means regular hauling opportunities.

Owner-operators that operate on regional routes will see "significant" pay increases, Werner said. In addition, the company will offer an interest rate of 7.99 percent to drivers to finance purchases of rigs that will not log many miles, it said.

In a statement, Werner said it is working to attract and retain qualified drivers amid the "largest driver shortage in recent history."

At Werner, which is one of the nation's top five truckload carriers, owner-operators effectively drive for no one else. At many of the bigger carriers, drivers sign multiyear contracts that give the carrier dependable labor without the training and recruitment costs, and the driver a reliable source of freight at steadily rising compensation. The key, as it has been throughout the trucking industry, is finding qualified drivers.

"A good owner/operator is more valuable than a company-owned truck and company employee at any truck line," said Charles W. Clowdis Jr., managing director, global transportation, at consultancy IHS Economics. "A really dependable owner-operator may be worth two company trucks and drivers."

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