Cutting Owner-Operator Rates
Last month, I received a video from a follower on Instagram of 2 owner operators scolding the owner of a trucking company in Chicago after they found out their rates have been getting cut. As most of us know, owner-operators typically pay a percentage of their rates to the carrier they drive for to have their MC & insurance. Usually, these fees range between 10 and 20 percent of the load. However, trucking companies – predominantly from Chicago and predominantly of Eastern European descent, have been cutting these rates significantly. For example, they will tell the owner-operator that the load pays $3000, but it actually pays $3500. Then the owner-operator still has to pay fees to the trucking company and ends up with around $2500.
Before these past couple of weeks, I wasn’t aware of how widespread this behavior was in the trucking communities. I received another message – this time on LinkedIn – from a former employee of a large trucking company in Chicago. He wrote to me about all his former employer’s unethical tactics to make obscene amounts of cash off of owner-operators. After talking to him, I reshared a story on Instagram about how I have learned recently about these companies in Chicago ripping off their owner-operators. I got bombarded with people messaging and have learned a lot since.
Here are some of the things I have learned:
1. It is not just in Chicago & not only Eastern European carriers, but it is much more common in this circle.
2. Many dispatchers justified their behavior. They said it doesn’t matter how much they cut, as long as the owner-operator is happy with the rate.
3. Cutting rates is how trucking company owners & dispatchers “can afford their S-classes and Series 7 cars.”
4. Trucking companies offer cheap leases to owner-operators to entice them to come on board and become “owner-operators.”
Here is a quote from a follower: “they offer them 2023 Cascadia for $135,000, while a brand new one is $175,000, knowing they’ll make five times that on stolen rates.”
Another follower wrote this about a large trucking company in Chicago: “My big mistake was purchasing my first truck from them. I worked my ass off to pay off that truck. Right after I paid off my truck and quit, they changed their policy for owner-operators: no early payoff. So if you want an early payoff, there will be a 15k penalty. They book a load for you and force you to take that load; otherwise, they will make you regret refusing to take a load.”
I recorded this video to talk more in-depth about the subject and the shadiness of the industry. I would love to create some dialogue and a conversation about the topic. Please comment and share.