The trucking business in the United States is a competitive market that generates over $ 700 billion a year. Stable growth in supply creates a stable growth in demand for transportation, which helps more than 200 companies to open every day across the country. More than 7 million people in the United States work in the trucking industry, including drivers and office clerks. Every year these numbers grow, opening doors for new and new employees. Unfortunately, most companies that have started their business “from scratch” suffer from a lack of financial resources for unpredictable expenses.
Most of the trucking companies receive payment for shipping in 28-30 business days, which causes inconvenience and temporary inability to pay employees in certain situations. On the other hand, there are banks that give companies a temporary loan in the amount of load’s payment. However, companies that started working “from scratch” do not have a credit history and at first will be forced to transport cargo only for small shippers and brokers, or pay a large percentage for the express transportation payment.
Unfortunately, some companies choose the wrong way to temporarily improve their financial side by delaying employees’ salaries or not paying them in full.
First of all, drivers suffer. In companies that rarely engage in dedicated transportation or are not a direct supplier to a shipper, most often the driver is not getting a rate confirmation containing the cost of transportation and cargo details. The driver agrees on $1000, while the actual price may be much higher.
1) Even if you trust your dispatcher, you have a right to request Rate Confirmation from them. Do not accept the load if the company refuses to send the document, citing company policy or other reasons.
Always carefully read everything that is written on the invoice. There are cases when a company adds its own terms to the final document, which turns out to be a Federal Crime. The most common type of fraud is the correction of existing data (numbers, words) in the invoice using third-party file editors (Photoshop).
2) After receiving the Rate Confirmation, carefully read all the labels and numbers. The most common way to notice corrections is that they won’t match the color, font, and/or style. The same numbers may look different in different parts of the document. If you suspect that, ask the company to forward an email from the broker (or shipper) to your email address. After receiving the email, make sure that the broker’s E-mail address is in the senders field. It is not possible to fake the sender’s e-mail address.
If the company refuses to forward the document, you have a right to refuse transportation. You can also report fraud to a lawyer, or contact the 24-Hour Non-Emergency Service (311).
Considering payment issues, pay attention to the way drivers’ earnings are calculated. Many companies indicate earnings as a percentage in their ads. Most often, this is a percentage in the range of 80% – 95% for Owner/Operators and 25-35% for Company Drivers from transportation cost.
3) The higher the percentage of gross paid by the company – the more transparent its financial side. Be sure to ask the company how they calculate costs. Under the pretext of simplified calculation, the company may include some expenses in the deductible percentage, thereby earning dishonestly.
For example, company A pays $50 per driver for logbook services. Firstly, the driver receives payment in the form of 90% of the gross, then the company deducts $50 from the paid amount. Company B, on the other hand, simply pays you 85%. In the first case, the cost is fixed. In the second case, it varies depending on the gross. If the amount of transportation is $3000, in Company A you will earn $2650, while in Company B you will get only $2550.
4) Create your own legal entity and register your truck. The fact is that if you register it for a company, any violation of will be counted toward the company’s DOT Record. For many companies, this is a great opportunity to charge you for the worsening of the DOT score.
Registration fee is around $2000. Honest companies offer this money in instalments. In long-term your own legal entity divides the responsibility between you and the company. In the future, it will reduce the amount of time you spend calculating costs and taxes.
5) If the company pays for fuel, ask them to give you a Fuel Card.
There were cases when faced a discrepancy between the paid annual amount and the numbers in 1099-misc. For example, the amount paid was $50,000, while 1099 from the company stated there was $80,000. The company wrote off all fuel as its own expense, so the driver owes an additional amount in tax.