Forward Air announced Thursday its biggest pay hike for independent contractors hauling freight in the company’s less-than-truckload and truckload units. Per-mile pay was raised 15 cents for independent contractor fleet partners. The pay increase also includes its independent contractor teams and solo drivers.
The pay increase is the third of the year for the asset-light trucking provider and its sixth in the last five years. In June, Forward (NASDAQ: FWRD) raised pay as high as 25 cents per mile for teams and 12.5 cents per mile for solo drivers carrying loads into congested markets. That followed an 11-cent bump for team owner-operators, 5 cents for solo drivers, in March.
“We believe this rate increase will allow us to secure freight capacity by retaining our existing fleet and attracting new independent contractors and fleet owners to become business partners with the Forward team,” Tom Schmitt, chairman, president and CEO, stated in a press release.
The cumulative pay adjustments have increased independent contractor compensation by 43% for teams, 25% for solo operators, since 2016.
Forward is still offering a sign-on bonus for drivers transitioning to owner-operators “to help drive first-year profitability.” A $10,000 bonus will be paid for each team truck added to Forward’s fleet with solo trucks seeing a $4,000 payout.
A schedule of pay rates shows independent contractors can earn more than $497,250 annually in a team setting and over $203,500 in a solo setup. The current increase alone moves contractor earnings 10% higher year-over-year for teams and 13% higher for solo drivers. The percentage increases do not include the incremental comp awarded for hauling into congested areas.
The company’s independent contractor program offers expedited shipments in lanes running from one Forward LTL facility to another, including drop-and-hook loads. Shipments in dedicated lanes as well as open-board loads are also available.
Forward has been working to replace lower-margined freight in its LTL network with heavier, higher-dollar shipments. In addition to being accretive to margins, moving fewer, large shipments will unclog its network and increase overall capacity availability.
“Our business continues to experience record volume growth. We remain focused on our commitment to delivering our customers’ freight with precision execution,” Schmitt added.
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