Towne turning truck drivers into contractors

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Towne Air Freight LLC plans to offer about 200 of its truck drivers the chance to own their own rigs as the South Bend trucking firm follows an industry trend of outsourcing to contractors.

At its Indianapolis terminal, 6430 Airway Drive near Indianapolis International Airport, about 35 drivers will receive the offer, said Jerry Scott, vice president of human resources.

The Indianapolis drivers will be eligible to take over routes that primarily link the airport to nearby cities, including Kokomo and Terre Haute. Indianapolis, one of Towne’s largest terminals, will be among the last to become eligible because the company plans to start with its smallest terminals. The offer will be made this summer.

Towne wants to free capital tied up in trucks to compete with other carriers, many of whom already have made the change, Scott said.

“We can use the capital for offense rather than carrying the assets,” Scott said.

Towne specializes in ground transportation legs of air shipments. A few of its trucks shuttle freight among docks within airport terminals, but most pick up air cargo and deliver to customers.

The company has 45 locations in 20 states, primarily in the Midwest. It has 250 trucks, and 400 company drivers and 300 independent contractors. About 270 of its 1,100 employees operate from its South Bend headquarters and terminal.

The company is owned by Charterhouse Group, a private-equity firm headquartered in New York.

Other trucking firms offering contractor relationships to their drivers have seen 20 percent to 40 percent accept, Scott said. Towne will look to attract new contractors to fill the balance.

Towne drivers, who now average $40,000 to $45,000 a year in wages, stand to make $45,000 to $60,000 a year by owning trucks, he said. With no down payment, drivers can pay $1,200 a month over 36 months and take advantage of centralized accounting and other business functions.

“It’s truly a pay-for-performance system,” Scott said. “They get paid for their productivity.”

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