Forward Air Announces Largest Ever Rate Increase for Independent Contractor Drivers

Rhea-AI Summary

Forward Air Corporation (NASDAQ: FWRD) announces its largest rate-per-mile increase for its independent contractor fleet, implementing a 15 cent increase. This historic adjustment boosts earning potential for independent contractors, with forecasts suggesting team drivers could earn over $497,250 annually and solo contractors over $203,500. This represents a 25% and 43% increase in average rates since 2016. The company aims to enhance freight capacity and attract new contractors amid record volume growth, providing a supportive environment for independent operators.

Positive

• Largest rate-per-mile increase in company history at 15 cents.
• Potential earnings for team drivers exceed $497,250 annually; solo drivers over $203,500.
• Average rates have increased 25% for solos and 43% for teams since 2016.
• Encourages retention of existing fleet and attraction of new contractors.

Negative

• None.

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ: FWRD) (the “Company” or “Forward”) is executing a growth strategy that involves organic infrastructure investments, such as its ongoing LTL network expansion, as well as inorganic investments, including acquisitions of complementary businesses. Forward today announced the largest ever rate-per-mile increase to its independent contractor fleet within its less-than-truckload (“LTL”) and Truckload divisions.

Forward Air Team Drivers (Photo: Business Wire)

Today’s announcement of a fifteen cent per mile increase for independent contractor fleets and independent contractor teams and solo drivers is an example of Forward’s commitment to grow our business and provide our independent contractors an excellent opportunity to operate and grow a successful business.

This announcement represents the largest per-mile increase in company history and is the third increase announced this year and the sixth in the last five years. With this fifteen cent per mile increase, we anticipate team independent contractors to have the ability to earn in excess of $497,250 annually/$41,437 monthly and solo independent contractors to have the ability to earn in excess of $203,500 annually/$16,958 monthly.

This increase, combined with other increases since 2016, means the average Forward independent contractor rate per mile for solos and teams has increased 25% and 43%, respectively over that time. Additionally, this increase alone allows for existing independent contractor solos and teams to increase their earnings year-over-year by 13% and 10%, respectively. These numbers do not include the opportunity for the recently announced destination compensation (up to $0.25 per mile for teams, and $0.125 per mile for solos) which provides additional compensation to independent contractors for taking loads into certain states.

“Our business continues to experience record volume growth. We remain focused on our commitment to delivering our customers’ freight with precision execution. 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,” said Tom Schmitt, Chairman, President and CEO of Forward. “This rate increase recognizes the dedication to excellence, precision execution, and the safety-first mentality displayed by Forward’s independent contractors.”

Per-Mile Rate Composition OTR Team   $1.55 Loaded $1.28 Empty +.02 HAZ + $.02 New Truck + Fuel Surcharge + Destination Compensation (Up to $0.25/mile)

Per-Mile Rate Composition OTR Solo   $1.31 Loaded $1.18 Empty +.02 HAZ $.02 New Truck + Fuel Surcharge + Destination Compensation (Up to $0.125/mile)

Fleet Owner Rate Composition Solo & Team   Additional Per-mile Compensation up to $0.15 per mile on all miles, based on # of trucks.

Forward offers a robust nation-wide expedited LTL operation, allowing independent contractors to run from one Forward terminal to another in our closed LTL network - which combined with our sixth-rate increase in five years provides an outstanding environment for success.

Forward’s LTL and Truckload fleet opportunities consist of running our national LTL network (terminal to terminal – drop and hook), dedicated lanes and open board opportunities. Fleet owners and owner operators can expect consistent miles, revenue, and mobile app technology to assist in the management of their business.

Forward’s lucrative sign on bonus program is still in place to help drive first year profitability for a transitioning Owner Operator/Fleet Owner. The sign on bonus consists of $10,000 per team truck and $4,000 per solo truck added to the Forward fleet – all paid out in the first year of service. Any drivers interested in connecting to one of our five-star fleet owners are encouraged to apply.

For more information, visit www.DriveForwardAir.com or email Recruiting@ForwardAir.com.

About Forward Air Corporation

Forward Air Corporation (NASDAQ: FWRD) is a leading asset-light freight and logistics company that provides services across the United States and Canada. We provide expedited LTL services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals. In addition, we offer final mile services, including delivery of heavy-bulky freight, truckload brokerage services, including dedicated fleet services; and intermodal, first-and last-mile, high-value drayage services, both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services. We are more than a transportation company. As a single resource for your shipping needs, Forward is your supply chain partner. For more information, visit our website at www.forwardair.com.

This press release may contain statements that might be considered as forward-looking statements or predictions of future operations including with respect to the expected volume growth and future performance of the Company and the ability of the Company to attract and retain independent contractors. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management’s belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may also differ from these expectations as a result of the risks identified from time to time in our filings with the Securities and Exchange Commission. You should consider the forward-looking statements contained herein in light of such risks. We assume no duty to update these statements as of any future date.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211216005790/en/

Sophia Farooq

sfarooq@forwardair.com

404-362-3959

Source: Forward Air Corporation

FAQ

What is the new rate-per-mile increase announced by Forward Air Corporation?

Forward Air Corporation announced a 15 cent increase in rate-per-mile for its independent contractor fleet.

How much can team and solo independent contractors earn after the rate increase by Forward Air?

Team independent contractors could earn over $497,250 annually, while solo contractors could earn over $203,500 annually.

How many rate increases has Forward Air implemented in the last five years?

Forward Air has implemented six rate increases in the last five years.

What is the primary goal of Forward Air's recent rate increase?

The primary goal is to secure freight capacity by retaining existing independent contractors and attracting new fleet owners.

How has Forward Air's average independent contractor rate changed since 2016?

The average independent contractor rate per mile has increased by 25% for solo drivers and 43% for team drivers since 2016.