According to Theron Thomson, leased owner-operator of K&J Trucking in Sioux Falls South Dakota, truck drivers often refer to their employers as “family”.
Thompson played a key role in K&J’s recent journey to the top of the CarriersEdge competition for the Best Fleets to drive For. He nominated K&J’s fleet for the first-time in 2021. K&J was placed in the “Fleets to Watch”, just outside of the Top 20.
K&J’s fleet of 125 trucks, which is 83% owned by its drivers, was initially disappointed that it did not place higher on the list. Shelley Koch, owner of K&J, said that “we started hearing, “Well, it’s a huge deal to get an honourable mention because the people in Best Fleets are there every year and the case is too hard to crack.” She added that after that year, “learning how tell our story” was the key to achieving more success in the program. “It was really what it came to.”
K&J made it to the top 20 in 2022 and 2023 before being named Best Overall fleet to drive for in the small carrier category 2024.
Koch replied, “I can tell how we got to this place.” “It’s staff,” Koch said. God is good. The people I work with each day are amazing, and so are our drivers. “I feel that this is a win as much for the administrative staff, the shop and our drivers because they are such an important part of us.”
Jane Jazrawy is the CEO of CarriersEdge, which runs the Best Fleets Program. She said that K&J, especially for its contractors, does things that many fleets do not or just won’t.
She said that they offer their contractors services that are unique. “Most fleets of contractor vehicles will say ‘Oh we can’t’ because they want to keep the distance to make their drivers true owner-operators. K&J manages to offer services, but the decision is up to the business owners, the owner-operators. But the offering is still there, and that’s what makes it so nice. I think this is a great environment for growing a business.”
Jazrawy pointed out that while carriers generally cannot offer employee benefits to independent contractors, K&J offers group discounts through a third-party (more about this later). K&J offers business coaching to help ensure the success of owner-operators leased by them.
“What I find is that the fleets who do participate [in Best Fleets], whether they are primarily contract fleets or not, do it differently,” Jazrawy stated. “They don’t approach it the same. They don’t offer [company-paid] healthcare, but you can still do other things to make a place a great place to work or do business. K&J excels in this area, I believe.
Owner operator Theron Thompson worked for K&J Trucking in total for around 11 years. The last nine were leased as an owner-operator.
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Theron Thomson’s journey towards full appreciation of the K&J way’
Theron Thompson was first diagnosed with head and throat cancer on December 9, 2020. Two days before Thanksgiving, he had just received the 2021 Kenworth T680 that he hauls with. On that fateful day in December, he had just recently sold his previous truck. “It was like, ‘What’m I going to do?'” He said. “I just got a new truck, and I sold my old one. I don’t really know what will happen.”
Thompson has been a truck owner-operator ever since he entered the trucking industry in the early 90s. This is minus the few years he spent as a driver for a company and sold a fleet. A portion of that time was spent with K&J. Thompson’s life at that time demanded he be closer to his family, so he quit K&J to take a job in a nearby town. He then followed a group of drivers that he knew into another company and stayed there for 14 years before returning to K&J nearly nine years ago as an owner operator.
Thompson has always enjoyed working with Shelley Koch, and the team at K&J. But it was the cancer diagnosis and the uncertainty that brought him to this conclusion. “Everyone always says they’re a family,” he said. “When they say it, they mean it.”
After the diagnosis, Thompson and his spouse went to Koch and explained what was happening.
“She says ‘Don’t fret about it, Theron’,” he said. Thompson said that K&J basically took over his truck payment, and allowed him to repay the note at his own pace after he received his cancer treatment. “She picked up her phone, called the Bank, and told them, ‘This will be the outcome.’ Boom. Not a big issue. Show me another company who would do that.”
Shelley Koch’s parents Dave and Sharon Koch founded K&J Trucking in 1979 with only one truck. In the 1980s Dave Koch brought Don Jerke on board as a partner. Don Jerke added the J in the fleet’s title.
The company’s very first customer was John Morrell & Co. (now Smithfield Foods). Dave Koch used a tried-and-true strategy to secure direct business as a fleet owner-operator. He asked the company for a lane that no one else wanted. Destination: Phoenix, Arizona.
In the early years, K&J transported produce to the border state and brought it back to Chicago. The company grew rapidly from there.
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Shelley Koch stated, “I think that we are a typical family-truck line.” “You start off with one truck, and that’s how it goes.”
Shelley says that Dave Koch died in 1991 and that by the late 1980s, the fleet numbered around 50 to 60 trucks. She had also started working part-time at the company. “And then I stayed there. After [her father’s] initial heart attack, my family asked me if I was interested in taking over K&J.
She said that at 25 she was a yes. However, “you don’t really know what you are saying yes to”, she said. “And then, four years later, I took over after my dad died.”
The fleet size has fluctuated over the years. It has shrunk at times and grown at others. K&J’s fleet size remained at 100 trucks until 2022, when it acquired Midwest Continental. It still does a lot of reefer work, even though it has 125 trucks. The company has a van division that hauls cabinets for a customer all over the country.
K&J completed the construction of a new covered fuel island at its Sioux Falls South Dakota headquarters. The island is designed to protect drivers from harsh South Dakota winters.
Management with Owner-Operator Success in Mind
Owner-operators have a certain amount of choice in terms of loads, but K&J generally runs the same areas consistently. K&J won’t send an owner to California if he doesn’t want it. The fleet dispatches according to the driver’s wishes.
The office staff keeps a close eye on the owners’ revenue per mile every week. Koch said that if someone falls short due to either our problem or the problem of theirs, we will make it right. “They may be offered a higher paying load that week because we are trying to keep everyone at a certain standard, because it is so tough out there and we need to make our drivers as whole as possible.”
Jazrawy also noted that the company offers a variety of other, in some cases “unusual”, methods of support. Koch and Company offers physical damage insurance that is among the cheapest, according to Jazrawy. Owners pay 2% of their truck’s value with a $1,000 deductable. She added that if operators choose to purchase worker’s compensation through K&J it costs under $200 per month.
She noted that “all the fuel discounts are passed on.” “We have inground fuel here and I believe we added 2 cents to offset the cost. Our shop labor is only $80 and you can get our discount on the parts. “I always tell operators that revenue is important but expense control is probably where their bread and butter is at.
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When asked about other benefits, Koch stated that the company “really struggles with getting healthcare for our operators. They used to be a part of our group and then we were informed they could no longer fall under our group in South Dakota.”
K&J can steer owner-ops towards individual policies that offer a discount for groups, even though the company does not have a policy option for lease owners. Operators can get discounts on vision, dental, cancer, disability, IDShield and other insurance policies.
The K&J headquarters has a drivers’ lounge, which includes a kitchen and recliners.
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Doug Newman, owner-operator of a small fleet and former banker, joined K&J in 2008 after a 21 year career. He had been driving trucks for many years, but not as a full-time job.
Newman was introduced to K&J by a friend and he contacted Koch about becoming an owner-operator. He agreed to do six months of work as a company truck driver before signing on for a lease. He has bought seven trucks, sold two at the peak used-truck prices of a few years ago, and now is off the road while still leasing three trucks to K&J.
“They do my pay, they service the truck; they dispatch the truck,” he said. “It is a great working relationship.”
Newman, who is a fleet owner, said that he tries, “just to make things flow better,” to align the benefits offered by K&J and those he offers his drivers. Drivers talk to other drivers.”
This link will allow small fleet owners (up to 30 trucks), who have authority, to enter the Small Fleet Championship sponsored by NASTC.
Koch is “just an incredible lady,” said he. “She is open, honest and easy to talk with. She has a good business sense. She has good people skills. She is not afraid to correct you when you are wrong and to compliment you. She’s a good person all around.”
A cautious approach towards lease-purchase
Lease-purchases have long been a hot-button issue in trucking. They’ve gotten even hotter recently with the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force shining a light on predatory practices by some fleets. Lease-purchases are a hot topic in trucking. They have been for a long time. Recently, the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force has shed light on predatory practices.
Koch said K&J strives for being different. To even be considered for a lease-purchase, you must have driven for K&J in the past six months as an employee. Koch explained that “we need to know you and you need us to get to understand each other.” “We don’t let you walk in the door and lease with us a truck. I don’t understand how you could do this and still feel good about getting a truck.
If a K&J truck driver is interested in eventual truck ownership via lease-purchasing, “we will start watching your performance and begin coaching you on how to better do your job,” added she. “That could be fuel economy. It could be better loading. It could be better safety procedures, or other things.”
Eric Calloway, owner-operator of K&J leased, is shown with his truck.
Drivers are not guaranteed a truck after six months of employment. If there are any concerns about the driver’s performance, money management, maintenance or anything else, the company will work with them to resolve the issue. If the concerns are minor, “we’ll tell you that you can lease a truck but these are minor concerns and we think these things will prevent you from getting most profitability out your business,” Koch said.
In the event that there are major concerns, the company will not assist a driver in a lease-purchase. They give the operator 90 days to fix the problem, and then reassess.
Once enrolled in the program, operators pay weekly based on the depreciation amount K&J paid for their truck. “They get the benefit of our discounted prices from our OEMs,” she said.
The company provides training to operators on how tax liabilities work and what it means for business owners. Koch said that the company takes a holistic approach to ‘How can you run a successful business?’ “Because anyone can get into a rent payment and have to spend all this money just to barely make ends meet.” This is not success in our eyes.”
Owner-operators are welcome to bring their own equipment into K&J. The company generally tries to adhere to the requirement that owner’s equipment must be at least four years old. In light of recent economic realities, the company has been more flexible if the maintenance records are up-to-par, the truck passes inspection, and there is a plan to upgrade to newer equipment at a time when the economy is more favorable.
Koch said, “We don’t want to run old equipment here for ever.” In a perfect universe, the distance would be 500,000 or less. We don’t live in a perfect universe. We take each case on its own.
Newman, a small fleet owner who leases his fleets, says the relationship has been a perfect fit. He knows that K&J has been his only trucking company, but he is confident that it will remain so for the rest of the time he works in the industry. He intends to remain leased to K&J till his retirement.
This link will take you to past articles in Overdrive‘s profile series of fleets leasing owners-operators.