Nussbaum Transportation, an 80-year-old, 600-truck truckload carrier based in Illinois, runs driver turnover in the 35% to 39% range — a fraction of the industry norm. For context, the American Trucking Associations has reported annual truckload driver turnover consistently above 90% at large fleets in recent years, meaning Nussbaum's rate is less than half the widely cited benchmark. CEO Brent Nussbaum credits a 2018 Employee Stock Ownership Plan (ESOP) as a central pillar of that performance.

The privately held company sold 45% of the business to its employees in 2018, and Nussbaum said a second ESOP sale is planned for the first quarter of next year. If completed, it would deepen employee ownership at a time when driver retention remains one of the trucking sector's most persistent operational challenges, with recruiting and turnover costs cited by industry analysts as a multi-billion-dollar drag on carrier profitability.

Motivations Behind the ESOP Transition

Nussbaum said the decision was rooted in succession planning. As his family aged, he explored options for transitioning the company and found that many fleet owners who sold to outside buyers were dissatisfied with the outcome years later. He consulted with Bill Prevost, then-CEO of Quickway Transportation in Nashville, who was an early proponent of ESOPs.

The guiding philosophy came from Nussbaum's father, who founded the company with a single truck: "Take care of your people, everything else takes care of itself."

Under the ESOP structure, employees receive 4% to 6% of their annual salary in company shares each year, building wealth beyond a standard 401(k). The stock is independently valued each spring. Nussbaum said the share price was flat in the most recent valuation after several years of increases. "This last year it was flat, which I was thankful it didn't go down after this market," he said.

Governance and Transparency

The company holds quarterly all-hands financial meetings that include drivers, keeping the full workforce informed on operating results. The ESOP is governed by a board comprising three internal and three external members, along with a trustee — an attorney who represents the employee-owners but does not interfere in operations. The trustee is overseen by the U.S. Department of Labor.

"If I leave my career someday and all of our employees have done well, I get to walk away proud of what we've done for them," Nussbaum said.

Driver Retention Programs

Beyond equity, Nussbaum has built a layered retention strategy. The certified RED safety-and-performance program takes a full year to complete and rewards graduates with a pay raise, a special hat and ring, and a company-wide celebration. Drivers who maintain safe performance can stack additional pay increases through the program, even in years when across-the-board raises were scarce.

The company also began issuing profit-sharing checks this year. Drivers can pursue additional career paths as driver trainers or road captains assigned to incoming hires.

Nussbaum described two personal practices he calls part of the carrier's "secret sauce." Each week he personally calls every incoming driver before their start date — a gesture he said consistently surprises recruits. "I have never had a CEO call me before," he recounted drivers telling him. "I don't even know who the CEO of my company is." He also reviews a weekly shop report and phones any driver whose truck earns an exceptional cleanliness rating. "I'll have drivers that'll say, yep, saw that. Just waiting for you to call," Nussbaum said.

The carrier offers a $2,000 early-exit bonus to any driver who decides within the first 90 days — after completing 30 days on the job — that the company is not the right fit, provided the truck is returned to a company facility and the driver leaves in good standing. Nussbaum said the payout is rare because most drivers who clear the 30-day mark stay on.

The company's average driver age has dropped to 49 from 55, a shift Nussbaum said may reduce the subset of drivers who pull back miles after a pay raise. He noted that the company has never observed drivers reducing their mileage following a raise, countering what he described as a common industry misconception.

Nussbaum emphasized that the company hires for character rather than skills: "We can teach what they need to know as far as skills, but we hire for character. We want those people to care about drivers."

Company History and Strategic Shift

Founded by Brent Nussbaum's father with one truck, the company was originally a less-than-truckload (LTL) operation, with 65% of its business in LTL as a niche Midwest carrier. Following trucking deregulation's impact on the LTL sector — accelerated by the Motor Carrier Act of 1980, which removed federal entry and rate controls — and the rise of big-box retailers purchasing in truckload quantities, the company exited LTL in 2001 and built out its truckload operation with both over-the-road and dedicated freight.

Growth and Rate Strategy

Dedicated freight carried the company financially through the recent soft freight market while over-the-road results were negative. The U.S. trucking sector has been navigating a prolonged freight downturn that began in 2023, characterized by excess capacity, weak demand, and declining spot and contract rates. "Dedicated carried us the last few years financially," Nussbaum said. "It kept us in the green."

The carrier is now scaling in both segments and expects to grow at least double its typical 3% to 5% annual rate this year. Nussbaum stressed that the company wants to grow responsibly, noting that as an employee-owned business, recklessness would undermine employee trust.

To support that expansion, the sales team was directed to push contract rates higher first. Nussbaum acknowledged the process is creating friction with shippers, some of whose own businesses are struggling. He noted that rates have gone backward over the past three years.

A large shipper recently requested a direct meeting with Nussbaum and the chief sales officer in late August to understand the rate environment firsthand, rather than communicating through their logistics manager.

BidRight Pricing Technology

Nussbaum said the company developed an in-house bid-pricing tool called BidRight, originally built for internal use by five company developers. The software consolidates shipper RFP data, normalizes fuel programs, and generates a bid in seconds, replacing the spreadsheets most carriers use for pricing.

BidRight is now being resold through KSM, led by Chris Henry, alongside a product called Freight Math, to a group of approximately 100 carriers. Nussbaum framed broader industry adoption as a way to close the pricing gap between carriers and lift the overall rate floor, noting that the company's data-driven bids sometimes come in 10% to 15% above competitors.

Source: FreightWaves