60/40 Split?????

[BobWolf]

A question for fleet owners and those who are happy with them.

Talked to a local company they have a project they need covered they offer a 60/40 split to contractors, basically, they are working as a freight broker. I've worked with them before and never had problems getting paid and I can get a fuel spike when I need one they pay on a 15 - 30 day rotation. I'm being offered 60% of the gross I am on my own authority, insurance fuel, tolls, etc., all of the expenses, this company simply has the customers and a warehouse. HOWEVER, after I do the math I can barely do the work in a van and as for the S/T?, no way, I cant even justify starting the truck. I could care less when I hear them tell me how they can keep me busy if this arrangement is this like I'm doing them a favor for beer or something.

I know typically the broker fee is 10% + or - a couple bucks.
So, the question is if a broker or fleet owner keeps 40% what if anything do they pay for, and what is the driver O/O under his own authority and all expenses paying for.

Bob Wolf.

 

[xiggi]

I think a fleet owner or a broker paying 60% are two entirely different things.

Sent from my Fisher Price - ABC 123

 

[BobWolf]

I looked up their DOT # they are not a broker so I will consider them as a fleet owner.
I will rephrase the big question just to simplify the topic.

If they are a fleet owner how does the typical 60/40 arrangement work for expenses and who pays for what?

Bob Wolf.

 

[davekc]

From a fleet owner prospective, the typical fleet owner on a 60/40 split pays for everything except usually fuel (100 percent of FSC) to the driver. Outside of the fuel, personal insurance and things like that would get picked up by the driver. The fleet owner covers the truck, insurance, licenses, and maintenance costs.

If a broker is paying 60 percent and you are running on your own authority and carrying all the necessary costs, it is likely too low. Where I am at, using the carriers authority and insurance, it is 85 percent.

 

[BobWolf]

Thanks Dave, I thought the Fleet owner covered more at 60/40. I figured I would need at least 80% so, 85% seems fair and makes sense.
I can likely make the 5% difference back with work volume and let someone else chase the shipper for payment. Ill try a counter offer tomorrow and see what happens.

As for payment from fleet owners is a 15 to 30 day payment the standard?

Bob Wolf.

 

[davekc]

Thanks Dave, I thought the Fleet owner covered more at 60/40. I figured I would need at least 80% so, 85% seems fair and makes sense.
I can likely make the 5% difference back with work volume and let someone else chase the shipper for payment. Ill try a counter offer tomorrow and see what happens.

As for payment from fleet owners is a 15 to 30 day payment the standard?

Bob Wolf.

I would say 15 days at the most. Some have quick pay, but that usually comes at a cost. Most will provide the fuel money up front on a load with the balance being paid on that 15 days.

 

[BobWolf]

That's how they paid me before 15 days on the pay period run this week, counts as Friday, paid in two weeks, fuel spikes as needed, it worked out good then. I typically give shippers and brokers 15 days and that puts spendable money in the bank within 20 -25 days of the job.

Bob Wolf.

 

[asjssl]

My driver and I have the 60/40 split agreement...but with FSC its more like 70/30..

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[davekc]

My driver and I have the 60/40 split agreement...but with FSC its more like 70/30..

Sent from my DROID RAZR using EO Forums mobile app

Some of that depends on the carrier and how they split their pay with relation to FSC and the line haul. At Load One we set a minimum on the line haul for a straight. It can get lopsided if a run pays a buck on the line haul and sixty cents on the FSC. Can't run a truck on .40 cent a mile. Even more so if there is no relocation or deadhead.

 

[BobWolf]

I crunched the numbers, at a gross of $2.00 a mile 85 percent it's doable as Long as I get a decent fuel surcharge the load volume is there.

Bob Wolf.

 

[blackpup]

Clarification needed.

Davekc = fleet owner operating his equipment, under another companies Motor Carrier authority ?

Bobwolf = trucker operating his eqipment under his M/C authority brokering a load from another company / shipper?



Thanks

jimmy

 

[mjmsprt40]

Personal experience: I've learned to get scared the instant I hear "company warehouse".

I know as soon as those words are uttered, I'm going to work for next to nothing and hear about how bad a driver I am because the route is ridiculously sized, my van is overloaded and the rate being paid per piece can't be justified any way shape or form. Nothing-- absolutely nothing-- gives me the heebie-jeebies faster than "company warehouse".

At this point, the percentage has no-not-any interest for me until I hear what it's a percentage of. Too much cheapo warehouse freight will do that to you. 85% of 2.50 per piece doesn't necessarily buy much, you know. Especially when you've had to haul to the ends of the earth to deliver that piece.

 

[davekc]

I have preached that for years. When you hear "percentage" it all depends on what that number is based on. Sometimes it is good, and other times, not so good. I as well have had to make some adjustments based on those "percentages".

 

[paullud]

I looked up their DOT # they are not a broker so I will consider them as a fleet owner.
I will rephrase the big question just to simplify the topic.

If they are a fleet owner how does the typical 60/40 arrangement work for expenses and who pays for what?

Bob Wolf.

If they don't have a broker authority and they are brokering freight just turn them in and then take the customer. :thumbup:

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[BobWolf]

Thanks to Dave and everyone for the advice. This is why after being in business for the past 6 + years I'm here, and I refer newbies and old timers to this site.

I did run for a couple weeks doing local mostly van work I have a couple days of rate breakdown sheets in front of me and unfortunately its not getting it done, they are set on the 60/40. It's not going to work out as planed so, it's time for another plan. The one thing I've learned the key to this business be flexible. It looks like Ill have to go out and bruise my knuckles and knock on doors for a few days.

If they don't have a broker authority and they are brokering freight just turn them in and then take the customer. :thumbup:

Sent from my SCH-I535 using EO Forums mobile app

As far as reporting them,?
As long as they don't screw with me on payment It's all good. If all of a sudden Money is an issue or not there, then I know how to deal with it.

I started out working for them, almost 6 1/2 years ago and ran with them for almost a year. Back then we did the 60/40 split, they were good about getting me paid when payday came around, but parted ways due to slow work they had to keep their full time employees working. I left on good terms both then and now so, I don't want to burn a bridge I might need down the road. They have been around for a long time and all the shippers in Rochester have used them at one time or another many are regular customers, and as we all know word gets around quickly and I don't want to be branded as an A hole, and destroy any chance of getting customers or potential business opportunities with them.
I want my integrity to speak for itself.

Be Safe.
Bob Wolf.