Is there a major difference to the O/O between a set amount per mile plus FSC, and a percentage of Load, plus FSC. Of the Companies I've talked too each Say's there's is probably a little better.
Pay per mile VS % of Load
- Thread starter BillChaffey
- Start date
As a general rule, I don't think that you can say one is better than the other. Different carriers have different tariffs, different deadhead pay and means of deadhead payment, differents FSC computaion methods, different accesorial payments and different charge backs for things like TriPak or Qualcomm use.
If all thing were equal, I'd prefer a percentage. If tarrifs increase your compensation will increase with percentage, but not with flat rate. If tarrifs decrease significantly percentage recipients will see a decrease. When a carrier's profit margins fall below an acceptable rate, flat rates will decrease accordingly in the future, as they have in the past.
Your best bet is to find a carrier that meets as many of your expectations as possible. Look at all of the benefits of your chossen carrier, not just the Flat rate or percentage payment. Above all, know your annual cost per mile of operations so you'll be better equipped to make a carrier decision
If all thing were equal, I'd prefer a percentage. If tarrifs increase your compensation will increase with percentage, but not with flat rate. If tarrifs decrease significantly percentage recipients will see a decrease. When a carrier's profit margins fall below an acceptable rate, flat rates will decrease accordingly in the future, as they have in the past.
Your best bet is to find a carrier that meets as many of your expectations as possible. Look at all of the benefits of your chossen carrier, not just the Flat rate or percentage payment. Above all, know your annual cost per mile of operations so you'll be better equipped to make a carrier decision
As Terry said, if everything else is equal the % based compensation is likely to be somewhat better overall but changes with every load. Some people prefer the stability of a known rate per mile. As he said, it's the overall package and how it fits that's important.
Thank you, it's nice to have a questioned answered by O/O who have been there already.
nightcreacher
Veteran Expediter
Ive done this business both ways,% of load,as I prefer,and mileage.What I've found,usually if your on a mileage contract,the carriers dont like to give you empty miles,or very many of them,so you find yourself sitting.On percentage,some companies will pay you a pittance to dead head,some dont pay at all,but the percentage of the load you just delivered,is usally high enough,you dont need to get paid dead head.Now with that said,all the companies have their discounted customers,and on perentage this could hurt your revenue,but,deals are made every day.Back up loads get pre-dispatched,that will bring your revenue up.It's your choice,before you sign a contract with mileage pay,find out what kind of miles the other trucks your size are running.then you can make your decission.