Rate per mile?

[paullud]

Last night as I was driving I was thinking about this post...the idea of locking into a flat rate....Now this is all assumption but...

Looking at the big picture and the present market conditions...

we are in a slump....rates are about as low as they will get(hopefully)...trucks are being parked...capacity is dropping...
Then add in the CSA and the coming of EOBR...should thin the herd.
to me this would indicate that sooner then later the lack of equipment (supply and demand), rates should inch up again and you'll be locked into a flat rate.

What I am saying is...I am averaging about $1.25 a loaded mile and around $1,05 all miles....and this is at so called depressed rates and I am a sprinter....so where will that leave you when rates inch upward....

IMO

I think some people just want to feel they can sleep at night and not have to think about the numbers as much. It would be a great beginners program and I don't mean that as a joke. It really takes any sort of business thinking out of the equation and lets the driver focus on driving. On the other side I think people with knowledge of the business and industry will be able to perform better.

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[jjoerger]

These are all great responses but not an answer to the question.

So the question is, for a "D" truck what is your average rate per mile for all miles including dead head? Not including fuel surcharge, tolls or any accessorials. Please include what company you are leased to.

Contractors for Express 1, Tristate, Load 1 and others, how about a realistic all miles rate? You guys know how much you are averaging. Please share.

 

[greg334]

$2.50 all miles excluding reefer and fsc.

 

[jjoerger]

Thanks Greg. And that's a great rate, but aren't you on a dedicated run most of the time?

 

[greg334]

Thanks Greg. And that's a great rate, but aren't you on a dedicated run most of the time?

Yep dedicated, which means it is different freight but the rate for the service is about right.

 

[jelliott]

Jim,

I responded to your PM. I don't like throwing numbers around when you pay on a percentage basis. It is very subjective to the operating habits of the owner operator, and as we all know they can vary greatly. Then you have other owners "I pay more than them!". Which when you pay on a percentage basis is a pretty stupid statement. How could you say that when you don't know what is being billed out?

I think OVM is correct. As the market continues to tighten, fixed pay plans may have more upside for the carrier than the owner operator. Now the inverse is true if rates fall going forward. Part of a choice needs to be based on your outlook for the economy. This would be a big part of picking a pay plan with Fed Ex.

I have no problem with any of my units responding with how they are doing as individuals. That way they can answer any questions directly.

I will say this, if I went to the plan in question my company would be making more money.

 

[OntarioVanMan]

Jim,

I responded to your PM. I don't like throwing numbers around when you pay on a percentage basis. It is very subjective to the operating habits of the owner operator, and as we all know they can vary greatly.

I think OVM is correct. As the market continues to tighten, fixed pay plans may have more upside for the carrier than the owner operator.

I have no problem with any of my units responding with how they are doing as individuals. That way they can answer any questions directly.

I will say this, if I went to the plan in question my company would be making more money.

I did not catch it at first, but Jim has the option should things not workout or market changes to go back to %....he is NOT locked into it...

 

[jjoerger]

I did not catch it at first, but Jim has the option should things not workout or market changes to go back to %....he is NOT locked into it...

Correct. But we can only switch back once. And so far, as of the last time I heard, only 2 trucks have changed back.

 

[OntarioVanMan]

Correct. But we can only switch back once. And so far, as of the last time I heard, only 2 trucks have changed back.

Gotta go with what you feel is right for you....IF I had of listened to these arm chair quarterbacks...I'd still be tossing newspapers.....LOL

 

[nightcreacher]

Flat rate is soley for the company.Does anyone think as the rates get higher,the flat rate will increase,if you do,I have a bridge to Hawaii I would like you to invest in.One other thing,on a flat rate your loaded mile will increase and your dead head will diminish.Making you wander ,what your pay would have been if you stayed percentage.All companies,have tghe idea as long as your moving your making money,but the more miles you run,the sooner you will have to replace your equipment,and I bet no one in your expense account has a replacement of vehicle figured in.
Another thing,what will a flat rate do to the solos running short miles,does this flat rate have a sliding scale?I hope so,or the solos are on a short trip to destruction.
Good luck,think anyone going on flat rate will need it

 

[OntarioVanMan]

Flat rate is soley for the company.Does anyone think as the rates get higher,the flat rate will increase,if you do,I have a bridge to Hawaii I would like you to invest in.One other thing,on a flat rate your loaded mile will increase and your dead head will diminish.Making you wander ,what your pay would have been if you stayed percentage.All companies,have tghe idea as long as your moving your making money,but the more miles you run,the sooner you will have to replace your equipment,and I bet no one in your expense account has a replacement of vehicle figured in.
Another thing,what will a flat rate do to the solos running short miles,does this flat rate have a sliding scale?I hope so,or the solos are on a short trip to destruction.
Good luck,think anyone going on flat rate will need it

Steve...did you read the whole plan?

 

[ATeam]

I think OVM is correct. As the market continues to tighten, fixed pay plans may have more upside for the carrier than the owner operator. Now the inverse is true if rates fall going forward. Part of a choice needs to be based on your outlook for the economy. This would be a big part of picking a pay plan with Fed Ex.

If the inverse were true, would it not be a simple matter for a flat-rate carrier to simply lower the rate paid to contractors? Did not that very thing happen during the recession?

 

[jjoerger]

Flat rate is soley for the company.Does anyone think as the rates get higher,the flat rate will increase,if you do,I have a bridge to Hawaii I would like you to invest in.One other thing,on a flat rate your loaded mile will increase and your dead head will diminish.Making you wander ,what your pay would have been if you stayed percentage.All companies,have tghe idea as long as your moving your making money,but the more miles you run,the sooner you will have to replace your equipment,and I bet no one in your expense account has a replacement of vehicle figured in.
Another thing,what will a flat rate do to the solos running short miles,does this flat rate have a sliding scale?I hope so,or the solos are on a short trip to destruction.
Good luck,think anyone going on flat rate will need it

Why do I need a replacement of vehicle figured in? I paid $28,000 cash for my truck and I have already replaced the money that I used to pay for it. I have a maintenance fund that I put aside for major repairs and I pay for minor repairs as needed. It's a 2006 Columbia, in great condition, insured for a stated value. How many times do I have to earn back the cost of this truck?
The solos running flat rate seem to be thrilled with the program. One posted he is running an average of 10,400 miles a month in a straight truck.
The flat rate trucks have a dedicated dispatcher that keeps them moving. Right now an E dry van is getting (I think) $1.53 all miles. That includes DHPU, Loaded and DHPL.
Why would I care if I dead head or run loaded? My weight will never be over 33K on a class 8 with a 450HP Mercedes. My fuel mileage loaded is 9.7 MPG and empty 10 mpg. It all pays the same.
Please PM me the prospectus on your bridge to Hawaii.

 

[jjoerger]

If the inverse were true, would it not be a simple matter for a flat-rate carrier to simply lower the rate paid to contractors? Did not that very thing happen during the recession?

And the percentage based carriers lowered the rate they charged the customers thus lowering the rate to the contractors.

Supply and demand will drive the rates up or down as capacity changes. Eventually the flat rate carriers will raise there rates or lose contractors.

 

[ATeam]

Supply and demand will drive the rates up or down as capacity changes. Eventually the flat rate carriers will raise there rates or lose contractors.

The carriers have another option, one that has been used by line haul carriers for years. If a driver shortage develops, they can recruit their way out of it. If recruiting becomes difficult, they can lower their standards. There are millions of scum bags out there who have never driven a truck before and therefore have perfect CSA records.

I fear that FDCC has elected to go that route. They are not paying flat rate trucks enough money to attract and retain high quality teams who can do better elsewhere.

It might be nothing, but FDCC's May 27 announcement that they will assist contractors in obtaining their base plates seems like a bad omen to me. What kind of owner-operators cannot afford their own base plates? Whatever kind they are, FDCC has just opened its doors to them.

Why are they doing this? The announcement says, "...we feel it will be a good tool for recruiting as well as retaining our current contractors."

A pay raise would be a good way to recruit and retain contractors too but that is not happening. Instead, they come up with yet another way to charge contractors money for the privilige of hauling FDCC freight.

If FDCC is having a recruiting and retention problem, it is already clear that a pay raise is the very last thing they use to resolve it.

 

[paullud]

The carriers have another option, one that has been used by line haul carriers for years. If a driver shortage develops, they can recruit their way out of it. If recruiting becomes difficult, they can lower their standards. There are millions of scum bags out there who have never driven a truck before and therefore have perfect CSA records.

I fear that FDCC has elected to go that route. They are not paying flat rate trucks enough money to attract and retain high quality teams who can do better elsewhere.

It might be nothing but FDCC's May 27 announcement that they would assist contractors in obtaining their base plates seems like a bad omen to me. What kind of owner-operators cannot afford their own base plates? Whatever kind they are, FDCC has just opened its doors to them.

That was the idea that a lot of trucking companies have had in the past, it is the Meat In The Seat campaign. It almost put the company I was driving for out of business and obviously you as experienced drivers know the reputation of Swift and JB.

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[jjoerger]

Most line haul carriers have there own tractors. Most drivers with no experience do not have the ability or means to purchase there own trucks. Sounds like good times for fleet owners with the ability to purchase more power units.

 

[nightcreacher]

Steve...did you read the whole plan?

Jim
Ive never seen the flat rate contract,just actually know about it from a close friend that since that time has sold his truck and retired.He was going to do the reefer thing,but to many stipulations,he got a good deal on his truck,he and his wife now are off the road.

 

[ATeam]

Most line haul carriers have there own tractors. Most drivers with no experience do not have the ability or means to purchase there own trucks. Sounds like good times for fleet owners with the ability to purchase more power units.

I'm not sure what you mean by good times for fleet owners. I have only talked to one fleet owner who is trying to bring tractors into the flat rate program. His complaint is that he cannot find good teams.

He has been a straight truck fleet owner for many years so team recruiting is nothing new to him. It is different, however, to find a team to go into a big rig with a factory sleeper.

Meat in the seat is the solution if the money is not there to pay good teams better than they can get elsewhere and pay for good trucks that good teams want to drive. You will have a high turnover rate as drivers cycle through but you will also keep your trucks moving with freight on board.

Technology is making meat in the seat easier to do because the drivers and trucks and events like truck location, truck speed, reefer on, and door closed can be monitored in real time. Maintenance items can be thoroughly monitored via Qualcomm's connection to the ECU. With technology, a truck can be pre-tripped and post-tripped almost entirely (almost but not quiet) from the office.

Much of what carriers relied on drivers to do in the past (like log books) is being replaced by technology. The more that happens, the less valuable the driver becomes and the less qualified a driver needs to be.

It is expensive to train drivers to be true professionals (as in a six month professional truck driver training program) and keep them on board. Better, cheaper, and more profitable, the carriers seem to think, to hire at the lowest possible level, put baby monitors in their trucks, and turn drivers over as frequently as you must to roll, baby, roll!

Carriers don't get paid to train drivers and keep them happy. They get paid to move freight. The lower quality of driver they can hire, the less they will have to pay and the more money they can make.

 

[jjoerger]

Meat in the seat and keep the wheels turning has always been the mantra of the trucking industry. At least since deregulation.
It doesn't take a lot of education to drive a truck and most drivers (drop & hook) do not even need to be presentable to the public. An average solo makes less than $800 a week. About what an experienced construction worker earns.
The ones making the money are the carriers. Buy the trucks at a discount and write them off over three years, then sell them cheap and take the loss write off. Lease the trucks to the drivers and let them make the payments and be contractors so that the carrier can save on taxes and benefits. Very few lessees will ever own the truck they drive. Although most are not smart enough to realize this.
I don't think the massive driver shortage will occur anytime in the near future. There are still enough long term unemployed willing to fill the seats and as Phil pointed out technology just lowers the level of knowledge required for the job.