Standard contract for "D" truck

[wolfen]

My husband and I are new to expedited. We have been talking with several companies and truck owners and are looking to get started in a month or so.

One thing I have noticed is the variation among contract stipulations among owners, even owners leased to the same company.

It seems the 60/40 split is most common in the expedited industry and is very understandable that the drivers will pay for the fuel and tolls. However, what other things should drivers expect to have to pay for?

We have talked to some owners who say the driver only pays for the fuel and tolls and nothing else, then talked to other owners who say the driver pays for truck insurance, qualcomm fees, trip pack fees, etc.

What is most common in the industry? What potential pitfalls should a newbie be aware of when looking at a contract?

Another question concerns fuel surcharges. Some owners and companies we have talked with say it varies based on national average and what certain customers pay but at least one company and the owner leased to them says he only gets 5 % of his per mile rate which comes out to about .06 for loaded miles. Does that sound right, his getting .06 per mile for all loaded miles without variation or is he getting the short end and doesnt know it?

Help is appreciated, we are new to expedited and working as contractors but not new to trucking.

 

[terryandrene]

Wolfen:

Comedian Chris Rock once said: "the only reason McDonalds pay it's employees minimum wage is because they have to" Carriers and owners leased to carriers aren't much different. They pay enough to attract owners and/or drivers, but keep enough for themselves to satify their own financial goals. The owners you mentioned sound no different.

I'm not a fleet owner and haven't driven for anyone but Rene', so my comments are strictly heresay and I offer them to get the topic rolling.

The 60/40 split is the most common division of revenue among driver/owners leased to expedite carriers. Typically, the driver will have a lease agreement with an owner whereby the driver agrees to pay only for the fuel and tolls; all other overhead is paid for or reimbursed by the owner. All other expenses related to the truck and it's activity are negotiable. You get what you can, owner gets what he can; you agree, then everyone is happy.

Personally, I think that drivers of owners should be classified as employees because they have no financial stake in the success or failure of the owners business. Most folks here will disagree with that statement and will likely provide their rationale for that disagreement. Regardless of my opinion, owners have been sub-leasing to drivers for as many years as I've been around and will continue to do so long in the future.

Try to conceive of every imaginable pitfall that could occur during your travels and ensure any agreement you have covers them all. Examples are: What to do in the event of an accident; What do you do while truck is out of service after an accident or for extended maintenance, particulary if you are far from home; When and how do you get paid; Where do you leave truck at end of your relationship with the owner; Is solo operation OK if spouse wants off for awhile; What if you are injured on the job; Paperwork requirements, when, where, Who, and how. This list is limited only by your imagination and your past trucking experiences should be of help to you.

The person paying for the fuel should want to receive 100% of any surcharges paid by the customer. I would want to have access to the owners documentation to ensure I was getting my fair share (all) of the surcharge. Your figure of 6 cents per loaded mile would mean about 54 to 60 cents per gallon. That would bring the effective cost of fuel from todays avg of $2.15, down to about $1.60. That seems fair to me.

Good Luck in your search for the perfect owner and we all trust you'll reward the perfect owner by taking good care of his equipment.

Happy trails, Terry

 

[RichM]

RE: Standard contract for

There is no standard contract,however the most common method for drivers that operate owners trucks is the 60/40 split with the drivers paying for fuel and tolls.
Any agreement you sign should cover unexpected maintenance problems. If the truck has a breakdown far from home and will require a week or two to get repaired,you need to have a agreement as to who pays for either motel rooms or transportation home.
If you are buying the fuel you should get 100% of the fuel surcharge period.
Some owners have incentive programs built into their agreements,such as after the truck exceeds a monthly gross you will get an additional percentage or bonus etc.

One important item is the day you pick up the owners truck is to take photos of all sides and document any existing damage.This can protect you down the road if the owner believes you have caused damage that was already there.

 

[LDB]

The 60/40 split is most common and usually the 60 goes to the driver however it could go the other way just as easily. The 60 side pays for the fuel and receives the fsc. The 60 side is going to net more money for you unless you get into a truck that's worse than a dog for fuel mileage.

For all dispatched miles in 2005 I've earned 12.05cpm in fsc (fuel surcharge). The best was 24.81cpm and the worst zero. At $1.20 per paid mile the split would be .72 + .12 for 84cpm or .48cpm flat. My fuel cost for 2005 is 23.1cpm. Subtracting from 84cpm leaves 60.9cpm taking the 60% plus fsc or still a flat 48cpm taking the 40% route. Numbers will vary depending on the carrier pay per mile and the fuel economy of the truck but that's how it figures.

Other than fuel and tolls there isn't much you would be responsible for paying. Your contract will probably say you pay any parking fees at the few truckstops that charge them. You'd also pay any traffic or weight fines incurred since those are items you control. Documenting the condition of the truck is excellent advice as you'd also be held responsible for anything outside normal wear and tear.

I can't think of anything else at this point. I'm sure others will contribute and add to this as well. Good luck to you.

Leo
truck 4958

Support the entire Constitution, not just the parts you like.

 

[ATeam]

While many of the above-mentioned items are important to consider, few are more important than the mechanical condition of the truck you will drive. Benefits like paid tolls pale in comparisson to the loss of a few days or even a week of revenue because the truck broke down. The newer the truck, the better.

 

[wolfen]

Thanks for all the input.

We have been talking with an owner who is also offering a 40/60 split.($1.30 per mi) They pay fuel and all other expenses including our workers comp insurance, we pay for tolls.

We are leaning in this direction simply because of not having to assume the burden of buying fuel until we can learn more about expedited.

 

[ATeam]

RE: Standard contract for

>Thanks for all the input.
>
>We have been talking with an owner who is also offering a
>40/60 split.($1.30 per mi) They pay fuel and all other
>expenses including our workers comp insurance, we pay for
>tolls.
>
>We are leaning in this direction simply because of not
>having to assume the burden of buying fuel until we can
>learn more about expedited.

Sounds good. Now that you've made your decision (or are close to it), focus next on developing a great track record in the next six months. That means no accidents, no service failures, no freight damage claims, above average load acceptance, and above average time in service. Doing so will likely produce above average income numbers too - assuming your carrier of choice offers mostly good loads.

Producing a great track record may mean sucking up a few irritating loads sometimes and bitting your tounge when you'd reather bite off a dispatcher's head. But it's worth it.

Fleet owners are DESPERATE to recruit and retain good teams. With a great track record to show after six months in the industry, and a professional reputation established with your carrier, fleet owners will beat a path to your door if you announce your availability in an EO Free Classified ad. That will likely include your current fleet owner if you do the professional thing and let him or her know that you will run the ad.

They will compete for your services with pay packages and truck features. With six months of expediting under your belt, you'll know better yourself what you want in a truck and compensation.

Good luck to you both and congratulations on the good research you did.

 

[LDB]

It sounds like a workable plan. It's good you are doing your homework before taking the plunge. What carrier is the truck leased to? Good luck to you.

Leo
truck 4958

Support the entire Constitution, not just the parts you like.

 

[wolfen]

Truck is leased to Panther II.