What's the Deal Really?

[ATeam]

Lately, there have been multiple references in various threads about new owner-operator compensation schemes being offered by one or more expedite carriers, but as I read the various posts, it is difficult to determine the terms exactly. If this is confusing to someone with expedite experience, it must be even more confusing to someone looking at the industry for the first time.

Can you lay it out clear? For the expedite carrier you are with now, what is the current compensation scheme (or soon-to-be implemented scheme), and how does it differ from the scheme you had a year or two ago?

 

[TeamCaffee]

From what I have read each person has their own take on what they think the different pay plans mean.

I would suggest that someone who is new to the business ask the questions directly of the company they are considering and get the information from the source not another drivers opinion.

What I have found worked very well for me was to keep asking questions of the company we were considering and then ask drivers the same questions until we arrived at our own conclusions.

 

[Dynamite 1]

Pay is 67% of line haul plus fsc for the first 90 days then 70% after that plus fsc. Same as last year, the year before and the year before that.

 

[ChanceMaster]

Lately, there have been multiple references in various threads about new owner-operator compensation schemes being offered by one or more expedite carriers, but as I read the various posts, it is difficult to determine the terms exactly. If this is confusing to someone with expedite experience, it must be even more confusing to someone looking at the industry for the first time.

Can you lay it out clear? For the expedite carrier you are with now, what is the current compensation scheme (or soon-to-be implemented scheme), and how does it differ from the scheme you had a year or two ago?

From the FDXCC front, after ( or beginning) June 1st, there is no more negotiating an acceptable rate for NON WG loads, if you are a Surface expedite truck, you are being forced to accept a lower flat rate, with added pay for HAZ/Canada/ NYC, etc.

WG trucks if offered a surface expedite load, also cannot put in a counter offer. A non WG load is flat rate, no matter who it is offered to. I'll let others speak to the rate, but it's low.

As usual, it's being spun as " you'll get more miles !" And there has been talk of more efficient load planning ( take a short load, and then this longer load ).

I have noticed a significant, let me say that again, Significant ! decline in load offers since April ( as have others posting here ) and the ones that come a cross the clink are at VERY low rates ( unless you are right on top of the pick up location ).

Be glad you paid your dues, had fun, made money...and got out.

 

[zorry]

There's a large fleet owner looking for a TVal team to put into a truck. That truck, or his best truck, did $347,000 last year.
I'd call him and ask him the numbers.
With 10-11 mpg, 500,000 mile tires, low interest money for the well qualified, $300,000 plus should provide a good ROI for a savvy operator.

Edit: ad reads Top team grossed over $340,000 in calendar year 2013.

 

[ATeam]

By way of example, when Diane and I became owner-operators with FedEx Custom Critical (after driving fleet-owner trucks before), we were paid 61% of the gross (reefer truck). When we left, the stated deal was unchanged. We still got paid 61% of the gross.

But while the deal did not change, the amount of money we got paid did. That was because other things changed with the company; specifically, the company purchased a fleet of company-owned and operated reefer trailers and we saw ourselves getting passed over for loads that we used to haul. Also, when we started with the company, they had a rule that no fleet owner could own more than five trucks. That rule was later changed or ignored and large fleet owners came on the scene; fleet owners that boasted special connections with the company that we did not enjoy.

While we did not like the changes, we stayed around until these changes showed up in our spreadsheet. When it became clear that these changes had a negative impact on our revenue, we left for Landstar Express America.

At Landstar, the deal was essentially the same. We got paid a percentage of the gross. There where a host of differences between carriers in things like detention time, pay for accessorials, the various fees (Qualcomm, fuel card transactions, etc.).

Also different was the ability to negotiate. Several times while we were with FCC, FCC announced that negotiatiating rates would no longer be allowed. But in every case, that policy was ignored as soon as we were needed and no other trucks were available.

But at Landstar, where the culture is different, we were routinely asked to negotiate (actually, bid) a rate on the first call. It was common to be asked, "What do you need to do this load?" The agent would then take our rate to the customer and bid it. At other times, the agent had already negotiated a rate with the customer and he or she would simply offer you a price. Even then, negotiating was possible if you needed something like more money to cover tolls on a run the the Northeast, or extra labor to cover an inside pickup.

Another difference was in the base on which the percentage of the gross was paid. When comparing carriers that pay a % of the gross, the key question is, how much is the gross? What would you rather have, 61% of $1,000 or 63% of $800? While a higher percentage may sound good on the surface, more important is how the policy actually plays out on the ground.

With many loads that we hauled for the exact same customers with two different carriers, we found that the gross amount on which the percentage is calculated varied significantly (more favorable at Landstar).

That is why I am asking for the apples-to-apples clarity above. For the carrier you are with now, how does your compensation deal today compare with the same carrier a year or two ago. Are rates truly going down as the recent flurry of posts suggest, or it is idle talk?

What are your spreadsheets telling you? For those of you who do not keep spreadsheets, what are your odometers and paychecks saying?

 

[ATeam]

There's a large fleet owner looking for a TVal team to put into a truck. That truck, or his best truck, did $347,000 last year.
I'd call him and ask him the numbers.
With 10-11 mpg, 500,000 mile tires, low interest money for the well qualified, $300,000 plus should provide a good ROI for a savvy operator.

That sounds like quite the deal. Who is the fleet owner and what keeps you from jumping on board with him or her?

 

[ATeam]

From the FDXCC front, after ( or beginning) June 1st, there is no more negotiating an acceptable rate for NON WG loads, if you are a Surface expedite truck, you are being forced to accept a lower flat rate, with added pay for HAZ/Canada/ NYC, etc.

In our eight years with FCC, it was announced on several occasions that negotiated rates would no longer be permitted. Yet, in every case, we continued to negotiate, and the dispatchers did too. If I was still with that carrier, I would see no good reason to believe this no-more-negotiation announcement, just like there was no good reason to believe previous such announcements. What are they going to do, let the load go to a competitor because they don't want to pay you the extra $100 you seek to cover the additional deadhead?

 

[ATeam]

Be glad you paid your dues, had fun, made money...and got out.

We are very happy we had fun and made money but given the fun we had (and now miss) as expediters, very little of it felt like paying dues. We got out not because of declining rates. After changing carriers, we did better than ever before. We got out because that's what we do.

Every 10-15 years, the career-change bug seems to bite. The bug that bit and got us into trucking in 2003, bit again ten years later and got us out of expediting and into our present endeavor.

 

[ATeam]

... get the information from the source not another drivers opinion.

... keep asking questions of the company ... and then ask drivers the same questions ....

??????????

 

[ttruck]

I would like to thank you at ateam for your info over the years hear at expeditersonline.com I have learned much from u, I to left my previous carrier panther for landstar and I have never looked back being able to actually talk to an agent who works for you is way better.

 

[Dynamite 1]

By way of example, when Diane and I became owner-operators with FedEx Custom Critical (after driving fleet-owner trucks before), we were paid 61% of the gross (reefer truck). When we left, the stated deal was unchanged. We still got paid 61% of the gross.

But while the deal did not change, the amount of money we got paid did. That was because other things changed with the company; specifically, the company purchased a fleet of company-owned and operated reefer trailers and we saw ourselves getting passed over for loads that we used to haul. Also, when we started with the company, they had a rule that no fleet owner could own more than five trucks. That rule was later changed or ignored and large fleet owners came on the scene; fleet owners that boasted special connections with the company that we did not enjoy.

While we did not like the changes, we stayed around until these changes showed up in our spreadsheet. When it became clear that these changes had a negative impact on our revenue, we left for Landstar Express America.

At Landstar, the deal was essentially the same. We got paid a percentage of the gross. There where a host of differences between carriers in things like detention time, pay for accessorials, the various fees (Qualcomm, fuel card transactions, etc.).

Also different was the ability to negotiate. Several times while we were with FCC, FCC announced that negotiatiating rates would no longer be allowed. But in every case, that policy was ignored as soon as we were needed and no other trucks were available.

But at Landstar, where the culture is different, we were routinely asked to negotiate (actually, bid) a rate on the first call. It was common to be asked, "What do you need to do this load?" The agent would then take our rate to the customer and bid it. At other times, the agent had already negotiated a rate with the customer and he or she would simply offer you a price. Even then, negotiating was possible if you needed something like more money to cover tolls on a run the the Northeast, or extra labor to cover an inside pickup.

Another difference was in the base on which the percentage of the gross was paid. When comparing carriers that pay a % of the gross, the key question is, how much is the gross? What would you rather have, 61% of $1,000 or 63% of $800? While a higher percentage may sound good on the surface, more important is how the policy actually plays out on the ground.

With many loads that we hauled for the exact same customers with two different carriers, we found that the gross amount on which the percentage is calculated varied significantly (more favorable at Landstar).

That is why I am asking for the apples-to-apples clarity above. For the carrier you are with now, how does your compensation deal today compare with the same carrier a year or two ago. Are rates truly going down as the recent flurry of posts suggest, or it is idle talk?

What are your spreadsheets telling you? For those of you who do not keep spreadsheets, what are your odometers and paychecks saying?

All miles rate up .20 over last 2 years !!!!!!

 

[OntarioVanMan]

I never talk to the monkey..I go right to the organ grinder.....

 

[ATeam]

I never talk to the monkey..I go right to the organ grinder.....

That works, but if you want to know what kind of person the organ grinder is, they monkey might be the better one to ask.

 

[OntarioVanMan]

That works, but if you want to know what kind of person the organ grinder is, they monkey might be the better one to ask.

in that reference term..yes.....specifically we were addressing pay scales tho....

 

[Jeepers]

The answer is see to the current situation of rate reduction in order to curry favor with customers is to increase the rate going to trucks. Increase the percentage to percentage based wg trucks. Haha haha I made a funny.

 

[Turtle]

In our eight years with FCC, it was announced on several occasions that negotiated rates would no longer be permitted. Yet, in every case, we continued to negotiate, and the dispatchers did too. If I was still with that carrier, I would see no good reason to believe this no-more-negotiation announcement, just like there was no good reason to believe previous such announcements. What are they going to do, let the load go to a competitor because they don't want to pay you the extra $100 you seek to cover the additional deadhead?

If you were still with that carrier, then in all likelihood you would, in fact, see a good reason to believe the no-negotiation announcement, because you would be more attuned to the impact of being a member of the Alliance has on getting loads covered. Not only will those on percentage contracts get paid virtually the same as those on flat rate contracts, thanks to the creative use of in-house brokerages which change who the paying customer becomes and the rate paid, but it allows them to net the same amount of money (for surface, anyway) regardless of who hauls that load, one of their contracted O/Os or someone else's. There will be no reason for them to negotiate when they have scores of other trucks who will run the load for the same or less money to the truck. If for no other reason than to make their point, yes, they will, absolutely, let the load go to a competitor, because they're making the same money anyway. I've certainly run enough of their loads to see it. Like Chance said, be glad.

 

[ATeam]

If you were still with that carrier, then in all likelihood you would, in fact, see a good reason to believe the no-negotiation announcement, because you would be more attuned to the impact of being a member of the Alliance has on getting loads covered. Not only will those on percentage contracts get paid virtually the same as those on flat rate contracts, thanks to the creative use of in-house brokerages which change who the paying customer becomes and the rate paid, but it allows them to net the same amount of money (for surface, anyway) regardless of who hauls that load, one of their contracted O/Os or someone else's. There will be no reason for them to negotiate when they have scores of other trucks who will run the load for the same or less money to the truck.

This very point came to mind a few hours after I made my earlier post. Some months ago, maybe a year, FCC announced that they were further developing their relationship with Sylectus, to include use of the software and dispatch system. The impacts of that move now seem to be coming to light.

For the surface fleet at least, it may no longer be appropriate to view FCC as a unique carrier but as an extension of the Sylectus virtual fleet, operating under the same rules and dispatch system that all other Sylectus-affiliated carriers do. Yes, they have their brand on the side of their trucks, but so do all other Sylectus-affiliated carriers.

This is a major victory of technology and a huge credit to the Sylectus founders. Their vision enabled them to see, well ahead of time, what a connected world will look like. They developed systems to serve the future and those systems are so good that a company as prestigious as FCC saw fit to abandon their in-house IT in favor of what Sylectus can provide.

Notice that in recent years, while FCC has made dozens of changes, every single one of them has been made to either change their dispatch system in a way more favorable to the company or to enhance company revenue by changing one policy or another.

There is an exception. EOBR's have been well received by the majority of drivers and drivers who are so disposed would view the addition of them to the fleet as a positive development for them. But that decision was not made by the company with benefiting the drivers first in mind. It was made to improve the company's SMS scores and because FMCSA had indicated that EOBR's will come one day to all trucks on the road.