Who pays the fuel?

[Sawbones]

I have been reviewing some of the request for drivers, both team and singles, and it seems as though the bulk of the offers where for 60/40 split an the driver pays for fuel. Is this the common way? If an employer offers this, would it be OK to counter with a 40/60 split instead with them paying for the fuel? Or is that shooting yourself in the foot? I have seen the ads for Fed EX and Panther II and the going rate is around a 1.50? Is that about right? If I have figured this right a team driving 5000 miles a week would make about .60 a mile or 1500.00 a week per driver. Now is the 5000 miles a week figure too high? Am I dreaming or is it closer to 3500? That would still be about 1050.00 week. Incidently, this is more than I make now, and I have been a nurse for 14 years. Can you believe that? And I don't even get to see this great country for that lower salary. Anyway, I digress. What is a normal contract for a company person? The main reason that I ask this is, how does a new person figure out how much cash on hand to have for fuel when starting.

I have more questions but am going to ask them in the next post.

 

[LDB]

The vast majority seem to be on a 60/40 split basis with the 60% side paying the fuel. FX pays on a percentage basis so there isn't a nice set number to do arithmetic with. Panther pays $1.20 to D units. Based on that the split is .72/.48 cpm (cents per mile) for loaded miles. The .24cpm difference is about what the fuel costs to run a D unit.

The fsc (fuel surcharge) ranges anywhere from zero (extremely rare) to about .25cpm depending on the contract with the shipper. Whatever the fsc is it should go to the party paying for the fuel.

If I'm the owner I want the driver to pay fuel. There's no incentive for them to conserve otherwise. Hopefully the high cost of fuel will have them running easier on my equipment as well as minimizing idling time. If I'm the driver I want the opportunity to make a few extra pennies by operating the truck in a fuel conserving way as well as the extra income generated by fsc.

Compare a run done both ways. The truck gets 8mpg for math work. Fuel is $2.00 a gallon. Fuel costs .25cpm for this example. There is 80 miles deadhead to pickup for a 400 loaded mile run at $1.20 per mile. It's 20 miles from the delivery point to a truckstop to overnight at. This run has a .20cpm fsc. It's going to take 62.5 gallons of fuel for the 500 miles total.

The run pays $480 (400*$1.20) to the truck. The fsc pays $80 (400*$0.20) to the fuel purchaser. The 60% side gets $288 ($480*.6) plus $80 for $368 total and pays $125 for fuel leaving $243. The 40% side gets $192 ($480*.4).

If the fsc were less the numbers would change of course but at an fsc of 8cpm or higher the 60% side comes out ahead. The majority of runs have an fsc higher than 8cpm. Overall I believe there is an advantage to being the 60% side.

Leo
truck 4958

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

 

[Loose_Cannon47]

Nice example, Leo...Thanks for the info...

Loose

 

[ATeam]

If you are starting out in expediting and you are not in your own truck, it would not likely be an employer you'd start with but a fleet owner. Your fleet owner would be a contractor with an expediting carrier. You would be an independent contractor with your fleet owner and also approved to drive with your fleet owner's carrier of choice. The 60/40 split with 60 going to the driver and the driver paying fuel is common.

That said, there are a few fleet owners that run teams on the 40/60 split with 40 going to the driver and the fleet owner paying fuel. And there are even a few (very few) that hire drivers as employees and issue Form W-2s instead of Form 1099s to report the income to the IRS.

Independent contracting means, among other considerations, that you would likely be paying for your own health care and retirement beneifits (health insurance and retirement savings). That's something to include in your expediting v. current job analysis.

Without going into the numbers, I can say I've personally met four former RNs that are now expediters, each driving team with their husbands. None of them expressed the desire to return to nursing.