Long Haul Trucking Paying 90%......REALLY?

Well, 90% of gross is rather basic. What do their loads pay? And how much is the FSC? How much deadhead is involved? Do you pay the cargo on loaded or all miles?

The $60, $150, $17.15 and $14 shouldn't be what makes or breaks you.

The cargo insurance seems astronomical. That is almost what I pay for all insurance in a year if that number is right.

Without knowing what their loads pay (even an average with average deadhead), it's hard to determine what their cut really is.

 

Really simple, you want it, or you don't. I have seen so much theft lately, go cheap, or get your product. No body has Security anymore, just like a grab, N go. Pay for it, or get it yourself. Sad.

 

This is why I always say don't worry about the percentage, worry about the rate. It doesn't bother me a bit to split 26.5% of the linehaul to LS. I don't pay public liability, or cargo insurance out of my split. LS pays it out of their's. FSC is 100% to me and accessorials are anywhere from 100% to 75% to me, depending on the accessorial. The Comdata card costs me a buck seventy five, each time money is loaded on it and a buck, if I do a direct deposit from it. PrePass is $2.50 per week and trip scanning is a buck per load. Scanning my logs is free.
Those high percentage contracts look good, at first blush. Then when you see the details, they aren't so wonderful. I'll stay with my lower percentage, lower cost, higher rate contract, thank you.

 

Actually your numbers are in line with what I pay ( but a little high ) and I don't pay for Q.C. or Trip Pak.

My numbers: OCAC $32.50 wk
Cargo .405........entered lded miles converted to dollars x.405
Comdata = the swipe chg like Loves $1.50 or mom & pop $.25 and n/c for 1 advance / week
FSC= None, get discounted fuel

These are actually costs they encounter doing business, they are just breaking them out for you rather than shield them in a fluff percentage.

I don't like the % thing in your deal because 90% of nothing is nothing. I smell a rat.....they are offering high % pay to attract which means a couple things, they can't get nobody or they can't keep nobody.........your mission: find out why!

Good luck,
JMO

 

Oh, and nothing wrong with analysis......

 

Is 2.09 the pay to the contractor or the gross pay? That number would be good if it was actual pay to the truck AFTER all the deductions. Let's assume 2.09 is the pay to the truck at 90%. If the OP's figure of 24% is correct, and they average 20% DH, which is reasonable for an open deck company operating east of the Mississippi, the rate per mile on all miles would be around 1.35/mi. You should be able to lock in this RPM for all miles pulling a van.

I tend to agree with Autocar that you are better to accept a lower percentage from a company with good rates, than you are to accept a higher percentage from a company with lower rates. Honestly, it is expensive to run a trucking company. In addition to the normal expenses that contractors are aware of, there is the overhead of a safety department, billing, payroll, legal expenses, collecting or writing off bad debt, securing freight, etc. In my opinion, a 90% contract is not sustainable over the long term unless the company is providing almost no services to the contractor. In addition, I would be wary of companies that are doing anything they can to put on more contractors in this type of environment. It is most likely to be a sign of low rates.

 

Exactly. This is why I tell people to not look at percentages alone. In the early to mid '80s, I was leased to a special commodities division of a large LTL carrier and got 65% to my truck and trailer. A good friend was leased to another company and got 70% to his truck and trailer and could not understand why I would not lease to them, also. One day we got together and compared rates and he saw why. My 5% less, in percentage, paid me more to the truck, plus my carrier had the ability to transport much higher value loads, with matching higher rates. Chickens are cheap, 55 gallon drums of liquid Tylenol are not, but both require the same equipment.

 

217,

Glad to see that you are breaking things out and comparing. I am a strong believer that percentage with a good carrier is the best way to go but you have to compare the differences between carriers to see what works for you. There are some on here that have a much better deal on mileage than they could ever find running percentage.

Couple things - First you are breaking it down to a percentage so that you can compare apples to apples, which is fine. But the challenge is that you really don't know what the rate is. And you need the average rate in order to do that. $100 per month if the rate is $2 is a different percent than if the rate is $2.20. But you are zeroing in and that is a good thing.

Second, advantage of a good percentage program is you can stop thinking like a mileage pay driver. You want to focus on better paying miles and run less miles or at least be able to run less miles and make the same or better money. But then again your percentages will change when you do that.

It seems that you are smart enough to have already figured out that you are paying for everything regardless if it is rolled into a percentage or broken out. Never let yourself be fooled like many that never do the math into thinking you are getting something for free or you don't pay for it. Only difference in what you are describing and other carriers is you see charges as a line item.

And yes, 90% of a bad rate isn't something to crow about. But it is better than 70% of a bad rate. And the key is the gross rate. And still do the math. What is a better rate? 67% of $2.50 or 90% of $2.10? Buy it is all academic if the company can't provide the rate.

Now what I don't like about what you have described is the company has a business model that is about sharing the risk (some thing that I like) but then they mark-up charges to the driver. If the insurance isn't marked up then they have some serious risk issues or they are not getting the miles (not really against that but they are dispatching you so that is an issue). Qualcom is marked up. Seems everything is marked up. Just that alone I would walk.