Success Leasing and Fuel Surcharge

As an independent contractor, you only run as much as you want. Dispatchers are paid a small base, and commission based on your productivity. Its in their interest to keep you running. Reimbursement is 72% of linehaul, 100% of paid fuel surcharge, plus accesorial payments (detention, etc.) You really have to be on top of your game to make the solo gig work. Teaming/training is easier to make $$ with. Prime does guarantee that the MINIMUM you will make (as it stands now) is 95 cpm - amortized every 100,000 miles - that's a floor, and not a maximum - which is based on the percentages.

Fuel surcharge is based on the previous weeks' fleet average fuel cost, and I'm not sure exactly what the base rate is, being a company driver - although I may be heading the lease direction when I turn my current truck in. However, whatever a shipper can be convinced to pay in terms of fuel surcharge is passed onto the contractor. Have heard of cases where the entire fuel bill is paid for "hot" loads to entice drivers into taking some of them.

 

Pony, I have been reading all of your and U2 posts for some time. I too am a company driver wanting to go L/O. But when I read all the negatives why would I. We do the same work as a L/o but they have much more financial risk.??????
I can and do stay out months at a time. Home time since July 09 has been 2 days, by choice.

 

how do "we" know what the "line haul" is?

 

The usual reason is the "freedom" associated with being an L/O. In good times, assuming one IS a good businessman, it is feasible that one would make a good deal more than a company driver. If you don't approach it the right way, you can loose your you-know-what.

That's the fee that the company agrees to haul the freight for - L/Os get 72% of that. Contrast that with say Landstar - the driver only gets 65% there. Per the FMCSRs, any company that pays drivers on a percentage basis must allow the driver to inspect any of the original documents pertaining to a freight contract they hauled, at the carriers principle terminal.

 

I've never fully understood this. An O/O? Sure, I guess there's a lot of freedom there. But a L/O at Prime doesn't seem to have a bunch of freedom. I mean what exactly do they get?

They can fuel wherever they want...and pay for it.

I don't have to worry about fuel costs. Anytime I've had to fuel out of a designated fuel location a quick QC message with the # of gallons I need takes care of it.

They can go out of route whenever they want.

So can I. Might just be my specific dispatcher.

They can bobtail out of the terminals.

A nice benefit for sure. I miss being able to do this. but a benefit that is hardly worth the risk involved with leasing.

They can have a pet on board.

I suspect this is why a big number of people are currently driving lease.

They can choose when and how long they stay home for.

Can they really? Just about every lease driver I've met stays out just as long, if not longer than I do in order to make ends meet.

The biggest thing lease drivers have going for them right now, is they aren't forced to drive a little toy truck like the company drivers are being pushed into. Again, hardly worth the risk of leasing when hundreds of other companies are out there that will give you a normal sized truck if you don't like the way Prime is doing things.

I've tried adding up the numbers financially, and I just don't see the benefits. During a good economy things might be different. But right now, it doesn't make any sense to me. It seems like the company wins all the way around. They are putting 100% of the risk on the driver. If the truck doesn't make money, the driver bears the cost, not the company. Why is it that companies who are in financial trouble, like KLLM, are doing everything but forcing their drivers to lease? If KLLM made more money off of company drivers, wouldn't it be the other way around? Just sayin'

I wonder how many lease operators are teaming / training because they have to, not because they want to. Another win for Prime. A stat that was recently given by Prime in a recent court hearing stated that in order for a solo lease operator to turn a profit, he or she needs to run an average of 2500 miles per week. I know, I know. Lease ops are paid by percentage of load. I'm simply stating what Prime themselves said in a court hearing under oath. It's no wonder solo ops have trouble making it! And another good reason they rarely go home!

Bottom line is the lease ops I talk with always seem to be stressed out and on edge, while the company drivers are pretty much laid back and happy with things (myself included). Don't get me wrong, I've met some solo lease ops who claim to be doing well and act like everything is great, but that's not the majority.

I don't mean to bash lease ops or turn this into a company vs. lease debate. I respect everyones decision. I just truly don't understand the draw to leasing, especially for solo drivers like me who aren't interested in teaming / training. If I could make a whole heck of a lot more money leasing, I'd seriously consider doing it. But the numbers just don't add up. Nobody has been able to explain to me why leasing is such a great thing.

For now, I'll keep putting money into the bank as a company driver, and maybe in several years, if I decide to do so, I'll purchase my own truck.

 

TruckerMike...mind if I ask, on average, how much money ARE you putting in the bank per week? Im not trying to start an argument, Im genuinely interested. I drove company for prime for a while before I leased and never really made that much money. I started leasing and my money went through the roof. I was home about every three weeks. I started training and really started making great money then. Still home about every three weeks.

just curious.

 

Ironpony, was wondering if you were still considering L/O? I just listened to the March Prime CD and they appear very optomistic about the L/O program. Based I suppose on the idea that there could possibly be a driver shortage, Im still waiting and watching.

 

We're running our butts off... it's not stocking the trucks in case of not enough bodies being available. New and expanded business. Heard Kevin Rutherford talking about the freight demand index being nearly at the point it was in 2006 - it's taking off now. And yeah, I'm getting the itch to do it.

 

DO IT, Ip! Jump on over to the Dark Side!