Percent pay @ Landstar vs Schneider Choice

the 2 per cent is a insurance surcharge. at mercer it is 1 per cent , then we get 75 percent of the 99 per cent. but that is only on the actual freight charge, the accessory charges, fuel surcharge, etc are seperated out and paid at 100 per cent charged. it is all shown as such on our pay invoice.

there is a 2 percent insurance surcharge a LS then the current flatbed get 73 per cent of that. that is what a friend of mine that just leased with landstar informed me 2 weeks ago.

one thing many dont remember to look at is the seemingly tiny little items, like are fax fees reimbursed when hauling oversize loads, are tolls reimbursed when an o/s is routed on a toll road, are you charged any fees for use of the phone systems , who orders the permits when hauling oversize? when special needs such as police escorts are needed who pays for that, many times things such as that end up coming out of the trucks percentage. what does trip pak cost if you send settlements etc.

at Mercer our faxes fees and tolls are reimbursed , tolls are reimbursed, and all other special costs are covered on oversize. tp pak in cab scanning is 8 cents a page, before in cab it was 6.00 a month for envelope trip-pak, on a load say to newfoundland, the ferry costs are paid. when we get an oversize, we call , give a preferred route and the office orders permits and sends them, we dont have it in the truck pay to pay ourselves.

sometimes the small costs add up more than some realize, and are often overlooked when guys sit around and compare their leases.

 

I believe the point he's attempting to make (and BBB is more than capable of making it himself) - is: WHAT VALUE are you getting from LS (as a dedicated lease-on under their authority) under 67% of 98% contracted rate? F2F doesn't operate under THAT rate, as they are their own authority. F2F - from what I hear - provides VALUE IN RETURN for the percentage their lease operators sign on under.

Apples to Apples (even though it never really is) - 67% of 98% of a $1,000 load comes out to $656.60. If you were an MC, getting the same load - you would get $1,000. Or under a carrier that gives you 80%, $800. What is LS giving you IN RETURN FOR the 69% (67 + the 2 you give up at 98)? On a load by load basis, it doesn't look like that much. It would probably be MORE PROFITABLE in the long run - to pay for you own MC, your own insurance, your own tags and do your own compliance paperwork (IFTA, FMSCA, etc.).

I haven't heard BBB slam LS, just question the "value" of the 67-of-98 lease contract...

Nor am I "slamming them" - personally, I'm curious myself of the "cost benefits" of this arrangement - similar to what skateboardman outlined.

Rick

 

The skimming problem is from Indies getting skimmed by Brokers, much more than O/Os being skimmed by their Carriers. The regs are in place to keep the Carriers from abusing their leased O/Os. Unfortunately, there are people like your own Rolling Coal that won't read those regs to protect themselves. For years I have encouraged people to read and become familiar with those regs. No need to memorize them, just be familiar.
This is something I learned early in my career, from none other than an employee of the old Interstate Commerce Commission. The very people that wrote those regs.
As to your outfit being a cheat, I didn't say you were, but I do say not to take your word on everything or anything. The same as I say for every Carrier. I put full trust in none, not even my own, even after being with them for 15 years.
As to business and fleet experience, been there, done that. Had the Motor Carrier number, it was even old enough to be issued by the ICC, long before the FMCSA even existed.

 

If you're happy with it, go for it, but watch your butt, is all I'm going to say. I've seen a lot of those deals, over the years. I'll stick with the outfits that have a very established history and sound financial footing.

 

I am very consistent with my criticism of what I, and management at LS, have. Van freight has been cannibalized by the new breed of bottom feeder agents that LS brought on several years ago. They found it was much easier to sell a current LS account with a lower rate than find new freight. So that good paying load has switched agencies several times. Each time at a lower rate.

Additionally you have agents that prey on new, struggling BCO's by offering to "dispatch" but getting freight from load boards.

But we all appreciate your expert opinion. Tremendous value you are providing here.

 

I knew that regulation already - it wasn't earth shattering news.... Some guys just aren't cut out to run their own authority or burn out or whatever. If you're happy at Landstar I'm happy for you.

 

I currently work for bill have been with him since the 21 of may. I can tell you he nor his company has hidden any thing from us and believe me we done our homework. I was set to go to ls but changed due to the percentage and rollin coals experience with bill and a lot of research. Nothing bad to say about landstar either it just boils down to revenue and and a good working environment. And we have both with bill.

 

First off, let us get the math correct. On a LS load and a LS load only, the Broker Carrier does not get 100% of any loads brokered to them. Most of the time, they don't even know what the gross revenue is, only the revenue quoted by the Agent, to them.
Using your $1000 load to a Broker Carrier, that load would be in the area of $1250 gross. Loads are generally brokered out at 80% of gross, on a flat rate. The Agent can play with that 80% figure a little, but not much. One thing the Agent can not do is get into LS's part of that percentage. They can give away their whole commission, if they want to, but none of LS's. BTW, the original Freight Bill, which LS gets paid on, is not provided to the Broker Carrier.
Now for my percentages, which is a bit confusing until you get used to it. Of that $1250 gross, part of that includes the fuel surcharge and any accessorials. As any mileage figures were not provided, we will use a percentage for fuel surcharge. This particular week, the standard fuel surcharge is either 46 cents per mile, or 28% of the gross. 28% of $1250 is $350, leaving $900 for the linehaul, unless there are any other accessorials to be broken out. In this case we will assume there are no other accessorials.
My 67% of 98% linehaul, to the tractor and 8% of 98% linehaul to the trailer, equals 73.5% of 100% total of the linehaul. We'll compare the pay to both tractor and trailer, as that is the same as the Broker Carrier is being paid for.
73.5% of $900 is $661.50. Add the fuel surcharge, $350, to the linehaul, $661.50, and you get $1011.50 to the truck and trailer.
Now, we'll do this with a mileage figure. We will assume that is a $2.50 per mile rate, on 500 miles, for a total of $1250. Using this week's standard mileage fuel surcharge of 46 cents per mile, the fuel surcharge would be $230. $1250 minus the $230 fsc would leave $1020 linehaul. 73.5% of $1020 equals $749.70 linehaul to the truck and trailer, plus the $230 fsc, gives me $979.70 total revenue.
BTW, per LS policy, an Agent can offer the percentage fuel sucharge on loads, instead of the mileage surcharge, which I have had them do on loads that I had interest in, but the money to the truck wasn't quite there.
As you can see, there is not a heck of a lot of difference in the revenue to either truck. However, unlike the Broker Carrier, I do not have public liability and cargo insurance payments, or other various expenses required to remain compliant to regulations, as that stuff in covered in the percentage of the revenue to LS.
Now, if a Broker Carrier, gets a load from a different broker and I book a similar load from an Agent, that got the load from the same broker, there is a heck of a difference. It would be very lopsided, as the Broker Carrier would not have the revenue split with LS, but I still would. In that same vein, keep in mind that although a Broker Carrier may get a load through a LS Agent, that load may not go through LS, as there are some LS Agents that fly more than just the LS banner. There are a few that have their own brokerage authority and run loads to Carriers through that authority, rather than LS's.
As to other values, of my contract. Broker Carriers are limited to hauling loads of $100,000 or less value. I am not. There are customers that specify in their contracts that their loads are not to be brokered out. Comparing the LS Broker load board to the LS inhouse load board, the broker board only has, on average, one quarter to one third of the loads listed on the inhouse load board. There are some shippers, mainly in the defense industry that will not deal with an Independent or small carrier. My money for loads hauled, is guaranteed, whereas an Independent does not have that guarantee.

 

As to the 2% off the top of the linehaul, to LS, in my contract, why would I care about that? What counts is the revenue to my truck and trailer, not how it was derived or split out. As I've stated before, don't get all tied up comparing percentages, look at the revenue to you.