Percentage vs. Per Mile

G/MAN is spot on. If you lease on with a company that has owners who get paid all miles load and empty and also has owners who only get paid a percentage on loaded miles only - then guess who will always eat big deadhead on their own dime? Percentage is the best but only if the circumstances are right. If a company pays percentage and more or less says "it pays x amount - but no we won't show you what it pays - trust us" run for the hills. If a company is upfront with that information, as they are required by law since they're paying a percentage, then it just depends on if the freight pays well enough to make your cut worth - that would be if they have contract/direct. If you're working spot it comes down to how well can they or you negotiate, the rate will always be determined by you (or them but should be you - no-one will work harder or get more $$$ than #1) and how good you are at picking good freight from a world of bad freight. The more control you have, and the more upfront/honest whoever you're leased to is, coupled with a little trucking wits about you, the better off you'll be and the sky is the limit. You will work hard for higher rates, your workload will be more.. ..you just cannot expect that because it is percentage you can kick back, drive, and make $2+ a mile on all miles poulling vans, reefers, or flats. There are many on percentage who would really be better off in a flat rate paid for all miles for what the average. No-one gives away money out here for nothing. You will earn it if you can get it.

 

I used to work % with brokers pulling reefer, my income was vulnerable to fluctuations in freight rates and way too many monthly expenses;, reefer lease, insurance, plates,ifta, permits.........half a month work for bills; reefer loads used to be heavy, lots of west coast, heavy pulling,expenssive diesel, truck break downs. I'm doing better / mile with Celadon Canada, well my truck is paid off, I get 1.44/mile my only expense is fuel, truck repairs and 500$/year HVT pulling their trailer mostly flat roads ON to Laredo,TX and back,mostly auto parts, average weight maybe 20-25,000 lbs/ i'm getting average 8mpg on this route and buy the lowest price diesel, they pay ifta tax; Honestly i get clean about 85-95 cpm,after fuel, depends how much i'm burning, this is not much but steady and i'm happy.

 

When I have worked on percentage, I always knew what the load paid before taking it. I have always paid my drivers percentage. They also knew the rate prior to taking the load. They have also been free to speak with the shipper or broker and ask anything that they want. My drivers have always been free to turn down any load, since I pay percentage. Until the recession, my deadhead was at or just below 10%. It has been running higher the last few years due to the availability of freight and decent rates, although freight has picked up considerably the last few weeks. I have actually deadheaded as much as 50% a few times in order to service an account, but the rate allowed me to do the deadhead and still have a good rate. That is not always possible with current rates. And I don't usually deadhead that much. For the most part, I will still do better on percentage rather than mileage. Most carriers who pay percentage will have self dispatch, but not all. It takes more effort to find the better paying loads when you run percentage. When you run mileage, your primary concern is to keep the truck moving. More miles equal more pay. With percentage, you need to alter your thinking. You need to be more concerned with the rate and where you will land when empty. You don't want to take a cheaper rate to a bad freight area, only to have to deadhead out or take a cheaper rate to keep moving. When you run percentage, it is sometimes better to sit for a day than take a cheap load. It may also be more profitable to deadhead to a good paying load than to sit or take a cheap load.

There are some advantages to running mileage. The most important is that you are usually paid for all miles. Most mileage carriers are forced dispatch, even with those who have owner operators. You must be proactive when running percentage. There is an opportunity to do much better than mileage, but not everyone does better. Most should.

A carrier should be willing to show you the rate confirmation or other paperwork which has the rate. If not, then you may be with the wrong carrier. At the same time, you need to have a certain level of trust between you and the company for whom you contract or work. I don't think that all carriers are out to shaft their drivers or owner operators. Most of the time drivers fail to communicate with their company or don't read their contract before signing. I think that often it is a lack of communications which is the main problem between carriers and their drivers or owner operators.

 

My hubby use to get paid percentage. It worked out pretty good most of the time.

 

By, law you can request to see the freight bill.. And once again who cares what the company is making. You should only be concern on the percentage you are making.

 

ummmm, it's forced dispatch. do what your told or be fired. and since your just the driver. operating cost means nothing to you.

 

If you think you are getting ripped off, exercise your rights under the federal truth in leasing regulations and take a look at the original freight bill.

First, read the FMCSA regulations so that you'll know what you are talking about. Then walk into the corporate office on any business day during regular business hours and request to see the original freight bill. According to the federal regulations, they are required to show it to you.

This thread is in the "Ask an O/O" section of the board, which means if you are "just the driver" and "operating cost means nothing to you" then you are in the wrong section. An O/O needs to be more than "just" a driver, and if operating costs aren't a concern you won't be driving your own truck for very long unless you've got a huge bank account to support your hobby.

...and a company that operates under a forced dispatch scenario with its owner/operators runs the risk of finding itself at the losing end of an employee misclassification suit. Forced dispatch implies that the independent contractor isn't so independent after all.

 

Im confused on what you are saying? I have my own truck and had my own authority. NO force dispatch here!!! Sometimes from your post , i dont know if you are a company driver or owner op.

 

Not true in the least.

I'm just "the" driver and operating costs mean alot to me.

 

percentage is only good if you are getting true numbers

most times you are not

even at Prime, the load goes thru 3-5 hands before the driver sees it

with mileage, you are getting a "safe average", plus not getting "door to door" miles, but you get less deadhead