If a load was say 1000 miles, deadhead at 30% was 300 miles on that trip, no tolls on this one.. the compensation would be $1716. Divide by the 1000 loaded miles, the rate is $1.716/LM.
How would that compare to the Fedex percentage system?
It may be better to ask, how would that compare to how some percentage contractors deal with deadhead miles?
It has been stated many times in the Open Forum over the years, by some percentage contractors at least, that deadhead miles are not an issue at all because we price all miles the same. While the point has been repeatedly made, it also seems to be repeatedly missed.
Example (once again). Diane and I are offered a load that includes 200 miles empty and 1,000 miles loaded. The empty miles are the "deadhead" from our present location to the pick up. The 1,000 miles are the distance from the pick up to the delivery with freight on the truck.
What does the deadhead pay and what does the loaded pay? That is not even considered. We ask only, what does the run pay per mile?
To determine that, we add 1,000+200 to get the answer. It is a 1,200 mile run. We then look at the money being offered. If the pay is say $1,200, the run pays $1.00 per mile. If the pay is say $2,400, the run pays $2.00 per mile.
We accept or decline a run based on the per mile rate calculated as above. In a very real sense, there are no deadhead miles or loaded miles in any run we do. There are only miles.
A run that had 200 miles empty and 1,000 miles loaded would be viewed exactly the same as a run that had 1,000 miles empty and 200 miles loaded.
Our cost to drive a mile is the same no matter what you call it. We look at the miles and then the money, and then decide whether to take the load or not.
Flat rate contractors who say they get all miles paid are telling us nothing new. Diane and I have been getting all miles paid on every load since 2003 when we started driving.
True deadhead miles would be something like driving home at our own expense, going out of service to drive to a truck show (also at our own expense), or driving 300 miles to get to a trusted truck dealer (or any distance to any dealer for that matter) for service work. We don't get paid for such miles and flat rate contractors do not either.
Another example would be driving at our own expense from say Denver to Kansas City to better position oursleves for freight after finding Denver slow.
In the past, we almost never did such a thing because we almost never had to. There were enough great loads out there that we could afford to wait in Denver for something to bubble up hundreds, or even over a thousand miles away.
The introduction of flat rate trucks with preferential dispatch into the FedEx Custom Critical fleet has changed that. We no longer have the luxury of taking loads into remote areas because the flat rate trucks are getting the great loads that used to bubble up and get us out.
While we are adapting to that by staying east (where we won't have to drive anywhere to be close enough to active freight) our approach to deadhead remains exactly the same. We get paid for all miles because we only accept runs that pay well enough to profitably fund all miles.
