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Carrier cutting rates

Steady Eddie

Veteran Expediter
Owner/Operator
Offline
E1 did use the Mid west average which is the 2nd lowest in the country where Fedex uses the National average....

also E1 rounds off to the next LOWEST whole number...so if the FSC is say .259 you'd get .25...they keep the .009 cents in essence you never get 100% of the FSC

Yes midwest average and yes to the rounding down...


Now what if, ( if-lol), they bill the customer the national average and give us the midwest average. Another thing is you never get 100% of what is billed to the customer, only 100% of what they say you get.

1 customer may be billed @ .04 per mile based on contract
1 customer may not pay anything based on contract
1 customer may be billed .40 per mile based on contract

That is the problem. I want each run to stand on it's own. If I agree to take the load paying the .04 fsc, then that's fine. I agreed to it.
If I truned down a load that has no fsc, that's fine too.
When I took the .40 per mile fsc @ 1.05 that was a great run, and a good and fair rate.

The reason I was given for going to this fsc was, you get a standard fsc every week and should come out better due to some customer only paying the lower amount.

I think the true reason was drivers would not run for those customers that would pay no or low fsc. E-1 trundown's and selling those loads were high. The customer that paid the higher fsc would off set those that didn't.

Today if I run a load that pays a high FSC I do not see 100%, never will now.
If I run a load that pays Low FSC I see my other half of the customer that paid high FSC. If I don't, some other driver see's it. I could care less what the average is, pay me 100% of what is billed.
 

Steady Eddie

Veteran Expediter
Owner/Operator
Offline
Now, with that said-


Uncertain and confusing times are the real test of a CEO's leadership ability, writes Scott Eblin. It's important to communicate clearly, to be honest about known unknowns and to avoid disconnecting when the going gets tough. "In the absence of clear and relevant communications from you and with you, people are going to fill the vacuum with stuff they're making up. You don't want that. Stay engaged," Eblin advises
 

Turtle

Administrator
Staff member
Owner/Operator
Offline
For about 4.5 years of the time I was with Panther I had the option of staying with the variable-rate FSC (some customers paid high, some paid low) or the structured FSC. I stayed with the variable. That means I took many loads that paid a crappy FSC, but I also took many that paid well above the structured FSC. There were more that paid above than below. In the end I came out far ahead of the structured rate, by about 9 cents per loaded mile over the course of a year.

That changed when they gave me a "raise" by paying for DH. The variable-rate FSC dropped like a brick. It was still variable, but it only varied from whatever the structured rate was... downward. Never above the structured rate. Not once. My overall rate for all-miles dropped 4 cents. Some raise. <snort>
 

blizzard2014

Veteran Expediter
Driver
Offline
It's the drivers fault really. Everyone keeps on bying into this economic crap and carriers know that drivers will run for cheap just tp keep the wheels turning. They will continue to capitalize on this for a long time to come. When will the drivers say enough is enough to all of this cheap freight? I'm not running my van for 85 cents anymore. I'm done with all of that. If I can't at least get 95 cents to a dollar a mile "all in" I'm not even going to be a part of this business anymore. If you aren't at least making a dollar per loaded mile you're slowly going bankrupt. I had two loads for my van and driver this week and one of them was for 74 CPM all in. I'm not going to mention what company my driver got the load from, but it made my decision to pull the plug on the multi-carrier model that much easier. I guess a bunch of vanners are going to be leaving the industry real soon.
 

Rocketman

Veteran Expediter
Offline
Even $1/ mile is cheap on some loads...depending on where they are going. With fuel prices up again and now insurance jumping... your right, there will be some people realize that they are working for free. At least you would think they would realize it....I'm not so sure.
 

jimlookup

Seasoned Expediter
Offline
We (as is the whole economy) are under attack by "increased productivity" and "comprehensive reform" When you hear either one of these terms you had better cover your butt. Translated they mean more work-less money, fewer jobs, shrinking middle class and less sales-more profit.
 

bernieh48

Veteran Expediter
Offline
I have stayed out of this conversation until now. First off Dave is wrong. Panther's lowest straight truck team rate is not $1.25. The lowest I know of a friend of mine is getting contracted rate for a team is $1.10 per mile.
With that being said we left Panther in Jan. to come to E1. Are we happy with the lowered rate? No. We are drivers for a fleet owner. We went from making the 60% rate and paying for fuel when we were with Panther to making 40% and we pay nothing. We did good in Jan. and AWESOME in Feb. Now we start this month on the new rate. I have been figuring each load as we go to see the difference in what we would have got before and what we are getting now including the new dead head pay to the pick ups. We have done 4 loads so far this month. All loads have been around the 650 mile mark. Total loaded miles were 2,650. When I figured in the dead head pay and the loss of loaded pay per mile we were at a loss for all 4 loads. Our total loss just as drivers was $71.81 in those 4 loads. Not much for us but I have to wonder how this will affect a big fleet owner with all their costs. Our owner had a major conference call with all his drivers at the same time and said he will give it 2 months too see how their " more miles" promise is proven. So far based on what we have seen I would say that more mile promise is for the birds. My only issue with staying with him is he has trucks that don't have break down issues. We have had the last 3 years of bad trucks with break down issues and are just now making money again. Even with the lower pay rate we are still taking home around $1400 each week to our pocket just as drivers. When we talked with recruiting at Panther before when looking for a truck to drive that doesn't break down they point blank told us that most of their fleet owner are staying with the older pre emission type trucks and having lots of break down issues. So as a driver we can't make any money being in the shop all the time. So for now I guess we stay and see how it all works out.
 

Steady Eddie

Veteran Expediter
Owner/Operator
Offline
I have stayed out of this conversation until now. First off Dave is wrong. Panther's lowest straight truck team rate is not $1.25. The lowest I know of a friend of mine is getting contracted rate for a team is $1.10 per mile.
With that being said we left Panther in Jan. to come to E1. Are we happy with the lowered rate? No. We are drivers for a fleet owner. We went from making the 60% rate and paying for fuel when we were with Panther to making 40% and we pay nothing. We did good in Jan. and AWESOME in Feb. Now we start this month on the new rate. I have been figuring each load as we go to see the difference in what we would have got before and what we are getting now including the new dead head pay to the pick ups. We have done 4 loads so far this month. All loads have been around the 650 mile mark. Total loaded miles were 2,650. When I figured in the dead head pay and the loss of loaded pay per mile we were at a loss for all 4 loads. Our total loss just as drivers was $71.81 in those 4 loads. Not much for us but I have to wonder how this will affect a big fleet owner with all their costs. Our owner had a major conference call with all his drivers at the same time and said he will give it 2 months too see how their " more miles" promise is proven. So far based on what we have seen I would say that more mile promise is for the birds. My only issue with staying with him is he has trucks that don't have break down issues. We have had the last 3 years of bad trucks with break down issues and are just now making money again. Even with the lower pay rate we are still taking home around $1400 each week to our pocket just as drivers. When we talked with recruiting at Panther before when looking for a truck to drive that doesn't break down they point blank told us that most of their fleet owner are staying with the older pre emission type trucks and having lots of break down issues. So as a driver we can't make any money being in the shop all the time. So for now I guess we stay and see how it all works out.


Well, hold on to your lugnuts. It has not worked in the past, (cut rates increase miles
). Define insane- doing the same thing over and over and expect different results?

Or- If it aint broke, keep fixing it until it's broke.

I do wish you luck. All of us.
 

Steady Eddie

Veteran Expediter
Owner/Operator
Offline
bernieh48

Based on your numbers and using 12 loads a month, comes to $2,585.00 per year less.

$18.00 less average for your 4 runs this month, if you do 12 loads, $215 less average per month X 12 months, = the 2,585.00....

The 12 loads- 0.4 your average for 10 days this month X 30 day month=12
 

bernieh48

Veteran Expediter
Offline
Oh I know it comes to less per year that's why we are just going to wait and see. We have been in expediting for 18 years now so we know the business and how things can change both for the good and the bad. I still miss the good old Robert's Express days. :(
 

Steady Eddie

Veteran Expediter
Owner/Operator
Offline
Oh I know it comes to less per year that's why we are just going to wait and see. We have been in expediting for 18 years now so we know the business and how things can change both for the good and the bad. I still miss the good old Robert's Express days. :(

Why wait? Hoping like the rest of us, that somehow it will get better. Your loss will go up with more miles. Your fleet owner may not wait. I don't know how many units he has with E-1, X one trucks loss by that number, he will not wait long.
 

bernieh48

Veteran Expediter
Offline
Our fleet owner has said he will give it 2 full months before he decides on whether to leave or not. And as for us. With the amount of junk truck out there with fleet owners there's not much choice.
 

jjoerger

Veteran Expediter
Owner/Operator
US Army
Offline
Fedex bumps pay for liftgate loads,hazmat,etc.
I don't know the particulars as nobody I know has given up the % program to go to the flat rate program.
We went from percentage to flat rate for 6 months. Then to Landstar for 8 months and now back with FedEx for 6 months on percentage.
You do get a little bump for extras but not much. It's a good program if you just want to run miles. But hard to maintain a quality truck at those rates. We prefer percentage. Drive less, make more!
 

westmicher

Veteran Expediter
Offline
We went from percentage to flat rate for 6 months. Then to Landstar for 8 months and now back with FedEx for 6 months on percentage.
You do get a little bump for extras but not much. It's a good program if you just want to run miles. But hard to maintain a quality truck at those rates. We prefer percentage. Drive less, make more!

I think working on a percentage must be much better. Seriously, if a load pays less, then the carrier shares the pain. If a load pays more, everyone shares the gain as well. Why should the owners & drivers take the full hit of lower rates while the carrier just takes advantage of (supposedly) having more competitive rates? If the carrier has skin in the game as well, the owners & drivers can know much better that the carrier is working for everyone to get the best rate for every run. I think percentage based carriers are clearly working for owners & drivers MUCH more earnestly!
 

usafk9

Veteran Expediter
Offline
I think working on a percentage must be much better. Seriously, if a load pays less, then the carrier shares the pain. If a load pays more, everyone shares the gain as well. Why should the owners & drivers take the full hit of lower rates while the carrier just takes advantage of (supposedly) having more competitive rates? If the carrier has skin in the game as well, the owners & drivers can know much better that the carrier is working for everyone to get the best rate for every run. I think percentage based carriers are clearly working for owners & drivers MUCH more earnestly!

Per centage is better for us, but often, in their efforts to 'buy the market', our carrier offers loads that are ridiculously cheap. I don't fault them for doing loss-leaders, as they are real good at keeping us busy. Most times, they also know that I'm going to have to get more than my 60% for our one-truck operation to stay profitable. However, there are times when their 40% is large, and (I'm guessing) that it all evens out. We trust that they do whatever they can to keep us loaded, and they trust that we pickup and deliver timely, and use our money judiciously in keeping our equipment maintained well, or replaced. It's worked well for us.

While I don't have a dog in this E-1 battle, I know folks that are/were leased to them. After doing some of our own loads that pay us (and FedEx) REAL WELL, I often wondered how an E-1 truck would feel hauling that same load for their exact same, contracted rate.

Sorry for your pain, guys....really. The phrase that keeps rolling through my head as I read these posts, is "race to the bottom".
 
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