Carrier Settlement Structure Preference

[VTurri]

Greetings EO,
In reading the forums we all get to see the many differentways carrier’s structure settlements to their contractors. I have determinedthere is four main settlement structures being employed:
1. Flat per mile amount and the FSC, example: $1.50per loaded mile plus 100 FSC
2. Percentage of the line haul plus fuel, example:65-68% of the line haul plus 100 FSC
3. Flat “all miles” paid model, example: $1.40 amile dead head and loaded
4. Flat percentage, example: 75% of the gross truckrevenue
There may be differences as far as assessorial payouts, deadhead pay, QC fees, escarole etc. But taking these things variables out of the equation, whatpay scale principle do you like best and why?

 

[tenntrucker]

I prefer some type of percentage. Seems fairest all around. If my carrier has to take a hit on rate to move me, we're in it together. But if they hit it out of the park on a rate, I'm there too. But you have to look at the big picture, for me it how much did I make per mile for all mile driven for the week.

sent from my Galaxy S3

 

[davekc]

We do both so there are pluses and minuses for each depending on the loads you have and how those numbers are verified. My nod would go to percentage if a copy of the rate sheet is with each load. If not, how does one know what the percentage is based on. 100 percent of zero is still zero.
Mileage based is just that. Then it depends on what the rate is. I am mindful there are some outfits out there that think $1.05 is a great rate for straight.

 

[Turtle]

Being in a Sprinter, my nod would go to any of the available options in the poll, and I'd be giddy giddy happy with any of them.

 

[jjoerger]

We are on percentage plus FSC.
However, we call it negotiated compensation. If the rate offered does not meet our requirements we ask for more money and if none is forth coming we do not do the run.
We do not expect to hit it out of the park on every run but it sure is nice when a really good paying load is offered. And we will occasionally do a run for a little less if it takes us to a good area.

 

[Deville]

on certain loads I would charge by the weight. Anywhere from .1 to .3 a pound. These are heavy loads. That's how I would charge for airfrieght transfers. You pick up a couple of cans that weigh 10-15 thousand pounds each & are going from terminal to terminal or under 25 miles roughly that's a home run any day, every day.

 

[VTurri]

We do both so there are pluses and minuses for each depending on the loads you have and how those numbers are verified. My nod would go to percentage if a copy of the rate sheet is with each load. If not, how does one know what the percentage is based on. 100 percent of zero is still zero.
Mileage based is just that. Then it depends on what the rate is. I am mindful there are some outfits out there that think $1.05 is a great rate for straight.

As a carrier that advertises here on EO I would be very leery of sharing confidential client information and rate confirmations and I am sure I am not the only one that feels that way. Does any carrier that pays on a per mile basis pay you on what the odometer reads? There is potential in every program for falsification, the good carriers will be honest and reputable in order to retain the trucks in their fleet. What about FSC, how do you police that? I could go on and on. Also a lot of fleet owners have their own authority, who’s to say they would notback solicit accounts and open up their own company knowing what rates to beat and where to get the business. I have had people lease to my company in the past in order to gain information for competitor startups! Carriers spend big bucks soliciting new business, some customers are not as loyal as they use to be.
I understand your concern Dave, that being said I am just sharing the carrier side of this scenario; at least my take on it. At the end of the day what matters is what the contractor is making per mile loaded and empty. If a carrier is not paying well, then they will not retain their contractors. What I have found is carriers often pay above the contracted rate versus shaving revenue from contractors. As many have already said, they tend to negotiate or won’t haul the load. I wouldn't hold it against a carrier if they guarded that data. Money talks.... or should I say the settlement check.

 

[zorry]

I thought, under the Truth-in-Leasing act you are required to show a copy of the freight billing if you pay percentage and are asked for it.
You would be able to block out confidential information.

 

[Murraycroexp]

I think that's right. Proactive companies, keeping their customer list secure, should show load #, base $, FSC, other assessorials, and total revenue. Any additional info isn't required and increased the likelihood of load undercutting theft by unscrupulous drivers.

 

[VTurri]

It was explained me by an attourney it had to do with lease purchase programs.




Sent from my SAMSUNG-SGH-I717 using EO Forums mobile app

 

[zorry]

It was explained to me that it's required anytime you pay percentage.
Which seems reasonable.

 

[mjmsprt40]

I'm paid per mile plus FSC. The carrier I drive for uses a pre-set mileage, usually it's slightly more than the miles I actually drive though one trip I make on a semi-regular basis is usually a trifle short (360 miles paid, it comes out a little over at 368).

I drove for a carrier that used my odometer, I actually made less with them than with this guy even though he pays less per mile + FSC. Reason: As stated, usually their calculating system figures more miles than it actually takes.

 

[davekc]

As a carrier that advertises here on EO I would be very leery of sharing confidential client information and rate confirmations and I am sure I am not the only one that feels that way. Does any carrier that pays on a per mile basis pay you on what the odometer reads? There is potential in every program for falsification, the good carriers will be honest and reputable in order to retain the trucks in their fleet. What about FSC, how do you police that? I could go on and on. Also a lot of fleet owners have their own authority, who’s to say they would notback solicit accounts and open up their own company knowing what rates to beat and where to get the business. I have had people lease to my company in the past in order to gain information for competitor startups! Carriers spend big bucks soliciting new business, some customers are not as loyal as they use to be.
I understand your concern Dave, that being said I am just sharing the carrier side of this scenario; at least my take on it. At the end of the day what matters is what the contractor is making per mile loaded and empty. If a carrier is not paying well, then they will not retain their contractors. What I have found is carriers often pay above the contracted rate versus shaving revenue from contractors. As many have already said, they tend to negotiate or won’t haul the load. I wouldn't hold it against a carrier if they guarded that data. Money talks.... or should I say the settlement check.

You are talking two different things. I understand the carriers position on wanting to keep proprietary information from drivers or a competitor.
That is much different than the legal side of what is required under the "truth-in-leasing' regs.
There you are required to show your rate sheet to a driver if it is requested.
Sometimes it may be necessary when descrepencies arise.
You are correct though, it is about the revenue. You just hope that you can have a relationship that is built on trust. If not, then the parameters of the business relationship will be different.

 

[Turtle]

You are talking two different things. I understand the carriers position on wanting to keep proprietary information from drivers or a competitor.
That is much different than the legal side of what is required under the "truth-in-leasing' regs.
There you are required to show your rate sheet to a driver if it is requested.

Yup. 49 CFR 376.12 covers the written agreements of a lease, and is quite specific. It states that compensation for both the equipment and the driver's services be spelled out in the lease, such as flat rate, percentage of the gross, per mile, or variable rate based on commodity hauled. It also states that if compensation is based on a percentage of the gross revenue, that the carrier will give the contractor (the owner of the equipment), either before or at the time of the settlement, a copy of the rated freight bill (what the customer is charged, including everything, everything) or a computer generated document containing the same information. If it is in the form of a computer generated document, the contractor has the right, during normal business hours, to view a copy of the actual, original document from which the computer generated information came. If the customer is billed anything separately, that has to be provided, as well.

However, regardless of the method of compensation (percentage, flat rate, per mile, etc.,), the lease must permit the contractor to examine copies of the carrier's tariff (what the customer is billed) or other documents from which rates and charges are computed. The carrier can delete or black out the names of shippers and consignees shown on the freight bill or other form of documentation, but the paying customer to whom the charges are billed is not to be deleted, since that information is contained on a rated freight bill and is required for verification of the billing.

This information can be found at:

The FMCSA's Web site;

The Government Printing Office Code of Federal Regulations;

The Cornell University Law School CFR Database;

 

[zorry]

Thank you Turtle for the explanation.

 

[zorry]

VT- How good is that lawyer ?

 

[tenntrucker]

You are talking two different things. I understand the carriers position on wanting to keep proprietary information from drivers or a competitor.
That is much different than the legal side of what is required under the "truth-in-leasing' regs.
There you are required to show your rate sheet to a driver if it is requested.
Sometimes it may be necessary when descrepencies arise.
You are correct though, it is about the revenue. You just hope that you can have a relationship that is built on trust. If not, then the parameters of the business relationship will be different.

Trust is everything, when you lose my trust........its time to go!

sent from my Galaxy S3

 

[VTurri]

VT- How good is that lawyer ?

Which one...lol

I got some clarification this morning. Most of the case law on this subject is related to lease purchase agreements. I never had an issue where that I needed to consult legal. Our contractors are content and there is a high trust level between us, and we do share a lot of data with them to insure thier success. Our TMS Sylectus has great tools for keeping the O/O engaged and knowing how profitable they are. The more money they make, the more the company makes! That's our motivation.

I am glad I started this subject, thats the beauty of EO. Its a great resource for all! What's sad is many of you know this law inside and out, which speaks for some of the carriers out there in our industry and how they do business.

 

[letzrockexpress]

Seems to me all of you have made a great case for some sort of flat rate per mile. It makes everybody as honest as possible.

 

[OntarioVanMan]

I am glad I started this subject, thats the beauty of EO. Its a great resource for all! What's sad is many of you know this law inside and out, which speaks for some of the carriers out there in our industry and how they do business.

But then again..it goes to show the level of knowledge some have thru the whole entire industry...not just surface issues..of...where is my paycheck?.....LOL