It is very disturbing to hear about the half-truths being articulated by certain carriers to those who are new to expediting.
For example:
1. "We pay a FSC (Fuel Surcharge)on every loaded mile even if the shipper does not pay us a FSC."
First, if their marketing department is so inept that they can not negotiate a FSC then one would have to be suspect about the loaded mile rates for which they also contract.
Second, many carriers pay a FSC that is simply a flat rate per loaded mile; for example: 15 cents per mile for a cargo van. That is a windfall for the carrier, because they get paid a percentage of the load rate as a FSC; therefore the paid rate to the carrier can range from 36 to 21 cents per mile (averages based upon my settlements). When a carrier pays a flat rate they are pocketing the difference. Look for carriers than give you 100% of the FSC.
2. “We pay 80 cents per mile for every loaded mile.â€
First, carriers like to tout those numbers, but the reality is that they seldom pay that rate.
So how do they avoid paying the advertised loaded rate?
When the new owner operator goes to orientation they are told that “Occasionally†they will be offered runs at a reduced rate with larger companies just to help (Aren’t they so nice) the owner operator keep the wheels moving.
Second, the owners that I have talked with who haul for these types of carriers are running about 90% of their loads at 10 to 20 cents less per loaded mile than the advertised rate with those carriers than utilize this technique.
Third, at $3.00 plus per gallon, just keeping the wheels moving is never a realistic justification for paying less per loaded mile than the rate the carrier advertised.
3. “We don’t pay supplemental mileage to reposition your unit.â€
First, when I started in this business I asked a recruiter if it would be possible to get some compensation for asking me to reposition my unit 200 miles away from my current location. He answer was, “We don’t supplemental mileage when you reposition your unit because we believe it is an investment in your future.â€
Second, my reply was, "Considering the cost of fuel and maintenance this is a business and not the charity of your choice.â€
To anyone considering becoming an owner operator the above listed examples are reasons enough to have a list of questions in hand when trying to make an informed decision.
For example:
1. "We pay a FSC (Fuel Surcharge)on every loaded mile even if the shipper does not pay us a FSC."
First, if their marketing department is so inept that they can not negotiate a FSC then one would have to be suspect about the loaded mile rates for which they also contract.
Second, many carriers pay a FSC that is simply a flat rate per loaded mile; for example: 15 cents per mile for a cargo van. That is a windfall for the carrier, because they get paid a percentage of the load rate as a FSC; therefore the paid rate to the carrier can range from 36 to 21 cents per mile (averages based upon my settlements). When a carrier pays a flat rate they are pocketing the difference. Look for carriers than give you 100% of the FSC.
2. “We pay 80 cents per mile for every loaded mile.â€
First, carriers like to tout those numbers, but the reality is that they seldom pay that rate.
So how do they avoid paying the advertised loaded rate?
When the new owner operator goes to orientation they are told that “Occasionally†they will be offered runs at a reduced rate with larger companies just to help (Aren’t they so nice) the owner operator keep the wheels moving.
Second, the owners that I have talked with who haul for these types of carriers are running about 90% of their loads at 10 to 20 cents less per loaded mile than the advertised rate with those carriers than utilize this technique.
Third, at $3.00 plus per gallon, just keeping the wheels moving is never a realistic justification for paying less per loaded mile than the rate the carrier advertised.
3. “We don’t pay supplemental mileage to reposition your unit.â€
First, when I started in this business I asked a recruiter if it would be possible to get some compensation for asking me to reposition my unit 200 miles away from my current location. He answer was, “We don’t supplemental mileage when you reposition your unit because we believe it is an investment in your future.â€
Second, my reply was, "Considering the cost of fuel and maintenance this is a business and not the charity of your choice.â€
To anyone considering becoming an owner operator the above listed examples are reasons enough to have a list of questions in hand when trying to make an informed decision.
