Being around the business a while you will see all kinds of crazy shit that the carriers do to the drivers and owner operators. While this tends to be common practice with most; or should I say many, the idea of honest business of yesteryear is showing signs of times past. However, after realizing that the rates I thought the carriers were earning, were actually way below what they were actually paid. This realization caused a great barrier for myself, as well as many others from the driving community of operators that move into their own leadership and management roles, typically from their own work and force of will.
- Paying the driver based on HHG, when they are charging the customer based on actual mileage from address to address. This can be a difference of upwards of 20% differences, and over the course of a year the carrier can earn 20% more gross without the expenses of the normal mileage associations. 20% of 100,000 typical solo operator miles can be a pay cut of $10k per year of operation pay that the driver loses annually. Personally, I’m a fan of the pay for performance style structure, where the operator splits the gross dollar earnings with the Carrier/Truck.
- Fuel Surcharge- Typically found with the per mile pay, the HHG mileage FSC, is given to the Truck/Owner Operator instead of the full 100% pass through to assist with fuel costs.
- Deducting Cost of Product Loss- Carrier has cargo insurance, to cover any losses. Say a load was miscounted and the Operator signed the bill being 2 or 3 off on a 2576 item count, of 10 different items, the Carrier should cover the loss. They carry insurance for that. It should always be the responsibility of the Shipper for their count, not the transporter, nor the operator. Had it happen, hey we ain’t all perfect, but I miscounted some produce in my early operation years, and all I can say is the count was off by 3 items out of 3165 ordered items. Those three items cost me $297 from my Operator pay, knowing I could have went and bought the shit from the grocery for less than $80 retail. $1000 was deductible on their self-insured policy, therefore that $297 freight loss charge from those 3 boxes of items, cost my operation. Guess they made there money, one way or another.
- Leasing a Truck, Used with Payments of a New Truck- Yep, you Lease operators better pay attention. Ask some damn questions. However, enticing to become a fresh Lease operator with a carrier. A $695 to as high as $875 per week payment is not cheap. Ever ask how much a standard Lease say from Freightliner would be for a new truck off the lot? If the carrier owns the dealership, ever wonder why they guarantee those payment amounts? Extra earnings from the package of trucks can turn in huge profit margins to carriers, who purchase packages to simplify the fleet, at the eager driver’s that desire the Owner Operator title. These carriers instead of helping the eager one’s, lacking experience, they ensure their beavers are being charged way more than they should be paying the Carrier profit centers excess of over 200-300 per week in profit. I am not mocking anyone for profiting, but damn at least let these guys have some savings, that corporate jet must get expensive with the traveling you are doing……..just saying, Profit, but damn, be fair to the one’s that are earning you the profits you are seeing.
- Not Paying the driver’s that are on Performance Pay, Accurate percentages- I will say it again, every driver who get’s paid based on percentage Performance Pay; has a RIGHT, per Federal Motor Carrier Rules and Regulations; to inspect and see all freight bills pertaining to the freight they move. They cannot tell you NO. They can push you out the door once you know their ways, but they must show you the actual freight bills, to ensure you are being accurately paid. How they cheat you that most do not realize– The gross amount of the freight bill, should reflect, all charges. Many times the Carrier will take off the charges, to keep in house. Then, deduct say their factoring fee’s, or charge factoring fee’s without using the service; The gross will deduct the expenses associated with the carrier, then pay the driver on the Gross Invoice minus some charges and deductions, then take the difference and pay the Owner Operator or the Performance Pay Driver their percentage.
- Charging extra fee’s from Carrier service provider’s, that are for the Carrier, and mandated use by the driver’s, and Operator’s leased or doing business with the Carrier.- Yes, they will upcharge you every single time that you request services from their in house support that they require you to use. I have seen upcharges of over $25 for a single Comchek/Tchek. They typically have a inhouse team operating the Large Volume Carriers Comchek or Tchek services, so the charges are actually a flat annual fee for licensing the network, which when averaged out can be less than $1 per transaction. Why charge the standard rates to the one’s operating through mandates of use by the Carrier? Like profit until you cannot profit anymore, make the Asphalt Eating Driver’s, take the standard charges, and earn an average of $75 or more per driver weekly for the services, only costing the Carrier $1, for every $25 transaction fee normally found.
- Watch the Pay and charges on the payroll– Surprise, you just got charged for a Comchek that was not yours. The Carrier is claiming it is not their’s, or the Agent is reminding you that it is yours from a load you didn’t move or get paid on………..100 drivers, and you get 1 $350 per week, from that group, times how many different 100 driver fleets in the volume carriers, with only 800 truck fleet, is $350 times 8 small fleets is over $2500 in weekly earnings that don’t get realized until it is too late……..better not miss much when they send you that pay sheet…….better double check your numbers.
- Charging Factoring to the Independent- Why charge the Brokerage customer a fee, after they just delivered your load? Collect 5% factoring, when you have been prepaid for the whole quarter, from your large volume customer…….What you didn’t catch that……..LET ME SLOW, THAT DOWN….. WANT TO KNOW WHAT CUSTOMER IS PREPAID FOR THE QUARTER OR THE YEAR, LOOK AT THE BILL OF LADEN AT SHIPPING, IF IT SAYS PREPAY, THEN THE CARRIER IS PAID UPFRONT, TYPICALLY BY THE QUARTER OR EVEN BY THE ANNUAL YEAR OF THE CONTRACT, BASED ON PROJECTED FREIGHT LOAD VOLUME. Then, the carrier will broker the excess loads out, charge a factoring fee to the Independent’s, or even as you learned before their own fleet, for a quick pay 48 hours after delivery, so the Independent does not have to have outside factoring. Do not think you are ever making what you should, many brokerages make profits of 25-75% of the gross rate due to the lack of knowledge from the outsiders of the lane volume, and how hard the booking of certain locations are……If an Independent is not careful he can book freight $1.25 to as high as $5 per mile less than the customer is willing to pay…….Large profits for the volume brokerage.
- Using the Independent Carriers, as the Volume Brokerage’s own Carrier network, by trying to force dispatch Independent’s for a 14 day period of time…..Yes, JBHunt we all get your fucking calls wanting our drivers to be dispatched by your fleet dispatchers, so that we cannot book our on freight that pays better from your very own customers…..No we will not just accept your bullshit, just for the simplistic sake of having guaranteed $1.65 per mile loaded only freight, on the $2.50 per mile freight from last drop (empty miles to shipper) to the pickup plus the loaded lane…….We know how you do it, even though you only pay the independents 70% of the gross, clearly stated on your website……when you should be paying these guys with all the liability and responsibility fairly, instead of shoving the overcharged, underpaid shit, that you do not want, down their throats without a sip of coffee……. however, kudos for you at least being honest about your charges…..