Custom pay

Max Kvidera | February 01, 2010

These are things that add up to probably 1 to 3 cents a mile, things the driver may not notice as blatantly as a huge pay change.”

Another factor affecting compensation programs is the growing impact of intermodal transportation. Rail is taking away business from carriers that relied on coast-to-coast routes. Carriers have adjusted by shifting to more regional hauls. Klemp expects to see more pay plans adjusted for regional and length-of-haul factors.

“The good news is owner-operators have done a good job of compensating on the cost side,” Klemp says. “That’s how they’re keeping their heads above water.”

 

The expanding pay plan cafeteria

In their competition to attract and retain owner-operators, carriers have a broader menu of compensation programs to reflect the realities of different hauls. The National Survey of Driver Wages documents these changes as of the third quarter of 2009.

52%Carriers offering a single per-mile rate. Four years ago, it was 73 percent.

30%Carriers offering pay plans based on length of haul and/or regional factors.

19%Carriers offering percentage of revenue pay. Four years ago, it was 10 percent.


Amen says many carriers spent the early 2000s creating pay packages that were owner-operator-friendly. Although some companies have backed off that strategy, they may move back again to programs that appeal to owner-operators. “They don’t want to be caught in a situation where they really want drivers and have to totally revamp their pay systems,” he says.


REGIONAL/LENGTH OF HAUL HYBRID

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Barr-Nunn’s program for owner-operators pays a base mileage rate, plus an additional per-mile amount tied to the length of haul.

Barr-Nunn runs a mileage-based program that takes into account length of haul and geographical differences. The carrier’s “band pay” mileage program covers over-the-road and some regional pay packages.

Every operator receives extra pay based on length of haul on top of the base rate of up to 91 cents a mile, says Jeff Blank, director of recruiting. Band pay ranges from an extra $1 a mile for hauls up to 100 miles, or $1.91 a mile, down to 2 cents a mile extra for loads running from 551-1,000 miles, or 93 cents a mile. For the carrier’s average length of haul of 450 miles, the band pay is an extra nickel a mile, or 96 cents a mile.

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Joe Haumann likes his carrier’s mileage-based pay program because it compensates him for layovers, multiple stops and waiting time.

“We wanted to compensate owner-operators more for the length of haul coming down,” Blank says. “If you’re looking at a percentage plan, we’re looking to share more with owner-operators.”

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