Let’s be practical

| December 12, 2008

WHY ‘HOUSEHOLD GOODS’ MILES?
The Official Transportation Mileage Guide, now known through Rand McNally as the Household Movers Guide, was created in the late 1930s by the Household Goods Carriers’ Bureau of the American Movers & Storage Association.

The miles originally were figured on routes appropriate for loads under 30,000 pounds, but the HHG Guide and similar short-miles ratings used by competitors are now based on typical truckload requirements: 80,000 pounds, clearance of 13 feet, 6 inches and a lane width of at least 10 feet.

You might have noticed that two large fleets, Contract Freighters Inc. and the Crete Carrier group, are moving to practical mile pay.”It’s a way to give a raise and get rid of a problem, perceived or not, that has always upset the owner-operator,” says Kevin Rutherford of Whiteline Business Services, an owner-operator financial services firm.

Indeed, the idea of not being paid for some miles adds insult to the many injuries truckers endure, regardless of the pay rate for the qualifying miles. Moving from household goods miles (or a similar short miles rating) to practical route miles helps fix that problem. Not only does it account for common-sense alternate routing, it also bases measurements on addresses or ZIP codes.

“A common complaint is, ‘You guys don’t pay us for the miles we’ve got to drive,’” says Herb Schmidt, president of CFI, which begins practical mile pay in December. “We felt it was time to step up to the plate and get more aggressive with our customers to recover it.” More than a third of CFI’s shippers already pay practical miles, he says.

That customer conversion is critical for any fleet looking to pay practical miles, says John White, a U.S. Xpress vice president who made a comprehensive study of mileage ratings when at another carrier.

The difference between short and practical miles runs about 3 percent or 4 percent on most routes, but can range to about 8 percent, based on estimates from White, Rutherford, CFI, Crete and routing software provider Prophesy. At Crete, which instituted practical miles pay Oct. 1, some optimistic drivers feel their routes will produce spreads even higher than 8 percent, says Rich Snyder, recruiting director. Rand McNally’s Bernie Hockswender, however, says there are too many variables to state a meaningful spread.

Whatever the average difference, other fleets likely will follow suit, and practical mile pay will no longer be a rarity. CFI and Crete are not the first to take this step; most fleet customers who train on Prophesy’s software at company headquarters now pick the practical miles option, says Vice President Bill Ashburn. Ten years ago, most picked short miles.

The spread of practical mile pay gives you one more important factor to weigh whenever you review your lease or shipper contracts.

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