Pay Choice

Todd Dills | December 01, 2011

• Rate to the truck inherently stable with miles

• Often little self-dispatch freedom

• Fuel surcharge often averaged among fleet accounts/diesel prices

Though most owner-operators shy away from percentage pay during a downturn, flatbedder Dan Heister, Overdrive’s 2011 Trucker of the Year, stuck with Boyd Bros. Transportation’s Independent Express self-dispatched percentage pay program during the recent recession. He’s had strong earnings since joining the program in 2007.

• Niche specialization possible but not in operator’s control

• Home time in control of dispatcher

• Rate per loaded mile variable by lane/market conditions

• Self-dispatch often available

• Fuel surcharge paid in lump according to individual negotiated accounts

• Niche specialization by lane/freight within reach with self-dispatch

• Home time a function of operator’s ability to customize schedule

Planning Profit Under Percentage Pay

Under a percentage pay plan, the owner-operator typically takes home 65 percent to 75 percent when pulling the company’s trailer. It’s a few percentage points more with his own.

Sam Mobley, leased to Schneider National, gets 65 percent of revenue. He hauls dry van freight primarily from the Southeast to Texas.

Miguel Dunkelberger of Middleville, Mich., however, has found a deal he calls the “best I’ve run across in years” with a full 90 percent of the gross pay package, leased to LR & Sons Trucking of Grand Rapids.

Before your eyes pop out of their sockets, keep in mind Dunkelberger, who drives a 1996 Marmon 103D flattop, pulls his own 53-foot 1997 Trailmobile dry van. In addition, he says, the high percentage is due in part to the 22-driver carrier being young and trying extra hard to attract other owner-operators.

Also, costs many leased owner-operators don’t incur, regardless of pay package, play a part in the carrier’s ability to offer the high percentage: chargebacks for cargo and primary liability insurance.

“All in all it runs just over $200 a week,” Dunkelberger says, for those plus insurances more typical for leased owner-operators (nontrucking liability, physical damage). Perks include in-house IFTA preparation, a carrier-provided fuel card, and PrePass.

Success under a percentage program required owner-operator Sam Mobley to change weekly targets from miles to revenue, achieved on the fewest miles possible.

“I might take a high-paying load into Pennsylvania,” he says, “and take $1.70 a mile. But I might only get $1.02 per mile out. That lower-paying load — you hope that will be fewer miles and average the two together to make a decision.”

In this market, he says, he’s happy with $3,000 to $4,000 weekly in gross revenue. Running mostly long-haul, he tries to book a load leaving Sunday. “You have a good shot at hitting your target that way,” he says. If you come out on Tuesday, “you might just do two loads that week” for $2,700 or so in revenue.

Evaluating percentage plans requires knowing your revenue and costs. With the fuel surcharge, Mobley says, some mileage-paid operators at Schneider National might average $1.42 a mile in revenue, “but I’d average $1.37, and it’s my choice to do it that way. I’ll make up the difference by doing more in income than they will” with lower overall costs on fewer miles.

  • guest

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