Should HHG miles-based pay be illegal?
Owner-operator Jeff Clark, in the conference the Trucking Solutions Group organized Wed., June 20, with FMCSA Administrator Anne Ferro (Clark is a TSG member owner-operator), presented Ferro with the discrepancy between household-goods miles and actual door-to-door miles. “The household goods miles system that we’re paid on is often fewer miles than we could legally make a run in,” Clark noted, then adding this: “Paying a driver for fewer miles than they did the run on isn’t just wrong but should be illegal.”
Ferro asked for further information, and following find the note Clark sent her way, to which she responded “positively,” Clark says.
I know there are several carriers out there who’ve switched to practical miles or hub miles systems for pay. If you’re on a mileage-pay system, which one applies to you? What do you think about making it illegal to pay for fewer miles than are actually run?
Here’s Clark’s note:
Currently most driver mileage pay is calculated from zip code to zip code. This system was developed circa 1936 to standardize distance measurement from city to city. It evolved into zip code to zip code. Zip code to zip code is no longer state of the art. We can calculate door to door in seconds. We can even calculate door to door by the size and weight of the delivering vehicle. Ninety-two percent accurate is no longer acceptable.
Many times the current standard is not set up to the weight and size of the CMV necessary to deliver the load from shipper to consignee. A 40-ton truck may get paid to use a route with a 30-ton bridge. Many times the legal route is significantly longer. Distribution addresses can be manipulated to shorten the paid miles. An example of this is a large distribution center in central Florida that uses a zip code that is 19 miles north of the facility rather than the one 5 miles south of the facility. If 75 percent of the freight comes from the north, it represents a significant savings to the distribution center. Using a door to door system rather than a zip code system would eliminate this type of manipulation.
There is a constant debate in transportation on mileage between HHG, practical and hub miles. It makes no sense to reward a driver for taking the longest way, yet it is unfair to pay a driver fewer miles that a load can be legally run. Let me use the example of the run from Chicago to Columbus, Ohio, as an example. The driver may want to use the practical way of using the Interstate System through Indianapolis. The shipper will want to pay the shorter way of using U.S. Highways through Fort Wayne, Ind. There is an adequate bypass around Fort Wayne, and trucks are no longer allowed to drive the shorter distance through Fort Wayne. Many major cities, such as Atlanta, require trucks to bypass the city. Hazmat loads are required to bypass even more cities. This results in a difference between paid miles and legally run miles.
We have a significant turnover rate in the industry. We also have a turnout rate. That is where we can attract people into the industry, but within a year or two they have left the industry. One of the causes listed for leaving the industry is getting paid for 92 percent of the miles driven. Paying an hourly employee for 55 minutes an hour would be unacceptable. This industry and its aging driving force will be facing a real driver shortage if we don’t correct some of the reasons we can’t retain drivers. Mileage pay is one of the areas we can improve. If we don’t start doing something, shippers better start preparing for the day when they can’t get a truck. It should be illegal to pay a driver for fewer miles than it takes to deliver a load legally.