Though the most common question that the new operators in the trucking industry are concerned about is the money they’ll earn, yet there doesn’t exist a straightforward answer to that. It is impossible to reduce the truck driver’s pay to a single formula. The cost usually depends on a number of factors. What really determines their earning is the organization that they work for and the kind of service they provide.
Below, some types of truck pays and their key determining factors are discussed.
Pay According to Distance:
Although it’s one of the most prevalent ways of paying the drivers still the payment policies vary from one organization to another. The three of the most popular charge rates per mile are:
Most Direct Route:
This rate is based on calculating the pay on the basis of the most common distance traveled from the starting and the target points. It's typically determined through an online map system and the course is proposed to the driver through the ELD. The path direction is identical to the map directions of Google.
Household Goods Miles (HHGM)
Also known as short miles, the household good miles is calculated using the most direct route between two areas of different zip codes.
Hub Miles:
Hub miles refer to the actual distance covered by the truck based on the measurement on the meter along with the time of service including the stopovers and alternate passages.
The Kind of Equipment and load:
The rates are also determined by the type of load that one transports. Though the terms LTL and Hotshot loads are nowadays used for the same type of freight, these two do have a difference.
Hotshot:
Generally, the hotshot loads are used to carry the products that need to be transported in a shorter time. The freight can easily fit in the gooseneck or to the box truck.
Less-Than-Truckload:
The LTL loads join together several freights to fill a truck to its full capacity. By and large, the cost is decided on the basis of load class and the space that load occupies in the trailer.
Established on the grounds of quantity, services, management and stow capability, the freights can be divided into eighteen classes from class fifty to class five hundred. As the number goes higher the freight becomes lighter and its handling becomes challenging. The freight belonging to the higher class also takes up a larger space. That is why such freights charge more. The other types of the loads include TL or truck load, Air ride freight, blanket wrap, air freight etc.
Load Boards
To search for the loads on the same lane that you operate, you can take help from the load boards. Different load boards can provide information regarding the types of loads that one is looking for. After finding the customers and choosing the loads, one can develop contacts with those companies.
The load boards also help in getting the information regarding the variation of rates on the basis of lanes. One can perceive which lanes can offer more money and which do not pay much. There are other websites that can show the average cash market rate for full and LTL freights. The rates are usually between Four 0.8$ per mile to 4$ per mile.
Equipment:
One of the most important things to take care of is to buy the equipment after proper planning as the money that one earns mostly depends upon the equipment that is used.For instance the hotshot load is used for vehicles like Cargo pickups, 4/4 Trucks with gooseneck, etc.
These vehicles are some of the most efficient and simplest means to become an owner operator. Though the cost of the equipment is reasonable and affordable yet to transport the freight across the state-lines the other charges can turn out to be expensive. For instance, one has to get one’s own truck operating license to move the loads. Along with that the ensuring a proper insurance coverage and filing the fuel taxes add more to it.
The other costs may include:
- Equipment costs
- License plates
- Permits
- Parking
- Meals
- Tolls
- Maintenance
Fuel Price:
The hotshot loads have a lot of advantages and disadvantages and the rates usually vary a lot. The rates normally depend upon the fuel cost.
Cost Based on Time
Hourly Wages:
This custom is usually followed by the organizations whose drivers carry and deliver the goods within the area of a one hundred and fifty miles radius from the starting point. The drivers can work for a specific number of hours on a week by week premise and are paid on hourly wages. Much of the leading warehouses dealing in grocery chains or similar retail businesses, hire workers on hourly wages for interstate operations or for the operations within the city and its suburbs. The hourly wages usually carry the LTL freights and the money they earn usually depends on the level of their job, their interaction with the clients and the quality of maintenance they retain.
On Daily Basis:
This indicates the pay that covers the money for meals and other expenses on a daily basis.
The drivers are not charged tax for these pays.
Freight Lane:
The right freight lane helps you earn more profit and utilize time in the most efficient way.
Some load boards provide complete details regarding each type of load. Others only give the details regardings the pickup and delivery points along with the contact information for shippers.
You can figure it out by following these steps:
- Getting quotes for ten loads
- Calculate the average cost
This will help evaluate the average cost per mile for one direction in that particular lane. The cost for the opposite direction can also be determined by following the same steps.
Good planning to buy fuel also plays an important role in increasing profitability.
Based on Services:
There is more than one policy followed for settling the truck driver’s pay. Based on the type of service they perform. Along with the transportation and transfer of the goods, there are a lot more activities and functions involved in the process of freight forwarding. And these activities and functions vary in their complexities. To make the complicated process easy, the freight forwarding companies perform these functions for other companies. Shipment, packaging etc all can be well handled by these companies. Generally, the drivers also participate in the material handling of the load and for good maintenance they are paid extra charges. Some of the pays based on services are discussed below
Accessory Pay:
If the drivers are giving extra services other than the transportation and maintenance then they are paid for those services. These services may include:
- Cargo handling
- Stretch Wrapping pallet loads
- Tarping loads on flatbeds
- Managing forklifts
- Paying the tolls on the way
- Haulage after the normal working hours
The difference in the number of people assigned the job also plays a role in pay determination.The wages are different for a single driver than that of a team of drivers. While travelling with the team, the driver has the opportunity to take a break when he/she is tired while the other member takes the steer.
The companies offering the accessory pay, often charge the customers for the billable services and then pay the drivers.
Based on Company Policies:
The per-mile pay varies from area to area and from company to company. Every industry has different characteristics and offers different rates. The rates also depend on the type of industry you move the freight for. And the equipment varies too for different industries. For example, for transporting agricultural products one can use a refer or a hopper truck for hauling in plain areas.
Freight based:
Many drivers often settle on a payment that depends on a share of the total earnings of the delivery of the products. This is the most-followed model among the trucking companies.
Payment for stopovers:
This reefers to the pay that the drivers are paid for making stopovers during the transit. It basically covers the extra time that is consumed as a result of making these stops.
Compensation For Delays:
The whole transportation process follows a strict time schedule. Any delay caused at the shipper’s end slows down the whole transportation process and creates challenges for the truck drivers. For this particular reason, the drivers are paid detention pay to make up for the lost time. It may be decided
- By the organization
- On an hourly basis
- According to a fixed rate
Usually, a considerable amount of time around 2-3 hours is set by the companies for the loading and unloading of the freight and if it takes more time then most of the companies give detention pay.
Bonuses:
Many organizations offer bonuses and rewards to the drivers for following good practices that profit the companies.
Gas Bonus:
It is a common practice among the companies to offer incentives and bonuses for the drivers who say fuel cost by improving gas mileage. These savings are then shared by the companies in the form of rewards.
Security Bonus:
Along with that, the companies also offer bonuses for good handling of the freight. The safe management and transportation of the products not only save time but also adds to profitability and the truck drivers need to be appreciated for that. And for that many companies give them safety bonuses.
By understanding the pay structures of different companies, the drivers can increase their profits and earnings and negotiate in a better way. The full-time truck driver job can be beneficial and a better understanding of the job could help them earn better.
