Just an Thought About The Turnover Rate

[bigtimba]

Let me try this one more time. The problem is Pay Per Mile. PPM obscures the fact that, in order to make any real money, we're going to have to put in a lot of hours but putting in lot's of hours is no guarantee that we're going to make any real money.

PPM obscures the fact that nearly every concievable inefficiency in this business presents a financial penalty to the Driver, no matter who caused it.

PPM obscures the fact that we aren't entitled to overtime. Drivers are exempted from the overtime provision of THE FAIR LABOR STANDARDS ACT OF 1936.

PPM removes the words "minimum wage" from the discussion, despite the fact it is your employers only obligation to you.

How many companies could advertise "Two weeks out for two days off (at home if we can get you there!)" or "Minimum wage and the possibility of a bonus (if we can get you the miles!)"

None, right? Why? No one would apply, I suspect. So, they disguise the hours and money with pay per mile and promise (not exactly a guarantee) you all the miles in the world. The longer you stay out, the more you're going to make! Now that sounds interesting, right? And people apply, get hired, get screwed and 85% say screw you. Hence, the revolving door mentality.

But, what's this talk about minimum wage, bigtimba? I don't work for minimum wage! Heck, I made $850 last week. That ain't no minimum wage.

Add up the hours you prepared to drive; provisioning, cleaning, maintenance, logging and trip planning. Add in the hours you sat waiting ready to but couldn't drive; no load, flat tire, bad weather, accident, traffic jam, rotten customer, late load, no empty, chasing empties, etc. Then add the hours you actually drove - no averaging - and see what you come up with. Now throw in the time that you had to sit because somebody else related to a load screwed something up and you have to wait while somebody who isn't losing money and who knows you're losing money takes their sweet time getting it resolved. I don't care what you logged because you cheated, somewhere. Now take your $850 and divide by the total hours. Here is your state's minimum wage: http://en.wikipedia.org/wiki/List_of..._minimum_wages

If you made less than minimum wage, your company owes you the difference but only for the hours you actually logged. If you made minimum wage, good for you. If you made more than minimum wage, CONGRATULATIONS! You earned minimum wage plus a bonus!

Business is about risk. My employer is taking a gamble that he can get me enough miles to cover his obligation to pay me the minimum wage. While it is in everyone's interest to do more than that, my employer's risk or cost is fixed and predictable. Now the risk becomes mine. I am going to put in the long hours. can my employer get me the miles? My miles are not predictable and it's rarely due to a lack of freight. Beyond my ability and willingness to drive, I have no say in and no control over the miles available.

All of the possible inefficiencies in this business fall to me and not to him. My costs go up as my available hours are eroded. When my hours erode to the point where I can't continue or take another load, I'm screwed. But he can take that load and put it on another truck. I can't take someone elses hours.

That's the rub. Now it's my risk. His truck and Driver cost doesn't change. No increase in cost means no increase in urgency. No urgency means I absorb a greater cost as more time passes. Cost is the only incentive there is to improve efficiency.

Change the law. Restore the overtime provision. Let a fair market determine a fair wage. Put an end to PPM "piecework" and put the risk back on the company where it belongs.

Yes, the cost to move freight will go up. Freight rates are artificially low as it is, thanks to PPM. Change the law and the changes will be applied equally and fairly.

[GMAN]

There are a couple of things which will prevent carriers from paying drivers by the hour. The first problem are the freight rates. Rates have been too low for all too many years. Unfortunately, it seems a race to the bottom to get the freight. There are also owner operators who will also take cheap freight just to keep the wheels rolling. The larger the carrier the more apt they are to haul cheap freight. There are some who have good rates, but some will take anything to keep the driver moving. Most drivers seem to not be happy unless the wheels are turning, regardless of the pay.

I still feel that per mile or percentage is the best way for a company to compensate a driver. Personally, I prefer percentage, but many drivers seem to prefer per mile, even though they probably earn less at the end of the week. Shippers would be reluctant to pay carriers by the hour for obvious reasons. The same could be said of why carriers will not pay drivers by the hour. There is simply too much opportunity for abuse and inefficiency. A driver has little control over how much he is paid if he works by the hour. If he works percentage or mileage then he has more control over how much he earns.

I do think carriers should charge for drivers sitting. I agree than a driver's time has value. Unfortunately, there are many shippers and receivers who don't seem to feel the same way. Until carriers put pressure on shippers to pay them for sitting, that isn't likely to change. Carriers are usually not going to pay a driver for sitting unless they are also being paid. If shippers had to pay then you would likely see fewer drivers sitting for long periods of time. This is an issue that has bugged me for a number of years. It has gotten much worse in recent years. No carrier wants to be the first to start charging shippers who waste their time. Another issue which needs to be addressed is lumpers. I think shippers should furnish their own lumpers. If the carrier does and he wants a driver to help unload, then the driver should be entitled to the same compensation as a lumper. I have known of drivers who have been paid $40 when the carrier will pay a lumber $175 or more for the same service. It isn't right.

As it stands now, if you want to be paid by the hour then you need to look for a local job. I can't see this industry changing to an hourly wage for OTR drivers.

[Snowman7]

Or, just say no.

[bigtimba]

Freight rates are low because OTR fleet owners are offering up discount Drivers. If Drivers had to be paid for their time, despite the inefficiencies of others, rates would rise because they'd have to. All Drivers would win.

Anybody can go in and low ball a rate just to keep the wheels rolling and it many cases, it's probably good, for the short term. Anyone who tries that strategy for the long term has found themselves a shortcut in the race to the bottom.

[GMAN]

It is partly fleet owners and the carriers, but also owner operators. Some of these people will do almost anything to keep the wheels rolling. This is the primary reason rates have been so low. They will take anything at almost any price to avoid having to take fuel money out of their pocket. If these people have enough trucks they may make it work for a while. When fuel costs escalate so high too quickly, they can no longer continue on their current path. They must either raise rates or go out of business. There are still owner operators who will lease to carriers for less than $1/mile. They seem to think that if they get a good fuel surcharge they can make a lot of money. The fsc has both hurt and helped the industry. It has help some to offset some of the high cost of fuel spikes. It has harmed the industry since it helped them to avoid the real problem, which is cheap freight rates.

How is a company...any company...going to be able to afford a 'resonable' wage for a driver?

How do the LTL's pay up to .57 cpm and $25.00/hr and overtime after 8/40 hours?

GMAN alluded to it in one of his posts: too many idiots in OTR willing to haul for chicken lights, 8-ball shifters, and rebel flags. That's why I'm not in that end of the business anymore. LTL doesn't have that problem because of the enormous costs involved in setting up a network of hub-spoke-terminals-breakbulks. Thus, there are high barriers of entry in LTL while anyone with a used truck/trailer is a potential competitor in OTR.

The only way wages/rates will go up in OTR is for the barriers of entry to get ratcheted up. Regulation and bringing back the ICC is obviously not the answer. So what is? Well, speed limiters and EOBR's would be a good first step. Next would be stricter requirements to obtain and hold a Commercial Drivers License along with an end to government tax-funding for CDL mills.

Then the re-emergence of unions in OTR. Let's say barriers of entry were higher and a big company like Swift of Schneider was organized by the Teamsters....then everyone else in OTR would have to pay close to union-scale in order to keep the union out. That's why all the LTL's pay pretty much the same wages...it's all based off the NMFA (National Motor Freight Agreement) contract wages of Yellow, Roadway, ABF, etc. LTL is one of the few trucking jobs that pay overtime to their drivers...some non-unions pay after 40, others at 45, some 50...the bigger the company, the more they generally pay as the bigger companies are targets for organization.

But there's no unions in OTR so the carriers pretty much make the rules up as they go along plus they use your time and labor as ammo to cut rates. And why not? There's nothing you can do about it except quit (which many do) or bend over and say "part of the job".

[Snowman7]

Some of you have some good ideas but the bottom line is that the shippers/receivers and carriers are just fine with the way things are now. Why would they change? They're not going to pay you more just because they feel sorry for you! Too many drivers are willing to put up with it. They have little or no reason to change anything. Either the government has to step in and change laws or the drivers have to just say NO, I WONT DO IT ANYMORE! Neither of which is likely to happen.

[GMAN]

Comparing LTL to OTR is like comparing apples to oranges. They are two different animals. About the only similarity is that they both involve driving the truck. Scheduling and time management is not usually as critical in LTL as it is OTR.

I don't think unionization or having more government involvement is the answer. We have more regulations than we need now. Government regulations are one reason we have some of our current problems.

As a driver you could log exactly as you run. I think it would also help for the government to stop funding carrier schools. It encourages more turnover within the industry. It also allows those who should not be in this business to enter. That is a waste of company and public resources. Some of these programs not only pay the carrier's to train these people, but also pay part of their salary or wage during the training period. That subsides those carriers who want to haul freight at substandard rates.

Speed limiters are also not the answer. If the large carriers have their way, all carriers and owner operators will have to spend hundreds or thousands of dollars for a black box to control their speed. It not only creates a burden on an already troubled industry, but is not necessary. Those carriers who want to limit the speed of their fleets are free to do so. From other postings on this forum, drivers are already screaming about their trucks being turned down. We already have speed limiters on all of our highways. It is called a speed limit. Again, it is more government regulations which creates a lot of unnecessary costs for carriers and owner operators.

[belpre122]

Scheduling and time management is not usually as critical in LTL as it is OTR.

OK G. You've been throwing out a lot of (stuff). At least be willing to take that back? You're drifting dangerously close to the old 'it's all the driver's fault' world that you live in "statements" again.

[Snowman7]

Scheduling and time management is not usually as critical in LTL as it is OTR.

Huh? 80% of our linehaul is ALL scheduled. Every run has a "run time" We swipe a time card at dispatch and arrival. If I leave 1 minute late my boss has to have a reason for his boss. If I'm late getting to a terminal I hold up the whole dock and every driver who is waiting for freight on my trailers. If I'm delayed for traffic, weather, etc I call central dispatch. If I dont get back home in time I hold up the city operation. Unlike OTR I cant take a two hour nap whenever I feel like it.

[GMAN]

Scheduling and time management is not usually as critical in LTL as it is OTR.

OK G. You've been throwing out a lot of (stuff). At least be willing to take that back? You're drifting dangerously close to the old 'it's all the driver's fault' world that you live in "statements" again.

I have never stated that everything that happens is the drivers fault. In most cases the driver does have culpability. If he commits to taking a load then he has responsibility to get his load delivered as agreed. I have done LTL and I never guarantee a firm delivery time. The only way I have a firm delivery schedule is when I do truckload. And I always allow for some delays or contingencies. There may be some carriers who operate differently, but most carriers or owner operators I know who do LTL, do not guarantee a firm delivery schedule unless the shipper wants to pay for the entire truck. There are too many opportunities for delays. If a driver takes a load that he knows he cannot meet the schedule then it is his fault. That is why I prefer to see dispatchers driver for a couple of years before being allowed to be a dispatcher. Unless someone has been there they have no idea of what it takes to do this job.

Huh? 80% of our linehaul is ALL scheduled. Every run has a "run time" We swipe a time card at dispatch and arrival. If I leave 1 minute late my boss has to have a reason for his boss. If I'm late getting to a terminal I hold up the whole dock and every driver who is waiting for freight on my trailers. If I'm delayed for traffic, weather, etc I call central dispatch. If I dont get back home in time I hold up the city operation. Unlike OTR I cant take a two hour nap whenever I feel like it.

When you driver OTR you may or may not be able to stop and take a 2 hour nap when you feel like it. If you pull a box or reefer around, you will probably have a pickup and delivery time. These two points could be completely across the country. That requires a lot of time management. It sounds like you don't have a lot of time to do your pickups and your company keeps you on a tight schedule. When I do LTL we don't commit to a firm delivery schedule unless the shipper wants to pay the truckload rate. We often have pickup and deliveries in different cities.

Scheduling and time management is not usually as critical in LTL as it is OTR.

That statement shows you have no idea what you're talking about. You've got it back asswards.

Speed limiters are also not the answer. If the large carriers have their way, all carriers and owner operators will have to spend hundreds or thousands of dollars for a black box to control their speed.

The black box (aka: EOBR) will not control your speed. What it will do is ensure you are not driving past 11 hours or working past 14 (in absence of a sleeper berth split). It will be a huge aid to DOT and law enforcement and it will save lives by cutting down on tired drivers.

We already have speed limiters on all of our highways. It is called a speed limit.

Yeah, I see so many people obeying the speed limit!!

Again, it is more government regulations which creates a lot of unnecessary costs for carriers and owner operators.

This is how shortsighted you and your beloved OOIDA are. What you fail to realize is that those costs will create barriers which keep the rif-raff out. When you limit the supply of trucks, you will see rates and raises go up.

But the OOIDA wants as many trucks on the road as they can so they can collect mmore dues and sell magazines, tires, and insurance. It's all about the money.

When you driver OTR you may or may not be able to stop and take a 2 hour nap when you feel like it. If you pull a box or reefer around, you will probably have a pickup and delivery time. These two points could be completely across the country. That requires a lot of time management. It sounds like you don't have a lot of time to do your pickups and your company keeps you on a tight schedule. When I do LTL we don't commit to a firm delivery schedule unless the shipper wants to pay the truckload rate. We often have pickup and deliveries in different cities.

Well I've done both and you couldn't be more wrong. Your LTL is not true LTL in the sense of working for a hub-spoke carrier. It's more like multi-stop truckload. Shippers and 3PL's use you for LTL because you're cheaper and they don't really care when the stuff arrives. Otherwise, they'd call us.

When you're dealing with next-day and 2nd-day regional LTL freight it's a whole different ball game. Most of the stuff is JIT and with some of the freight, there's penalties for arriving late...no not a day or two but like a day window from 10:00 - 12:00. Arrive after 12:00 and you just delivered it for free. :evil:

[GMAN]

It is increasingly obvious that you have little knowledge of what you are talking about. LTL is less than truckload. It doesn't matter whether it is with a fixed schedule or open, a partial is still a partial. I am not talking about FedEx or UPS. Just because an LTL doesn't have a hard delivery time doesn't make it a truckload. JIT can be a LTL or truckload. For most carriers I would think that there is more JIT with truckloads unless you are someone such as FedEx or UPS. I believe Overnight used to do more time sensitive LTL's. I hope that I have cleared up your confusion.

You are correct to some degree about the EOBR's. They are a tool that DOT can use to see how long a driver has been working. I doubt that it will actually improve safety. People have different body clocks. A computer cannot tell when a driver is tired. Common sense will tell him to stop and rest when he gets tired. He can be compliant and still be too tired to drive. Speed limiters control the speed of the vehicle. Neither is likely to improve safety. By the way, speed limiters will not prevent trucks from speeding. Just check out most any construction zone. You cannot legislate safety. If you could then this should be the safest industry

I am not sure where the reference to OOIDA came in here. I have been in business most of my life. I am well versed in how business functions. What you don't seem to realize is that by increasing costs you will limit the number of carriers. That doesn't necessarily mean that you will raise driver's wages. It could likely have the opposite effect. It is funny that you would accuse OOIDA of being about the money. Isn't that what you have been talking about with driver's wages?

Whether you deliver on a hard schedule or not doesn't define LTL. Picking up less than a truck load from different shippers and delivering them to different consignee's is LTL. Multi-stop truckload means that you pick up a truckload and make several stops. That isn't LTL.

I think you just like to argue.

Whether you deliver on a hard schedule or not doesn't define LTL.

I never said it did.

Picking up less than a truck load from different shippers and delivering them to different consignee's is LTL. Multi-stop truckload means that you pick up a truckload and make several stops. That isn't LTL.

That's pure nonsense. The only difference you've stated is whether the truck is full of freight or not. But the only thing that really matters is whether the rates you get for the partial freight you've collected are profitable enough to haul. You can physically stuff a trailer to the back door with partials and make less money than a trailer of partials that's 3/4 full. It all depends on 2 factors: the rates you get and the type of freight-mix you have (density and weight).

That's why an LTL carrier...not a truckload carrier...has breakbulks. The breakbulks allow us to take partial freight (and sometimes tho rarely full truckloads) from different terminals and collect them at a central location so as to efficiently pack our outbound trailers for max load factor.

That's why I say you do multi-stop truckload because you're a TRUCKLOAD CARRIER doing multiple stops. You're not an LTL CARRIER because you lack the terminal-breakbulk system needed to do true LTL. Your comparison of us to UPS and FedEx was unknowingly to you valid because we use similar hub-spoke systems as the parcel carriers.

Here's something else to consider: a shipper in Miami won't call you up for 4 skids tomorrow to be delivered to Ohio in 3 days because GMAN Trucking doesn't have a terminal in Miami. Why? Because you're a truckload carrier. Unless the shippper is willing to wait awhile for one of your trucks to get down such that it would be profitable enough for you got justfiy picking up the 4 skids.

Do you get it now?

[bigtimba]

. . and so go the days of our lives . .

Once again, everyone wants what's best for Drivers and Trucking. Once again, you can't find two Drivers who agree on what's best for them. In the course of civil discourse the first thing to go off course is the civility. Tempers flare, nothing get's done . .

. . and so go the days of our lives.

Gman . . please hire me. I have impeccable creds. Gaurantee me $60k, decent bennies, 60 days off a year and I'll run any load you send and drive every mile I can log legally. I have zero requirement for home time. One truck wash a month and I'll take care of my own showers, OK?

[GMAN]

[quote=LeBron James]

Whether you deliver on a hard schedule or not doesn't define LTL.

I never said it did.

Picking up less than a truck load from different shippers and delivering them to different consignee's is LTL. Multi-stop truckload means that you pick up a truckload and make several stops. That isn't LTL.

That's pure nonsense. The only difference you've stated is whether the truck is full of freight or not. But the only thing that really matters is whether the rates you get for the partial freight you've collected are profitable enough to haul. You can physically stuff a trailer to the back door with partials and make less money than a trailer of partials that's 3/4 full. It all depends on 2 factors: the rates you get and the type of freight-mix you have.

I always get more doing LTL that I do truckload. Otherwise it isn't worth the extra work. In reality, the rate has nothing to do with whether you are doing LTL or not. It does make a difference in whether you are profitable or not.

That's why I say you do multi-stop truckload because you're a TRUCKLOAD CARRIER doing multiple stops. You're not an LTL CARRIER because you lack the terminal-breakbulk system needed to do true LTL. Your comparison of us to UPS and FedEx was unknowingly to you valid because we use similar hub-spoke systems as the parcel carriers.

It wasn't unknowing. I know exactly what I was saying. I know exactly how UPS and FedEx work. I never said that I was an LTL carrier. However, I sometimes do LTL. There is a difference. And you don't need a terminal to do LTL. You still seem to be confused.

Here's something else to consider: a shipper in Miami won't call you up for 4 skids tomorrow to be delivered to Ohio in 3 days because GMAN Trucking doesn't have a terminal in Miami. Why? Because you're a truckload carrier. Unless the shippper is willing to wait awhile for one of your trucks to get down such that it would be profitable enough for you got justfiy picking up the 4 skids.

Do you get it now?

You know nothing about my business. I never denied being a truckload carrier. However, we also do LTL. I just don't do LTL all the time. Whether I have a terminal in a certain area is irrelevant as to whether I can haul 4 skids to Ohio. In reality we could conceivably take an LTL out of Miami and deliver in Ohio within the 3 days if we had other LTL's lined up to take. I have dealt with short delivery LTL schedules. Sometimes things come together to make it work. I never commit to a schedule where there is a question that I can make the delivery. By the way, I have gotten calls similar to your 4 skids.

I believe that you previously posted that you have been in this business for 2.5 years? It is amazing that you know everything about trucking in only 2.5 years.

I always get more doing LTL that I do truckload. Otherwise it isn't worth the extra work. In reality, the rate has nothing to do with whether you are doing LTL or not. It does make a difference in whether you are profitable or not.

I think you missed the point of what I was trying to say.

I never said that I was an LTL carrier. However, I sometimes do LTL. There is a difference.

I never said there was. But you said:

Picking up less than a truck load from different shippers and delivering them to different consignee's is LTL. Multi-stop truckload means that you pick up a truckload and make several stops. That isn't LTL.

That's not correct.

And you don't need a terminal to do LTL. You still seem to be confused.

Where did I say you needed a terminal to do LTL?

In reality we could conceivably take an LTL out of Miami and deliver in Ohio within the 3 days if we had other LTL's lined up to take.

OK, come by tomorrow by 16:00 to pick up those 4 skids because the customer needs them in Ohio by Friday. I've also got 3 skids from my Dallas manufacturing plant for you to pick up going to California. Oh yeah, and 5 skids from my Arizona warehouse that need to be in Maine by Monday.

[belpre122]

I believe that you previously posted that you have been in this business for 2.5 years? It is amazing that you know everything about trucking in only 2.5 years.

That was me! Your other buddy, G! Actually, I meant 3 years.
But who's counting? :wink: