If you’re a Regional or OTR driver in 2018, and you’re being paid by the mile, then you’re leaving money on the table! The new way drivers are taking advantage of the current freight market, is by demanding to be paid a percentage of the revenue you haul! This article explains why percentage pay is the new system drivers need in 2018.
DAT’s January 2018 Load-to-Truck Ratio report stated that there were 9.9 loads posted for every truck. With almost 10 loads for every truck on the road, the law of supply and demand has caused freight rates in the spot market to increase significantly over the past quarter. The industry has also seen an increase in the contracted rates carriers are receiving from their shippers. That’s good news for carriers, who are constantly fighting against higher costs of equipment, ELDs, health insurance, liability insurance, etc. But while rates have been rising, how much has been passed to the driver?
It's true that drivers wages have increased in recent months. According to Transport Topics, a majority of carriers who pay drivers by the mile have raised rates 1-2 cents per mile, and outlying companies have raised driver pay by 4-7 cents per mile.
The only true way that drivers are getting an equal part of the increase of freight rates is if their company pays them by a percentage of the freight revenue. Here is an example to illustrate the difference:
Take, for example, a 300 mile lane from Chicago, IL to Louisville, KY. DAT’s stats show that the rates paid to carriers on that lane have increased $.44/mile over the past year. If a driver is working for one of the higher paying carriers who gave $.05/mile raises, then his raise only makes him $15 ($.05 *300 miles) more to do this load. But on that same example, a driver who’s paid 25% of the revenue would be making $33 (25% of $.44 * 300 miles) more per load. This is just one example of one load on a given day. But when you stretch that out over a week, a month, or a year, and it makes a huge difference in the driver’s wages.
Every trade magazine and economist in the trucking industry projects the driver & truck shortage is not going away anytime soon. The trend of higher freight rates is only going to continue, so the smart decision right now for Regional and OTR truck drivers is to go to a company who pays their drivers by a percentage of the revenue!
Drivers need to find a company like Smith Transfer Co, Inc., in Evansville, IN. Smith Transfer understands the current competition for quality drivers during this shortage. Smith values their drivers and shares their success with their drivers. Smith Transfer pays new drivers with no experience at 24% of the linehaul revenue. Drivers with 2 years’ experience start at 25%, and drivers with a clean driving record and many years’ experience can start at 26%. In addition to the perenctage of revenue, drivers are able to earn monthly fuel and productivity bonuses that can exceed $500 per month! The average Smith Transfer driver made over $6,000 more in 2017 than 2016, and the trend looks to continue as rates increase in 2018!
To improve your career, call a Smith Transfer recruiter at 812-434-2345 ext 302 or submit your info below and a recruiter will call you by the next business day!