Custom Pay
32 OVERDRIVE FEBRUARY 2010 fleets reverted to mileage pay. Despite these missteps, at least five significant carriers have asked us who does it and how it works, Amen says. They're thinking long-term. They want it (percentage pay) now because their rates from shippers have dropped and they're still having to pay drivers the same amount (per mile), which has hurt their margin. They'd rather have everything variable, so the driver made less. Other carriers, however, have been forced to cut pay as business slowed. Amen says he's hearing of carriers tweaking their packages maybe taking a penny or two away from base-mile pay. They're going from a 5.5 mpg fuel sur-charge average to 6.5 mpg, or they're not paying for base plates and licenses like they used to. These are things that add up to probably 1 to 3 cents a mile, things the driver may not notice as blatantly as a huge pay change. Another factor affecting compensa-tion programs is the growing impact of intermodal transportation. Rail is taking away business from carriers that relied on coast-to-coast routes. Carriers have adjusted by shifting to more regional hauls. Klemp expects to see more pay plans adjusted for regional and length-of-haul factors. The good news is owner-operators have done a good job of compensating on the cost side, Klemp says. That's how they're keeping their heads above water. Amen says many carriers spent the early 2000s creating pay packages that were owner-operator-friendly. Although some companies have backed off that strategy, they may move back again to programs that appeal to owner-opera-tors. They don't want to be caught in a situation where they really want drivers and have to totally revamp their pay systems, he says. Custom pay Barr-Nunn runs a mileage-based program that takes into account length of haul and geographical differences. The carrier's band pay mileage program covers over-the-road and some regional pay packages. Every operator receives extra pay based on length of haul on top of the base rate of up to 91 cents a mile, says Jeff Blank, director of recruiting. Band pay ranges from an extra $1 a mile for hauls up to 100 miles, or $1.91 a mile, down to 2 cents a mile extra for loads run-ning from 551-1,000 miles, or 93 cents a mile. For the carrier's average length of haul of 450 miles, the band pay is an extra nickel a mile, or 96 cents a mile. We wanted to com-pensate owner-operators more for the length of haul coming down, Blank says. If you're looking at a per-centage plan, we're looking to share more with owner-operators. The Iowa-based carrier passes along to owner-oper-ators all of its fuel discounts and pays fuel surcharges on all miles, loaded or not. It also offers geographical pay differences, with higher pay in the Northeast, for instance. Another attraction for Barr-Nunn's estimated 80 owner-operators is apprecia-tion bonuses $387.50 for every 30,000 miles during the first 120,000 paid miles and $562.50 every 30,000 miles thereafter. And there are no safety qualifiers on them, The expanding pay plan cafeteria In their competition to attract and retain owner-operators, carriers have a broader menu of compensation programs to reflect the realities of dif-ferent hauls. The National Survey of Driver Wages docu-ments these changes as of the third quarter of 2009.