I had a thought about hourly pay for drivers ...


Site Supporter
@groch how do you feel about gas everyday? But you are use to it correct? Commodities prices all over the place on daily basis but word deals with them. What will you be paying for Florida fruits and veggies this year compared to last? Trucking has lots of delays that have no attachment to drivers performance but cause them lost income as well trucking companies. Why do you think this is impossible to change?


Site Supporter
Shakey, I believe we are all experiencing the effect that the "commodity" called transportation is having on our industry. A dramatic increase is cost. This has occurred without any quantum leap in how rates are determined. It occurred naturally as supply decreased. No one is disputing the fact that rates were overdue to increase, but to say that the entire rating process has to be changed to deal with the new reality is perhaps a bit premature. I support Michael's idea that carriers should look at how they calculate their rates in a different manner based on this new climate, but as long as you are getting what you need to be profitable, who cares with how you come up with that number? If you need one dollar, what is the difference if you get it in four quarters or ten dimes?

Freight Broker

Well-Known Member
This brings to mind a customer sales call I did years ago..The shipper was obviously an older guy who had no time for BS. I quoted him a rate.. plus fuel adjustment.. plus time after two hours.. plus plus plus.. He called me back and hollered: "CAIN'T YOU JUST GIVE ME A F***NG NUMBER?! In a nutsell that's what all shippers want.. How much is this going to cost?.. just one number please.. most will tolerate a fuel surcharge.. and one or two conditions.. but an hourly rate plus conditions? I doubt it.

Jim L

Active Member
Time for me to chime in - there are a lot of angles that are being put out there.

The idea of per hour rate for our trucks and drivers has been kicked so many times it isn't funny. I believe that Michael has suggested this a dozen times at least. I believe that this thinking is coming around because we need drivers and we're trying to find a way to make it lucrative enough for a driver to come work for me instead of someone else. Hourly pay for drivers starts the ball rolling and it gets extrapolated to hourly pay for equipment.

Lets start with the driver; the driver is an unsupervised employee working in his/her own environment. Yes we have visibility to speed, moving times and a variety of other aspects in his life while at work but do we have the time to micromanage every point of these? It would not make sense to pay a person to watch a drivers every move when it is expected that the drivers do what they are supposed to do to the best of their ability. If you did hire a person to manage it, the cost for this person may not add sufficient value to a cost effective alternative. The fact is that the industry has paid by the mile to give the incentive to the driver to do the best possible job under the conditions they are given. If the problem stems from dispatch or load availability, they will have to push their concerns up or choose to go somewhere else that may be better. A good management team will constantly review the driver pay with all the other metrics they check and work at its best to ensure the company is running at its optimal balance. The fact is that a driver needs to make X per year and how the carrier gets there doesn't really matter. How they come up with their pricing will include their driver costs.

Charging freight costs by the hour would be nice but I don't think it will get anywhere. Just like it is hard for the carrier to manage the drivers optimal performance, there are less options for the customer to manage the time. As a carrier, we have removed the volatility of fuel by adding a fuel surcharge component to the freight costs for regular freight. This came about due to the fact that fuel was erratic and volatile. If everything was spot quoted we wouldn't need it but shipper CEO/CFO's want price stability and this was a way to get a year round price locked in. Driver pay, at a per trip level, is not volatile enough for the carrier to come up with a way to mitigate its potential risks by passing it down to the freight payor. The analogy of the taxi cab is not pertinent because the payor is in the cab with them and can be assured the driver is working to the best of their ability.

All businesses take the risk that their costs are not always going to be reflected in the price they receive for their goods and services. The margins they expect may be less or even negative if the costs change quickly. Do you think that shippers in the past quarter saw the freight increase coming and increased the costs to their end customers? Some may have but not the majority. I don't think we'll see per hour rates for the truck no matter how we decide to pay the driver.

Freight Broker

Well-Known Member
Productivity based compensation is better than hourly because then everyone, from the business owner on down, is incentivized to be productive. Most of us who own businesses are paid straight commission... why shouldn't people who work for us be paid the same way?.. or on some other performance based system? The idea that hourly pay will bring more drivers into the industry is flawed in that the amount of money available for driver pay hasn't changed.. its still X dollars no matter how it's doled out.. i.e. hours on the job.. percent of revenue, or mileage. Drivers get excited about hourly pay because they see MORE money at the end of the rainbow.. they think that now they'll get paid for ALL of their time.. and maybe they will.. only the rate of pay will be watered down so it comes out to the same as mileage (or maybe less even).


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