Hourly Pay for OTR Drivers.

Hopefully CH's customers pay hourly too... otherwise they're going to find out real fast that this is a real stupid move. It would be really nice if Carrier Dumb could pay drivers for every possible delay under the sun... bad roads, traffic, tornados, flat tires, flooding etc.. but in the real world that's just not possible. No customer will pay a carrier for these delays so we all have to deal with them as best we can without expecting compensation. Furthermore hourly pay works against efficient capable people to the benefit of the less capable and less efficient. My guess is that CH wil do an about face on this just as Kriska did a few years back... he quickly yanked the foot out of his mouth as soon as he realized the magnitude of the cost involved. Curiously, no mention about hourly pay for owner-operators..and my undersanding they're mostly owner-op.. I guess, once again, the independent contractor doesn't count.
 
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I don't see this as a big difference vs what they would pay per mile. I think no matter what, when you are rating a shipment you take into account how much time it's going to take to get the load done. I know for myself, if there is a client that I know is going to take me longer to load or unload, I'm going to factor that into the rate.
While yes, it can work against the efficient and will benefit those that are less efficient just about every other industry pays by the hour and they seem to make it work. What it comes down to, is why shouldn't the drivers be paid for every delay and every issue that is out of their control? Would you work for someone else for free as much as the drivers do?
As for owner ops, since they are paid a percentage of the gross (most companies) if the rates are being done properly the time needed to complete a load should already be included.
 
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It all comes down to grade 9 Economics. If you are in a business that quotes a fixed price however the majority of your costs are variable, you drastically reduce the chances of making any profit. Your only hope is to quote based on a "worse case scenario" to cover yourself. Problem is that you will be awarded very little business unless everyone else does the same. Delay's will happen that are out of the carriers control. Until rates are based on time and mileage with customers agreeing beforehand to pay for clearly spelled out accessorial charges the problem will continue forever. I cannot think of any other business with the same pricing structure.
 
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And just wait until winter kicks in this year....drivers down for 1 or 2 days on the clock....try billing that back to customers.
 
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Trucking is different for most businesses in that the work envirnment is to a great extent beyond the employers' control. Let's take a receptionist in a doctor's office. She can be paid hourly easily enough because all facets of her work environment can be tightly controlled by her employer.. i.e. acts of god and bad luck are minimal. Of course, in a perfect world a driver should be compensated for everything... he/she should be paid when snowed in.. when flooded out.. when there's been an accident and he/she is lined up on the 401 for six hours. But in practice that's totally unworkable (as CH will soon discover).. Unless they have customers who are willing to pay based on worst case scenarios, they're going to go in the hole fast. I know that's not perfect, but it is what it is. We in business do not get paid for everything that goes wrong either.. I made 30 sales calls this morning and got nothing.. and I got paid nothing either. In a perfect world I too should be getting X dollars an hour for my time..
 
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In our business, I can't ask a carrier to give me a rate based on "time and materials" as I might with a handyman rebuilding my old garage. It has been and most likely will continue to be, an "all in" price in spite of the problems that might occur in performing the job.
 
So,

We can agree that this industry is a two way street. Perform the service agreed at the rate agreed and everything is ok. Mistakes are made and sometimes rates are adjusted (hopefully all parties are in agreement) and there has to be a level of honesty by all parties and trust that we are all working together for the same goals (service the customer, make a fair profit).

Throw hourly rates into the equation and you need to drastically increase the trust factor (hard to do in transport).
"I need a little extra as my driver spent 4 hours heading over the top of the GTA o a Friday afternoon."
"Oh, what route did the driver take, I google mapped it and played with the routing and find it can be done in an hour."

Hourly? maybe for local P&D, but not for long haul. Too many variables.

Keep well,
Mike
 
Strange.. the folks who constantly say they can't find drivers still don't seem to understand that one of the main reasons why nobody wants to do this shit paying job anymore is because they're tired of working and not being paid for all of their time...

Elogs are just going to drive more out when you're forced to log 6 hours to drive 240 miles and earn pretty much minimum wage.

You would have thought folks would have appreciated the safety aspects of paying hourly but I'm not surprised at the reaction from those here. It's what I expected.

Drivers, however all seem to love the idea of hourly pay.. imagine that..the notion of actually being paid accurately for all you do.

Elogs easily make that possible.

Oh and on a side note... that overtime issue.. I'm in possession of correspondence from the feds and well.. I hope you're all in 100% compliance. ☺
There were some changes introduced which are going to give more enforcement measures and monetary penalties for those crooks who continue to steal from drivers by not paying it.

To quote: You may be interested to know that legislative amendments to the Code were recently introduced in the Budget Implementation Act to address cases of employer non-compliance. Once implemented, the amendments will provide Labour Program inspectors with stronger compliance and enforcement tools. For example, inspectors will have the authority to apply administrative monetary penalties and impose surcharges on payment orders issued to an employer. "

And there has also been ongoing meetings held between federal officials and members of the driver’s advocates furthering the issue.

Times are changing folks.
The industry asked for elogs.
Well that's the new reality.

Drivers are going to work for those who respect their time.
 
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Lots of people are drivers... look at the 401 even at 2:00 am... truck after truck after truck... each one driven by someone who chose that profession. In fact truck driving is THE number one line of work for the Canadian male... (and growing among females as well).. Why? They're not hiring tree surgeons? It's really not that bad of a job.. not perfect by any means.. but not bad either.

There's always going to be a trade off between productivity and safety.. The current mileage based system plus bonuses (including safety bonuses) incentivizes drivers to be both prodcutive and safe. Hourly pay, on the other hand, would bill the carrier for every imaginable delay under the sun... of course drivers would love that.. (who wouldn't).. but the money just isn't there to make that happen..

Elogs are fine.. they will improve the industry overall as a commom complaint that's been voiced since I've been in this industry (30 years) is that the honest compliant carriers get undercut by the rogues who cook their logs and run imaginary teams... All that will go out the window now, and finally all carriers will be on the same playing field. That fact alone will likely increase rates as those rogue carriers will be tamed into quoting based on realistic travel times without pushing their drivers unduly. But will there be enough money in it to pay drivers for every conceivable delay? I highly doubt it.
 
Of course..why should drivers be paid honestly when crooks can exploit them...

Tell me again how fleets are literally turning drivers away because they have too many applicants ???

I could have sworn I'd read many a time on here that fleets couldn't find drivers.

There shouldn't be a tradeoff between safety and productivity. Isn't that the very basis for elogs to begin with ? To ensure everyone puts safety first instead of productivity which was the norm..

So um..why are you so opposed to an honest method of pay which is calculated from the very elogs which show every minute accurately?

Because you can't find those dozen drivers for a dime anymore ?
 
I'm not opposed to honest method of pay... and productivity based pay is probably more "honest" than hourly as in the former the employer is actually paying for services rendered while in the latter the employer is paying for someone's time on the job. Personally, I prefer paying for the service I want verses for someone's time.. time which is of value to them no doubt but which has no value to me. The driver shortage is vastly overstated... do you see freight piling up due to no driver availability? I sure don't. What we have is high driver turnover... driver goes to work for carrier A and then quits.. so Carrier A puts an ad in a mag for another driver... driver goes to carrier B and quits.. so carrier B also puts an ad in a magazine for a driver... and so on. You end up with a magazine chock full of driver ads which may give the uninitiated the impression that there's a shortage of drivers. We may indeed be down some drivers overall.. but its not the critical crisis that its sometimes made out to be. Work on the sales side for a bit and you might come to understand the problem with hourly pay for unsupervised people working in an uncontrolled environment. Rates are established by supply/demand and quoting worst case scenario to cover any possible eventuality your driver might encounter will likely result in no freight available to haul.. In a perfect world maybe.. but not in this one.
 
It is impossible to quote every possible eventuality. The fact is though, the majority of the time, those types of delays and worst case scenarios don't happen. All hourly pay does is shifts the cost when those delays from the driver to the carrier.
 
Is Movin Freight going hourly too? I haven't seen any announcements to that affect..If the delays don't generally happen then may as welll keep the curent mileage system..
 
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We have not made any decisions yet one way or the other. We are taking a wait and see approach on what the true effect ELDs are going to have on our drivers. All I am saying is that it is an interesting concept that is at least worth exploring and discussing. Just like mileage pay, there are pros and cons.
 
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The biggest problem is that drivers are unsupervised employees. I'm afraid that if the driver was being paid hourly they would become ineffective. Currently, the mileage/drop pay works because the driver has an incentive to get things done weather that be calling dispatch, finding an alternative way around an accident, working within their HOS to drive through high traffic areas at a different time other than rush hour etc.

We see the same issues with hourly city drivers. Some drivers need to be called to ask what is going on, other drivers are calling me when there are 10 trucks ahead of them at a delivery to see if is anything that can be done.

When thinking through scenarios like this I like to exaggerate the possibilities to see what is a worse case scenario. Lets say an OTR driver from Toronto to Vancouver takes 8 days to drive there because he drives slow, stops for coffees too often, then needs washroom breaks because of the coffee. At 8 days the customer will be unhappy. The carrier will pay more money for driver wages (remember one of the largest input costs) and become ineffective because his tractor/trailer and in-process cash flow is not working optimally. How do you get that driver to become more effective without threatening to replace him? There is certainly no incentive - he lives in the truck and it doesn't matter to him, he's getting paid either way. On the other hand, a mileage/drop pay will sort this out financially - the driver will identify quite quickly that he makes more if he keeps moving.

I don't think you'll see the mileage/drop pay go away. It is simply the best method to financially pay a person for work done. Those who work hard and get stuff done will be paid more, those who are ineffective will get paid less. The carrier will just have to decide where to draw the line for the ineffective employee.
 
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Jim L said:
The biggest problem is that drivers are unsupervised employees. I'm afraid that if the driver was being paid hourly they would become ineffective. Currently, the mileage/drop pay works because the driver has an incentive to get things done weather that be calling dispatch, finding an alternative way around an accident, working within their HOS to drive through high traffic areas at a different time other than rush hour etc.

We see the same issues with hourly city drivers. Some drivers need to be called to ask what is going on, other drivers are calling me when there are 10 trucks ahead of them at a delivery to see if is anything that can be done.

When thinking through scenarios like this I like to exaggerate the possibilities to see what is a worse case scenario. Lets say an OTR driver from Toronto to Vancouver takes 8 days to drive there because he drives slow, stops for coffees too often, then needs washroom breaks because of the coffee. At 8 days the customer will be unhappy. The carrier will pay more money for driver wages (remember one of the largest input costs) and become ineffective because his tractor/trailer and in-process cash flow is not working optimally. How do you get that driver to become more effective without threatening to replace him? There is certainly no incentive - he lives in the truck and it doesn't matter to him, he's getting paid either way. On the other hand, a mileage/drop pay will sort this out financially - the driver will identify quite quickly that he makes more if he keeps moving.

I don't think you'll see the mileage/drop pay go away. It is simply the best method to financially pay a person for work done. Those who work hard and get stuff done will be paid more, those who are ineffective will get paid less. The carrier will just have to decide where to draw the line for the ineffective employee.
Click to expand...
ELD monitor and record everything.
Right down to the decimal point on the odometer reading.

You can tell immediately if the driver is dogging it.
 
snafu said:
ELD monitor and record everything.
Right down to the decimal point on the odometer reading.

You can tell immediately if the driver is dogging it.
Click to expand...
Yep, but you don't need an ELD to know if he is dogging it - its pretty obvious. Like I mentioned, if the driver is paid by the mile then there is no extra money out of the carriers pocket, just efficiency issues. The carrier just has to identify weather it is an ongoing issue (ie. fire the driver) or a situational issue (weather, traffic etc).
 
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