From my understanding they do this or else they would find ways to charge us if we went the wrong way, etc
From my understanding they do this or else they would find ways to charge us if we went the wrong way, etc
Interesting, I never "heard" that. I think it has more to do with simplicity, but you might be right. Although unlike our friend Matthew's experience, I have found over time it has a way of working itself out. There is merit in the logic of a longer run compensating for a variance, where as multiple shorter runs will begin to run up a larger gap in miles driven vs. miles paid.
Not sure if our resident LTL expert, 6-String is reading any of this, but I'd like to see him check-in on this topic to see if the LTL's have the same zip-code to zip-code practice.
Refers to carriers that make a lot of smaller pickups and deliveries for multiple customers as opposed to hauling one big load of freight for one customer. This type of hauling is normally done by companies with terminals scattered throughout the country where freight is sorted before being moved on to its destination.
LTL carriers include:
Interestingly enough I had a conversation with the Operations Manager one time years ago at US Xpress and learned some interesting things. The first thing he said is that on an average 500 mile run, if everything goes perfectly (no tire blowouts, breakdowns, etc) the company makes an average profit of about $50. So imagine that - you buy a $100,000 tractor, a $60,000 trailer (dry van), you pay piles of insurance and other fees, hire a driver, and have him haul freight 500 miles and hopefully you'll make $50.
The other thing he said is when trucking companies negotiate freight contracts they rarely lower their rates. Instead they'll drop the number of paid miles for a run if they want to do it at a cheaper price. That's why you're seeing a variance in the paid mileage, because you're getting paid for the same number of miles the company is getting paid for the run which is always a little shorter than it actually is. That's also why some companies pay a percentage of the load instead of by the mile - because they would be hurting their bottom line if they paid you for all the miles but only charge the customer for 90% of them. And yes, the actual miles a company will negotiate for goes by the Household Movers Guide miles, or at least they start out there.
I always watched the difference between paid and actual mileage. If it was more than 10% or so I'd say something to dispatch and they'd almost always bump my miles up a bit for that run. Not every time, but most of the time. And of course I was already a proven driver and I always made my request in a friendly, professional manner. That makes a big difference.
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Oh, I knew what I was getting into. That doesn't mean I have to pretend to like it.
The thing about zip code miles is that if it were done without bias, the average mileage over time would be roughly the same as hub miles. But it's not. I always get paid less miles than I drive. Every Single Time. I have never had a negative variance.
After several months of collecting pay, the chances of this occurring so many times in a row without the company somehow fudging the numbers is effectively zero.
But I'm not getting out of the truck. The pay is still there, even if it's not what it should be, and the longer the run, the less impact zip code miles have on my bottom line.
On a good note, after so many shortie runs, I picked up a dispatch last night going from Memphis to LA and just stopped a bit west of Oklahoma City.
The bad thing is that it's three drops in the LA area, the first drop is 10 hours before the third. I hope I'll be able to get this repowered to a local at the Colton drop yard, because three drops in ten hours is going to ruin a good run.