The Case for Hourly Pay Trucking
Hourly pay seems like a crazy phenomenon for the trucking industry, where per mile rates rule the road. Per mile pay seems like the better solution on paper: fleet owners can find the number of miles that need to be traveled, multiply it by rate, and then figure out the payment due to the driver. Such a simple model, however, undermines the extraneous segments of the cost equation.
Benefits
Paying an employee regardless of how far they travel motivates them to slow down. As such, they obtain all the benefits of driving more slowly.
Fuel Efficiency
Each mile per hour of increased speed adds more wind resistance than the last, making 55 miles per hour the generally accepted balance between fuel lost to wind resistance and the energy burned passively from running the truck.
While not alone enough to cover any wage gap between mile and hourly rates, the gallons of diesel fuel saved over the course of the day by not motivating a driver to speed can mitigate any additional costs.
Less Catastrophic Accidents
It does not take an expert in physics to understand that a slower-moving object expends less energy on collision than a faster-moving one. Some accidents are unavoidable, and getting into a collision at 55 miles per hour opposed to 70 can mean the difference of thousands of dollars of damage, or even lives.
If that alone is not enough, a lower speed gives the driver time to react to hazards, reducing the number of accidents overall.
Insurance
Adding on to the previous point, less speeding and fewer accidents mean saving money on insurance for the driver, as the driver is a lower risk for the insurance company to take.
Driver Satisfaction
A driver knowing they will be paid a consistent amount regardless of traffic or weather conditions leads to less anxiety, reducing the chances of turnover in an industry where there are more trucks than bodies to operate them. With hiring costs ranging from $5,000 to $10,000 per trucker depending on the methods used, keeping a company driver happy prevents costs equal to dozens of hours of profit-generating driving time.
Potentially Reduced Cost of Wages
When hiring someone new, a driver may be willing to take what would otherwise be a lower rate for a consistent pay.
As an example, consider two drivers who drive the same distance of 400 miles during a nine-hour period. The driver being paid fifty-five cents per mile nets $220, and the driver getting paid $23 per hour makes $207 for the day, assuming his contract exempts him from overtime pay.
Of course, this is offset by the days where they both travel fewer miles due to traffic, but the potential for saving money on ideal conditions does exist.
Conclusion
Paying a trucking employee per hour rather than per mile might seem like a bad idea on paper, but the numerous cost-savings it applies can add up to create a net benefit for your company. While the hourly pay model may not work for every business, it is at least worth the effort to run the numbers and see if the reduced strain on drivers does better for everyone involved.
CORONAVIRUS [COVID-19] UPDATES AND ARTICLES
- Trucker’s Guide to When Every State is Reopening
- FMSCA Extends Hours of Service Relief Declaration
- How Truck Drivers Can Keep Their Cabs Clean During COVID-19
- International Roadcheck Delayed Over COVID-19 Fears
- Pennsylvania Reopens (Some) Rest Stops
- Truck Dealers Seek “Essential Status”
- Navistar And Paccar Halt Production
- Mack And Volvo Suspend Truck Production
- Fmcsa Expands Its COVID-19 Response
#THANKATRUCKER
ABOUT TOPMARK FUNDING
TopMark Funding is a top-rated semi-truck financing and trailer financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.
We’re not here for the short-term, we’re on the long-haul with you!
We have financing options for trailers, semi-trucks, commercial trucks, and small businesses. We have great rates, low down payments, and flexible monthly payments regardless of credit history.
Learn more about Trailer Financing.
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.
