As technology continues to shape the way in which the logistics industry operates, data shows a disappointing trend in paying truck drivers. To keep goods moving and cash flow high for carriers, it is critical that freight brokers and logistics service providers pay carriers, drivers, fleets, and owner-operators quickly. Truck driver per mileage pay and how often a trucker gets paid have fluctuate over the years, but at the end of the day, like all businesses, keeping all parties involved in moving freight operational keeps overall capacity high and rates lower and ultimately more efficient.
TruckingInfo reported, “According to one estimate from the U.S. Department of Labor, if trucker wages had kept up with inflation after deregulation, a driver would be earning over $100,000 a year. Instead, in 2016, the average driver only took home $53,000.”
Surely an industry that is essential to daily life can learn how to calculate truck driver pay to be fairer to drivers. This article will assess how truckers get paid today and its impact on brokers who want to be more transparent in their payment methods.
How Much Do Truck Drivers Get Paid?
Despite the innovative ways trucking companies find and get paid for more loads, drivers are not seeing an increase in their take home pay. FleetOwner reported that in 2019, , the median salary for a truckload driver working a national, irregular route was more than $53,000, a $7,000 increase from ATA’s last survey, which covered annual pay for 2013.” Data trends show that the salary of truck drivers has remained stagnant over the past three years. . According to FleetOwner“in 2019, private fleet drivers were paid approximately $1.35 per mile in combined wages, benefits, and bonuses, while for-hire drivers were paid an average of 69.3 cents per mile in combined wages and benefits.” An example route breakdown for an average driver could be 1,000 miles multiplied by a $0.55 rate per mile, equating to $550. Provided the driver has done everything in the broker-carrier agreement, the amount they will receive may even be less if the broker fee is not included before that calculation. The profit reached from a load might go towards paying certain bills to run the business, such as insurance, equipment rental, and maintenance, and payroll. which minimizes the amount taken home at the end of the day.
As more transportation providers adopt industry trends that follow new accounting best practices, some companies, such as AMX Logistics, are considering an hourly approach to pay drivers to solve how truckers get paid. A pay drivers by the hour, so they are compensated better for their time, particularly when a driver has dead time, waiting for shipments to load or unload, to freight payment services brings in the ability to pay drivers amidst traffic, dwell time. Despite the potential complexities of hourly pay, this could be the best way for brokers and fleet managers to pay truckers for the actual value of their work AND the total time spent making the delivery.
The hourly approach is often only available for employed drivers instead of owner-operators who negotiate their hauling contracts. Some companies pay their drivers with a a mix of truck driver mileage pay compared to hours on the job. The hourly approach also answers the trucker’s demands to count their safety checks, unloading, and loading as part of their work instead of an unpaid but required job element.
There are often added variables required when calculating how to pay a truck driver. Although the individual experience of a truck driver does play into total compensation, there are other variables such as drive time, route, inclement weather risks, specific rates associated with the area, special handling requirements, and endorsements required (such as Hazmat or alcohol distribution). Through these intricate details, a freight payment service provider can guide brokers toward fair compensation that is mutually beneficial for all carriers.
Why Brokers Need to Answer How Much Do Truckers Get Paid Per Load First and Foremost
Learning to sell as a freight broker is an intricate job centered on industry connections. Freight brokers should also understand how truckers get paid. Not offering enough compensation for the load means no trucker will take the load but if the broker offers too much margins are lost and cash flow is hampered.
Brokers who discuss payment terms with carriers while prospecting shipper customers understand that many shippers expect up to 30 days to pay an invoice. Although this has been a the norm among the supply chain, floating payment this long iis risky for those who are looking to open or start a brokerage. With this information in mind, it’s clear that how truckers get paid is incredibly impactful for freight brokers trying to manage cash flow. Ssmall brokerages have utilized bank loans and credit cards interchangeably as an advance to float between payments. So, how does knowing how truckers get paid minimizes cash flow risks? Enter freight factoring.
Freight factoring is a service provided by large financial institutions that offer carriers immediate payment. Carriers submit their invoice, proof of delivery, and bills to the factoring company which then sends an invoice to the shipper or broker. freight factoring companies charge for this type of service, and the fee varies depending on the company. Carriers should depend on a reputable factoring company that offers transparency and minimal fees to use, like HaulPay.
How Often Do Truck Drivers Get Paid?
When a carrier gets paid depends on a multitude of factors. For example, there might be specific payment terms described in broker-carrier agreements or depending on the company they work for. The relationship between a carrier and broker may also impact how truckers get paid. Veteran drivers who get contacted by a broker with new authority might be hesitant to take a load and may request upfront payment to work together. Healthy working capital gives a brokerage the freedom to determine how truckers get paid by pairing partnerships who appreciate shortened pay windows or create a company standard for how quickly they pay their bills regardless of when they are born.
Brokers need to consider that unregulated payment timeliness impacts freight carriers as well. If a carrier is trying to improve cash flow, they will likely be very involved and knowledgeable during the contract or agreement process to ensure they are being treated fairly. Or they may blatantly refuse a load because the payment terms are not feasible.
The amount that truckers get paid per load depends on who they work with and what terms and agreements they have. Another reason that flexible freight factoring continues to gain traction is how truckers get paid today.
Boost Trucker Payment Processes With ComFreight’s HaulPay Now
By partnering with the right payment processing partner, freight brokers can focus more on minimizing their tender rejection by providing compelling contracts with fair pay to the carrier at the right time. To put the benefits of the freight bill and invoice factoring to work today, request a HaulPay demo to introduce risk-free automated freight pay to your business.
