Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/566087
24 | Overdrive | September 2015 Detention détente industry get comfortable with sharing information. Easier to say than to achieve, of course. If undue detention can't be avoided, a detention pay clause in con- tracts with customers, combined with a clear policy for drivers, helps offset the time wasted. In an OverdriveOnline.com poll, half of leased owner-operator and company driver readers report receiving guaranteed detention pay, and the other half say they receive the pay only if their carrier collects it. In these profiles, three small fleets discuss how they've worked through detention issues. Cadle Trucking Augusta, Ga. NUMBER OF TRUCKS: 9 After a few years running under his own authority, flatbedder and heavy hauler Ben Cadle, owner of Cadle Trucking, decided to lease to Bennett Motor Ex- press in 2011, becoming an agent for the carrier and bringing his customers with him. Though he readily acknowledges that detention issues are bigger problems for haulers of box trailers – he lives it, too, with 10 percent of his freight being paper products moved in a dry van – it's an issue on at least half of his trucks' loads, he estimates. Whether or not Cadle gets detention Calculating fair detention rates As shown in the examples in this story, there are different ways to skin the cat when it comes to setting rates for detention. In recent Overdrive polling, readers indicated either total revenue per mile (38 percent) or profit/net income per mile + fixed cost per mile (45 percent) as appropriate benchmarks for detention rates. Below find what the latter of those could look like based on the average own- er-operator business income and mileage numbers of independent owner-operator ATBS clients in 2014. Such one-truck independents made more than $60,000 in net income on 97,500 miles on aver- age. Those clients' average fixed costs (including truck and trailer payments, insurances and the like) are added in the second part of the calculation to be covered under the final rate. Just matching profit, or net income, in detention rates doesn't fully cover owner-operators' costs, says Todd Amen, ATBS president; including fixed costs makes for a more accurate compensation. In addition, but not part of the calculation below, you can add your average variable hourly costs to idle or run alternative climate-control devices. PROFIT PER MILE $60,150 ÷ 97,500 annual miles ——————————————— ———————————————————— —————— 62 cents per mile + FIXED COST PER MILE $43,500 ÷ 97,500 annual miles ——————————————— ———————————————————— —————— 45 cents per mile = $1.07 PER MILE x 60 mph average highway speed ——————————————— ———————————————————— —————— $64.20 per hour detention rate Profit per mile + fixed cost per mile x average highway mph Total revenue per mile x average highway mph Profit per mile only x average highway mph Best basis for a fair detention rate? 45% 38% 17% Other approaches to detention offered in the comments under this online poll at OverdriveOnline.com included the notion of offering customers discounts on the line-haul rate for expedited loading/unloading. OverdriveOnline.com poll Small fleet owner Ben Cadle and his company flag- ship 2013 Freightliner Coronado glider Todd Dills