Top-3 Ways of Paying Company Drivers + Top Paying Loads in Trucking

Truck driver compensation an extremely important aspect of trucking so here are the Top-3 Ways of Paying Company Drivers. There's an unlimited way of paying company drivers but there are 3 primary ways which are generally accepted by truckers in the trucking industry.

Each approach has their own pros and cons and this is what we'll be looking at in this video.

The 3 most frequently used ways of paying company drivers are CPM, Percentage, and Flat Rate. CPM can be understood as cost per mile or cents per mile. This is the most frequently used way of paying company drivers in the trucking industry and has its own pros and cons just like the other two approaches.

The second approach is percentage based. This is where the trucking company pays the truck driver a percentage of their weekly gross income. Finally, there is the third way which is a flat rate program where the trucking business pays the trucker a flat rate no matter what happens that week.

CPM pay comes with the benefit of having a predictable pay schedule for both the company owner and the truck driver. The owner knows that based on the Hours-of-Service (HOS) regulations, the driver can hit a maximum number of miles and so their pay is capped which creates a predictable cash outlay for the trucking company owner. The same can be said for the company driver since they can easily calculate and guesstimate their upcoming paycheck.

The problem with CPM pay is the limited freight market those drivers create. Most CPM drivers are against going OTR to all 48 states and this limits the market. They may stipulate their unwillingness to travel to New York City because of the traffic, Philadelphia because of a lack of semi truck parking, not going to California because of tight truck regulation and low speed limits, or not going to any mountainous regions because of weather conditions.

The percentage based driver comes with the benefits of being a generally much more malleable driver, thus creating an expanded freight market. They can be talked into going to places a CPM driver may otherwise refuse to drive to. A company truck driver paid on percentage is paid on the amount of gross income that he's able to earn. Thus they may understand that going to Florida or most states in the Southeast will not make him much money. They may be much more open to going to New York or other Northeast states.

The problem with a percentage based driver is their unpredictable nature. They may pick up and leave the trucking company, leaving them owners with all of the fixed expenses and no income. In this elevated market and truck driver shortage, it's possible that a company may overpay a percentage driver who will then save their money and purchase their own equipment to open their own trucking business.

Also, since a percentage driver will require rate confirmations, seeing the gross invoices may grow a sense of alienation and animosity toward the company owner. May truck drivers don't know about trucking company operating costs and may grow resentful thinking they're making the company owners rich while they put in all of their labor for a smaller portion of the gross income.

Finally there's the third type of driver which is paid on a flat rate basis. This way of paying company drivers also comes with its set of advantages and disadvantages. The advantage of paying a company driver on a flat rate is that it creates a predictable fixed expense for the company and a predictable paycheck a driver can count on every week. The disadvantage is that a flat rate pay structure often brings out the worst qualities in people and they become lazy. They become complacent, late for pickups and deliveries, and you may find them driving slower and generally taking their time on things which they would otherwise do quicker.

There is no right or wrong way to pay company drivers and it will ultimately come down to what will work best for the trucking company in questions. We as dispatchers generally prefer working with a CPM driver because they are easier to book for and manage and we find this also makes trucking company owners more money as well. A trucker paid on percentage often doesn't know about the different freight market dynamics and may require a high paying load in any part of the spot market. This is usually impossible to achieve and so they may find themselves missing out on high paying loads and putting on less profitable miles.

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