Whether you’re looking for overnight, expedited, or same-day transportation, the rate per mile is a key area of concern, allowing you to break down your costs and giving you the opportunity to anticipate the needs of shipping to different parts of your area. Logistics companies often provide a key figure to help you do exactly that, so handling multiple deliveries to various locations is a lot easier.
Moreover, mileage rates are often negotiated between the driver and the shipper, but federal and state regulators also set various rules. These rules may mandate a minimum amount of pay per mile or specify that rates be determined as a percentage of revenue.
Cost Breakdown of Trucking Rates Per Mile in 2022
- Federal Mileage Rate – Class 8 Trucks
Federal regulations require all motor carriers transporting property for others, including motor carriers of consumer and commercial goods, to utilize a fixed mileage rate. The Federal Motor Carrier Safety Administration (FMCSA) tenders a set amount per mile to the Federal Highway Trust Fund (FHFA). For large trucking fleets, several options are available to improve their coverage and minimize risk under the FHFA – Class 8 program.
- State Standard Mileage Rate
Every state has its mileage rate, which may differ from the federal one. Many states also have rules that determine when a rate increase can take place or which are subject to negotiations with the driver.
- Shift Differentials
Changes in trucking rates per mile come through the fluctuation of the economy, oil prices, and other external factors. For example, in 2009, movements rose by over 10% due to demand for commodities such as coal and natural gas, causing many companies to start up activity again in 2010. In 2013, there was an increase in fuel costs due to increased demand for crude oil and natural gas, as well as an increase in wages across the US.
- State Work Rules
State trucking regulations may require a minimum rate per mile, set the pace according to actual expenses, and specify how much of the company’s revenue is spent on driver pay.
- Driver Pay Percentage
Drivers can negotiate a rate that differs from federal and state regulations and how much of the company’s revenue is spent on driver pay. The BLS reports that most driver pay percentages are around 100%. However, in some cities across the US, drivers agree to lower percentages to gain better opportunities. This percentage is between 5% to 10% for long-haul drivers on relatively short routes and can reach 40% for drivers operating in an outlying area. It may be more economical for truckers to pay a higher percentage of revenue to shed expenses and increase profits.
- Pay per Mile
Most of the trucking industry’s drivers agree to work in a fixed-rate scenario, regardless of the sector or company. Many companies view this as an advantage since it is easier to calculate driver pay with fixed rates than with variable income. This can be due to drivers wanting security, the expectation that rates will increase, and the conviction that their speed is fair.
- Pay Per Mile as a Percentage of Revenue
Several drivers agree to take on fixed-rate contracts negotiated in terms of mileage instead of pay per mile. Trucking companies have an advantage over other industries since they can estimate a driver’s expenses by knowing the average rate and how many miles the truck will travel. This can help companies negotiate more profit from less spending and increase worker safety.
- Pay Percentage as a Percentage of Revenue
Large-scale fleets often negotiate their pay percentage as a percentage of revenue. The BLS reports that most drivers agree to work in this way since it is easier to calculate their earnings than when they are paid per mile. Companies also believe that these agreements help them avoid overspending since they can estimate the per-mile cost of operating a truck.
- Hourly Versus Mileage Pay
Several companies pay their drivers in a slightly different way to that of fixed-rate systems. Hourly pay is a fixed-rate system where the driver is paid based on how many hours they drive each day. It is set by the company and can be different if they use an average rate method, which calculates one base rate based on 50 weekly hours worked over the past three months. Mileage-based varies between companies and can be found off daily driving time, weekly driving time, or even asynchronously calculated.
- Pay Differences by Region
The BLS reports that most workers are paid a percentage of their company’s revenue, but some companies pay their drivers hourly or fixed-mileage, and a handful doesn’t pay any pay rate. Overwhelmingly, most trucking companies pay their drivers via a percentage of revenue, with the median being set at 100%. The Southern US has the most significant number of companies using variable driver pay.
The trucking industry is a heavily regulated sector, but it is also subject to economic and market forces. Because of this, driving rates per mile can be expected to rise and fall throughout the industry. Drivers’ pay may vary depending on their state and how many miles they go each year. But as your mileage rates increase, you can still budget accordingly and make strategic decisions based on how far your next delivery is going to.