Ep. 7: Understanding Pay Rates In The Trucking Industry

Seairra Williams, the CFO of UFFB & UFT, has built a long career working with haulers - helping them grow their business and connecting them with work opportunities in their area.

episode 7:

Understanding pay rates in the trucking industry 

with Seairra Williams

However, that is only part of what Seairra views as her responsibility. She also helps educate and empower truck drivers to learn more about their local market -- teeing their business up for success.

Pay rates are a topic on almost every trucker's mind, and Seairra helps us break down what goes into hauling rates, what to expect -- and what not to expect, from the long-haul and short-haul trucking industry.

Tune in, or read the transcript below, to learn more about pay rates in the trucking industry (transcript edited for length and clarity). 

Can you introduce yourself to our audience and explain your role in the logistics industry?

Seairra: I'm the CFO of UFFB & UFT, and we do pretty much anything related to logistics and moving. We have our fleet of dump trucks and hoppers, drive-ends, power only, and we also have a freight forwarding side where we deal with ocean and rail. We do a little bit of everything in the industry and have been for over the last 10 years.

Your company works with a variety of different shipping methods -- what are some of the biggest differences between short-haul logistics and the logistics of long-haul trucking?

Seairra: Both are equally important. I get to see the big picture. Something comes from overseas to the port, and then to a warehouse. Or from the warehouse to either the manufacturer or the company that ordered it, and then from there to stores or homes. I can't say one is less important than the other, because if you take out one ingredient, you burn the cake. Long-haul and short-haul are both equally important in order to get things moving and where they need to go.

As someone who is ingrained in the industry, do you see any similarities or challenges that both sides (long-haul and short-haul) of the industry are facing right now?

Seairra: Right now we have an unrealistic approach in reference to pricing. By trade I'm a CPA, so I'm always watching the numbers. We just had a national disaster, and we're still in it. Drivers tend to think that more money comes into the industry because we're desperate and we need that. But they're asking for rates that are unrealistic, and that hurts the industry as a whole.

As a supplier, you're budgeted to transport your goods from point A to point B, whether long-haul or short-haul, and you can't get it moved without it trickling to the bottom line and now you're at a loss for your product. When it comes to industry challenges and trends, I’m seeing a lack of education on how cost is determined. 

Cost is determined not only by the particular job that you have, or the load that you run, or the truck that you use -- dumps, end dumps, or live bottoms. You may have payment per ton, but then you also are going to be driving short distances -- back and forth. So that may be the same math when you add it up to what this person is getting per hour with long-haul. But it’s important to explain these things to drivers so it's understood that we're not trying to pull a fast one on them. 

One driver may be doing a long haul or they're sitting here or there for hours, whereas another driver is going seven miles, back and forth. But at the end of the day, it's still the same price. It's just a different formula of coming up with it. 

We have to focus on educating our carriers on the processes for pay rates in order for them to keep their business profitable. Drivers cannot come in with unrealistic demands in reference to pay. That's one of the reasons why we have this shortage right now. It's not that we don't have trucks. It's not that we don't have drivers. It's kind of a lack of trust on the rates being presented to them.

We offer drivers consistency, where you're not on a load board every day, trying to figure out work, but where you're working every day, and you know what you're doing every day. Drivers can maintain and manage a business. Again, it's education on how those formulas work and what it means to drivers. We help them come in with a realistic expectation when it comes to receiving payment for running freight.

In the dump truck world, some people post jobs with a per ton rate, while others do it by the hour.  If you're able to get a full day of hauling in, is there a different narrative that makes sense to share with drivers?

When talking to drivers and providing education, do you find a particular message is working?

Seairra: In our database we have over 7,000 carriers, and I have a call once a week and they can choose to join or not. But one thing that I always tell them is if your truck is sitting there, and it is not running, you have nothing, nothing, nothing. If you see something for $15 per ton, but you're only moving that much, in one day, that $15 is not realistic, in reference to your daily pay. Now, if I could give you $10 a ton, and I can give you seven trips and I can book you out for three weeks, then that is what makes sense. 

There’s no need for drivers to bring up the difference of a one-off job that looks good on the outside, but not when you have to pay bills and you still have to cover your truck insurance every month, and you still have to cover your fuel costs every month. 

With these types of conversation I throw myself out of CEO mode, and into CPA mode. I have to ask them -- right now, what are you doing? The numbers just don’t make sense. Once you can educate people about the big picture, they get it. The drivers we work with have to trust me to make this decision for them so that they can make sure that their business stays afloat. 

Building trust and credibility is huge. Drivers need to evaluate: is this going to have an impact on my business, not just today, but for tomorrow? Am I going to have consistent work over the course of multiple weeks? 

Seairra: Correct. I express it over and over again, the one-off jobs versus the consistent ones -- that’s so important to consider. Our company is completely technology based. Everything we do is integrated. I am a technology baby! Anything that is new, if it’s simple and easy to move, and easy to keep track of -- I'm with it.

On the other side of that, you have major load boards out there that will give a number [job rate] by a region. If I'm in the southeast, I cannot compare the price in the southeast, to something up north because those rates vary. They vary for very different reasons. In the southern states, you may have some bad weather here or there, but up north, those long term contracts have to factor in weather. They have to run in any weather. The costs to live in those places factor in too. You can't look on a board and say, I see trucks running in Chicago for $200 an hour. We know that that's not a real number when you’re located in the Delta. It just does not work that way. 

Demographics also play a role in rates. When you use technology and on a national board it just puts the information out there, and it doesn't explain to the carrier why these two rates are different, or what the different variables are that make them different, it’s hard. You also have misconceptions on why rates are different. As a company, we are not withholding anything because drivers tend just not to do research in their region. It's very important to understand in my region for my particular type of equipment, this is what the norm is. 

We have to keep expressing to drivers that we understand their region and that it’s important not to look at other regions without context. 

What are some of the ways you encourage drivers to seek out that education? Do you help facilitate that, or do you have tips for drivers? 

Seairra: Most drivers I work with use the job boards as their form of arguments. So they will take the information off our internal board and they will put their truck information in the system. The board will tell them the low-end pays this, the high-end pays this.

That calculation, for the high-end pay, means that at any particular time, only 20% of available trucks are in that area. That means the demand is high because there aren’t a lot of trucks in that area. But if you're in an area where the demand is low, meaning there are 700 trucks showing as available, in this area, you’ll need to look at the low-end of this number because now you're dealing with the power of supply and demand and competition. 

That is part of the carrier/driver relationship where drivers trust what you say. I'm trying to keep  long term relationships with all of our drivers. So it does not benefit me to withhold the truth. I always do what I say I am going to do, and when I’m going to do it. 

Agreed. It’s important to educate on why rates shift in certain markets based on supply and demand, which may be related to seasonality or other reasons.

Seairra: I think it’s important to look at peak season. During holiday times everything is moving, and you can always sell a carrier. You can tell them you get this much per mile per ton, per hour right now. But around January 6th, it’s going to change and slow down. If drivers want to run a lot in those peak seasons, they should know the peak seasons for their company. 

And of course, here’s my CPA side talking: after that peak season you're at an average rate. Now you have a reserve and in the end it comes out in the wash for your bottom line. Drivers can’t come in with one particular mindset about rates because that’s what they ran during peak season. It’s unrealistic and it’s not how the freight world works.

A lot has happened recently in this industry, mostly in response to COVID; a driver shortage and a focus on last-minute delivery are even gaining media attention. What are some of the other changes you’re seeing?

Seairra: For our business, it's the last-minute delivery and trucking that we need right now. I just was able to make $100 an hour. For long-haul, that rate is usually a one-off. But once truck drivers receive that rate once, they want the rates to rise across the board. 

As a business, we can’t accept drivers saying “this is the only rate that I’m going to take going forward.” I tell my carriers you can run it, or you can not run it, but if I put you in our truck carrier system this is what the rate is, and we can’t negotiate. Drivers need to tell me the rate that they can run their truck for. 

One question that everyone in our organization is trained to ask is “What do you need to run?” Not “What do you want to run?”  We want our drivers to trust us enough to know that if we can get you more than that, we're going to get you more than that. But if you tell me absolutely that you need $100-$125 to run, don't call me and ask me why we’re not using your truck on a specific project. I try to communicate those things up front.

I think this is rooted in a combination of bad information and bad groups. We have a social media presence on Facebook, Twitter, and Instagram. As a company, we join these trucking groups and sometimes I go in and I read some of the information. Very little of it is fact-checked. 

People will say they’re running a load in a certain area for $75. They'll say if you keep running it for $75, what's going to happen is they’re driving the price down for everybody else. So you shouldn't accept these. You have groups that are out there that are pushing carriers not to accept rates when they know our rates. This puts the blame on them for driving the price down for everybody else. 

There are a lot of false narratives that need to be corrected. Pay rates really depend on demographics. It's also about the type of truck that you have. It is whether or not, you know you’re being paid by the ton or by the hour. All these factors come in and what can you say? As a company, I don't jump in and say that, but I do like to educate drivers and say some of the things you're seeing are just false.

It's always going to be pretty consistent across the board. A shipper or a government contractor has budgeted a certain amount and that can often determine who gets the account. The whole narrative that if one driver accepts a particular job at a specific amount per hour or per ton, that they’re driving it down and making it hard for everybody else isn’t true. You have to look at the source and you have to understand suppliers.

The company’s that hold freight that we're trying to allocate can’t afford to do it any other way and still have a profit -- everyone in that chain has to produce a profit. As a carrier, we can't give you all of the profit and bankrupt our company. But we can give you a fair rate for the work that you're going to do under this contract.

We like to have great relationships with trucks and drivers. We don't enter into agreements with individuals that we cannot give consistent work to. There are rarely any one-offs and if it is a one-off, we normally have something to still keep you running the next day and every day you have work. The security of being able to keep your business afloat is not worth a fight over five cents. 

There are a lot of oversimplified narratives out there. It’s important for drivers to do that gut check -- does this work for my business? 

Seairra: I encourage people to look beyond their business to their family. Am I going to be able to take care of my family with this number? And 9 times out of 10, the answer is yes. So I can't allow other drivers to influence my decision on what I need as a rate to take care of what I have stewardship over. This all comes back to the carrier relationships. I want drivers trusting us that we’re giving good information.  

I had six carriers that I put on a job once. Two of the carriers were stuck on their rate. They didn't want to budget a bit, so they left. The others end up having overtime. They were promised eight to 10-hour days, but they were pulling in 14-hour days. This one particular carrier calls back and says please put me on this account because they heard about it from a friend. The trucking world is big, but it's also very small. These carriers are bragging about all of this money that they got on this account

I'm not pulling someone onto a job that is inconsistent and every day changes their mind. Those things happen and it's unfortunate, but you have to focus as a carrier. You need to survive, and you can’t get caught up in what you consider industry trends. It’s about, can I pay my bills? 

Another narrative we hear is that drivers are really resistant to technology. What is your experience? How do haulers feel about the technology they’re being asked to leverage? Are you ever met with resistance?

Seairra: I think it just has to be required, right? If you want to get paid, or if you want to be on a particular job, or if you just want to work for our company, these are the tools that you need to use. We have onboarding and if drivers don’t sign up to do everything electronically, then they're not officially onboarded. People tend to want to break the rules for carriers. 

We use RingCentral so it allows us to directly communicate with our carriers, wherever they are. They send me pictures of BOLC and PLDs, and I don't want these things! They go into our TMS. Drivers ask us to take care of it, but I can’t babysit them. Drivers will never use the systems until they realize they have to use them. 

We track everything and everybody. Perhaps carriers do their tracking, and that's fine. But our company wants to know where you are and what loads you’re working on at any point in time. These things matter to me because I think what a lot of carriers don't understand is that once we own this freight, even though you're the one that is hauling this freight, it's ours. Our company needs to have the assurance of knowing that if our supplier or the partners that we work with call and ask where a carrier is, we can tell them. As an owner, you have to stick to your guns and make it be required.

Are most of your carriers bought into technology? Is it second-nature for them now?

Seairra: Yes, it’s second-nature for drivers now. When I originally started the company, I did a lot of everything myself. In my particular group I have 213 carriers that I can't give away. As I've grown, I tend to put them more on dedicated stuff that I don't have to worry about, because I know they won't go anywhere. Carrier relationships matter. I can have a carrier that is 300 miles away and say, “Hey, I need you to go here because I know they need trucks here and just stay the week, get a hotel room.”  We’ll set up corporate rates for drivers, and they’ll go and be away from their family for a week, if that's what I need them to do. But they trust me. Of course they’re getting paid, but also they trust me. That’s what a carrier relationship is all about. 

This is what word of mouth gets you. If you don't have strong carrier relationships, you might not grow as quickly. If you have strong relationships with carriers then they tell other carriers and they want that same relationship. 

In this industry, it's fun and it's exciting and it's challenging. It's also a family. You might wonder how you can have over 6,000 carriers and say, it's a family, but it is. I don't feel that anybody thinks I'm unreachable. I've put tools in place -- I love technology. Carriers know they can send me a text message and if something is going on, that's not right. I can jump in at any point in time. I think that matters. I think it matters to carriers. Whether they’re trusting me with rates, or they feel I’m accessible, they know I’m looking out for them. 

What are the ways in which you think your relationships with carriers will stay the same or change in the future?

Seairra: I always look for ways to incorporate my long-term carriers when they’re ready to come off the road. I had someone that ran for me a long time and ended up having an injury. He couldn't be in the truck anymore, so he started getting a driver for his truck, and then I needed a site manager. I told him I could pay him a salary to be the site manager, because we had so many trucks coming in. 

I tend to always try to figure out what's the next step for my drivers? Carriers start out in a truck, but just like with anything else, their body starts to break down or they just get tired of being on the road. I’ve turned into a consultant. Because someone can’t drive their truck doesn't mean that somebody else can't drive your truck. I have people that apply all the time, so I tell them, let’s see if we can find you a driver for your truck. I’ll say hey - I got this guy and I think he would be really good for that. 

I’m all about bridging the gaps. Now people’s trucks are making money and they're doing something where they don't have to be in a truck, but again, this is all about relationships. 

I have more new commercial drivers signing up every day. They're young and they understand technology and they hate paper. It's a real advantage for them, and it's an advantage for us because now we're not having to teach some of that stuff. But as we go through that transition, as one driver is trying to get out driving I think that we need to, if they're not willing to quit, maybe they can start doing safety checks. I will always try to keep drivers working. Even if I only need them a couple of days a week. We’re a family and we have commitments.

As new technology becomes available for the trucking industry, it’s going to broaden the whole scope of what people will need in terms of education. How can you prepare drivers for that?

Seairra: When we have new accounts come in, we start them off with very generic information. They think, “ok, I got it.” But then it’s on to the next thing. You have to learn about all of these trucks, and technology and the information just compounds. We can’t just throw out all of this technology overnight and expect drivers to understand it. What we can do is take small steps. I do informational videos, I have a graphics person do a video to walk through technology step by step. 

It’s what you have to do. It’s part of a new driver’s welcome packet. I can explain it to new drivers, but the best way is for a video to explain the basics, and share what's expected of them. We’re always building upwards. 

A few lightning-round questions! 

Has there been someone in the industry that's been a mentor to you?

Seairra: Chuck Rosen was a great influence for me. He was a CPA and he ran a lot of freight. I eventually retired from up under him and started my own business. I didn't think the industry was for women. It was, and it still pretty much male dominated, but being in that position gave me the opportunity to realize that I could do something different and I could do it my way. He was my influence. 

What keeps you in the construction and logistics industry today?

Seairra: I love the challenge. I'm never bored, there are always moving parts. I can take care of the people that I've been entrusted with. I'm not gonna fail them. I'm going to always look for new, innovative ways and new accounts to make sure that they're always working. I'm in a way a steward over their livelihoods --  if I fail, then they fail. That keeps me in the industry. 

What's one piece of technology that you couldn't do your job without? 

Seairra: Outside of the PC, it’s  RingCentral. It gives me an opportunity to video call each one of my carriers that's in our database. I can send a message to everyone in my company instantly. I just love the platform. I can send messages to my team. I can set up different groups, truck groups, or a particular church group.

RingCentral’s new version that they came out with in the last couple years is amazing. I've grown with them. To use this technology to be able to not have to do any dispatch calls, and to send and drop links  to people to communicate directly with you, I don't know what I would do without RingCentral. I love it.

If there was one part of your job that you could automate, what would that be?

Seairra: Myself. Times ten.