An Overview of TMC's Percentage Pay...and the History Behind It

on Wednesday, August 27, 2014 in Company News

From TMC’s inception, we were a pay-by-percentage company only, but the percentage was locked in at 23% of the gross load pay. But, then in 1993, TMC drivers went to management and proposed a pay raise using a performance-based system. The idea the drivers presented was that if they were allowed to obtain a larger piece of the pie, the company in turn would be rewarded by the drivers becoming more efficient operators of the trucks. The rest as they say, is history. The performance-based pay package, known internally as the TMC Certification Program, has been a huge success for both drivers and management. Over the years, it has been refined a number of times to adjust for changes within the trucking industry. This is one of the key benefits to the program as drivers continuously have a voice to suggest improvements and refinements. In a nutshell, the more efficient a driver chooses to operate the truck, the greater the financial reward to the driver. Percentage pay simply means as a driver, you receive a percentage of what TMC is charging the customer to transport a particular load. Let’s look at an easy to understand example; Bob’s Building Supply contacts TMC to transport a load of cast iron ductile pipe. TMC in turn charges Bob’s Building Supply $1,000 to transport the load from point A to point B. The driver is dispatched on the load and is currently making 27% of everything he hauls this month. To calculate his pay, the driver would multiply $1,000 by .27, which equals $270. Therefore, the driver would make $270 for his one day’s work moving the load from A to B.

TMC began offering mileage pay to its drivers some years ago when we acquired Kelly Truck Lines out of Joplin, Missouri because we wanted to keep the system their drivers were accustomed to using. So, why choose percentage pay over mileage pay now that we offer both options? Well, let us start by saying mileage pay is not always a bad thing. We don’t want to completely knock this concept because in limited applications, it may be the better package to choose. This is why TMC always offers our drivers both pay systems, and we also allow the driver to change between these two systems, twice per year. It really is your choice. However, the overwhelming majority of our drivers do choose percentage pay because of its performance-driven aspect. It’s almost like being an owner-operator, except you reap the rewards of your efforts without the overhead cost of maintaining your own truck. The smarter you operate in areas such as fuel mileage, out of route miles, revenue you generate, on-time appointments, etc, the greater your financial reward. The saying among drivers at TMC is to work smarter, not harder. Did you know that based upon TMC’s current freight rates, you can make approximately $52,000 per year at just 27% of the load gross? Another great aspect to percentage pay is that when TMC gets a raise, you get a raise. Since you are paid a percentage of the gross load pay, when the rate increases so does your cut since you are making a percentage, and not being paid only by the mile. Stop telling yourself more miles more money, and instead start thinking less miles more money!