The other side of charging by weight
By Bill Jackson
I expect this article is going to upset a whole load of readers and operators, but the subject matter is of the greatest importance to the future of our industry. Over the last two years, there has been a lot written about charging for recovery jobs by the weight of the load and it is upsetting the normal good relations between ourselves and the insurance adjusters. It just won’t stand up to close inspection. Adjusters are usually keen to settle your invoices because it makes their job easier if there is only a little wrangle over the price (for appearance’s sake!) When it comes down to being presented with a bill that bears no relation to the work involved then this is a serious matter.
The idea was first thought up by an operator in Maryland in the early 1980’s and it though it looked so good I actually put it onto one of my early videos and recommended the idea to many folks. That operator later retired and the idea died with him. But it has been revived by some very able and widely read writers and teachers in recent years. When it comes down to a court case where this rules is used, it just won’t cut the mustard and it’s upsetting many big fleet owners who cannot see the sense in this rule. I felt obliged to write this article now because I heard that one state is proposing to recommend this plan be used state-wide by all its operators and I hope they will read on and think again. I have, of course, remembered that it is our aim to make a legitimate profit, but it’s also our duty to be reasonable in our charges
Let’s look at some recovery jobs and analyze the costs using the weight plan and the other way of charging by the actual hours worked.
An 18-wheeler rolls over with no damage to the trailer, so the recovery job is easy, especially when the operator finds out that it’s loaded with potato chips. Gross weight is 18, 000 pounds charged at, say, eight cents per pound. Customer bill will be $1,440 Time with one truck is two hours or revenue of $720 per truck.
Same job, but this time the trailer has a broken roof, rear doors are open the rear trailer wheels are knocked out. The load is bags of beans and the weight is 69,000 pounds. It takes two big hydraulic boom trucks and a set of air cushions to upright it and the job takes six hours. Cost would be $5,520, after allowing for the cushions at $1,500 its $4,020. That works out to $355 per hour.
Sounds good so far? But wait!
Now reverse the situation and have the trailer loaded with chips badly damaged it takes eight hours to set it up. The customer’s invoice would still be $1,440 but the revenue would be $180 per truck. Or, let’s make the bean trailer undamaged so it can be up righted by two trucks in two hours. Customer invoice will be $4020, but truck revenue will be $1,005 per truck. So that proves it’s a bad idea for the recovery man. Now what about the customers view?
Just try justifying how it can cost the same to recover a load of chips compared to heavy weight beans) without taking into account all the damage done to the trailer. Why not stick to the tried and proven method of charging by the vehicle used, multiplied by the hours taken plus the extras. What about a trailer that had a weight bill of 38,000 pounds when it turned over, but half the load fell down the bank, do you charge for the load you DIDN’T recover?
What about the load you have to unload by hand throughout the night. It is the same price as the ordinary recovery? The weight is the same? What about the flatbed with one roll of steel weighing 60,000 pounds. One rotator will do this in one hour, but will this be the same as the trailer full of beans? No way will it hold water.
All the weight formula proves is that the sooner you throw a big hook on it and jerk it upright, the more money you make - not what we all want, surely? Now, here is the other side of the argument where it must be real tough to make a decent profit either way you look at it.
The regulated authorized charges for one state are:
-Heavy tow truck over 44,000 pounds GVR: $140 per hour
- Medium Tow truck over 24,000 pounds GVR: $93 per hour
Don’t go West, you may be sorry.
(Article was written by Bill Jackson, and published in Phootnotes, May 2001, Page 10. Reprinted with permission from Towing and Recovery Footnotes)
