Hey there, fellow 🚚 carriers!
Amazon Relay shaking things up with a change in how we get paid 🤑 for modified trips. Get ready to know how their updated payment structure works, as it is coming your way in May, 2023!
So, here's the deal: If Amazon needs to make changes to our planned routes (or even cancel them) because, well, they're in charge 🙃, we won't be left empty-handed. Sounds alright, doesn't it?
Well, let's dig a little deeper.
We'll be paid the hourly compensation. It almost feels like we're being treated as mere employees rather than independent contractors. This change raises questions about our autonomy and fair compensation for the time and energy we put into each modified trip.
Shouldn't we have more control over our earnings as independent contractors?
Let's consider 🧐 an example provided by Amazon Relay.
Suppose a carrier is initially assigned a 200-mile trip with an estimated duration of four hours, which has a base rate payment of $500 (equivalent to $125 per hour). However, if Amazon modifies the trip, resulting in the carrier executing only 125 miles over three hours, the carrier will receive a modified base rate payment of $375 (three hours multiplied by $125 per hour).
Sounds great doesn’t it?
In this demonstrative example you even get an increase 📊 in rate per mile from $2.5 ($500/200miles) ➡️ $3 ($375/125miles).
Hold on 😅 (the only free cheese 🧀 is in the mousetrap).
The example provided by Amazon does seem a bit unrealistic, in terms of the time ⏳ frame and distance 🛣 involved. It suggests that a carrier would complete 125 miles in 3 hours but then have only 1 hour remaining to cover the remaining 75 miles that were cancelled. This scenario could give the impression that the hours are manipulated to artificially increase the rate per hour. It's important to note that the example is likely intended to demonstrate the change in payment structure rather than represent an actual, practical situation. However, it's essential to approach such examples with a critical eye and consider the broader implications and potential challenges that carriers might face when trips are modified.
Looking at the Amazon Relay load board we can clearly observe that for most of the 200 mile loads, Amazon Relay is giving 6 hours of time to complete (and that's one way 😅) the tour, which makes the per/hour starting rate fall ⬇️ to $83.
Let’s keep exploring 👀 other hypothetical examples that are outside of the Amazon's own example where a carrier could potentially suffer financial consequences under the new price change policy.
For example, a carrier is scheduled for a multi-stop round trip, with the following details:
➡️ Trip from Location A to Location B: 200 miles
➡️ Trip from Location B to Location A: 200 miles
Time = 12 hours ; Distance = 400 miles ; Base Rate = 800 ➡️ Price per hour = $66/hr
❗️it is important to note that original price per hour is used to calculate the adjusted price❗️
During the delivery leg from Location A to Location B, Amazon cancels the return trip from Location B to Location A.
Under the new price change policy, the carrier would potentially receive payment for the completed delivery leg based on the agreed-upon per hour rate rate, which amounts to $396 (Initial price per hour x estimated duration). Just a reminder, previously a carrier was for most cases approved with a bobtail leg in this situation, which paid carrier in full amount 🤯.
Fair and transparent method of compensation? I do not think so.
If we are going to go with a more pessimistic view (is it even possible?), what if Amazon actually counts how long it took you to actually deliver the load from point A to point B based on the time stamps? If you deliver the 200 mile load in 4 hours instead of 6, your pay would be $264.
❗️If this actually happens the message “load stationary for longer than expected” emails are going to be all over everyone’s 📧 boxes❗️
Adding to all of that, let’s not forget that as a carrier you plan your resources and schedule based on the entire tour rather than part of it. This side of the pricing policy change alone has a lot of negative consequences for the carrier working on Amazon Relay.
Creating scenarios where carriers are put in disadvantageous positions is indeed simple within the context of Amazon's changes. It is possible to construct examples that highlight potential issues, such as situations where loads are initially added to a carrier's schedule to give the impression of ample work, but are later canceled, leaving the carrier with a low volume of work for a relatively low payment. This can create frustration and financial strain for carriers who had anticipated a higher workload and corresponding compensation.
Having explored some negative examples where carriers may face financial disadvantages due to the Amazon price change policy, let's now shift our focus to potential scenarios that could bring financial gains. It is important to approach these scenarios from an ethical standpoint, understanding that honest and transparent business practices should always be prioritized. While there might be instances where carriers can benefit within the bounds of the policy, it is crucial to remember the importance of maintaining integrity and upholding the principles of fair play.
With that in mind, let's delve into hypothetical scenarios that highlight possible ways for carriers to optimize their earnings while complying with the policy guidelines.
In the example above ⬆️ few legs of the trip were adjusted due to a load cancellation, however the new empty leg IGQ1 - XIN1 was created with the duration of the 22h. Please note, this example is taken when the new policy is yet to be implemented.
Looking at the image above ⬆️ the original rate was $1008.42 with assumption that this load would have been with a duration of around 29 hours ($725.25 / $24.99/hr = 29.02 hours). Looking at the Base Rate field we can see an attached original rate per hour, which equals to $24.99. I am assuming that they will use this number to calculate the original price per hour rather than the estimated payout, which you actually get. While writing this blog post I’ve noticed that this is another way of tricking the carriers 😅. Nevertheless, if we look at the total duration after the adjustment, we are looking at 30.92 hours, which means that we should be paid $772.69 with a new policy.
Will this actually work that way? I am not sure...
However, another thought that comes to my mind is that if this actually works as promised by Amazon the carrier will be at the financial gain if the routes cancelled are the middle routes, because Amazon will be forced to create a leg to a next destination that will equal to the hours left until the next pick up, just like in this case we got a leg from IGQ1 ➡️ XIN1 that equals to 22 hours, because the next pick-up simply does not start before that time and is not adjusted. In this case, a driver under this scenario has time to execute shorter loads at the current location, while getting paid hourly as promised with the new rule.
I could talk about the scenarios where a carrier could potentially be purposefully prolonging the execution of trips, but I hope these examples were more creative, thoughtful and most importantly were in line with Amazon policies.
❗️It is crucially important to understand that this policy will most likely not affect TONU payments for the cancellations and Amazon Relay contract payments ❗
As one of our members said, Amazon Relay is like black jack 🃏we are all playing against the dealer and not against each other.