early impression on conway FSC?

joebob1_30132 · Apr 5, 2006

I hear you Dave.. Dont know ..All i know is that the internet has given the ability to the drivers to comunnicate wsith each othr like never before ..what power we have ...example ..when the con way rep came on to address the fcs a couple weeks back.. I like that.. my real question in the begining was to find out if anyone has crunched any numbers to get the story on how they are making out under the new fcs as opposed to the one ..

Moot · Apr 7, 2006

The following is taken from the CNF Inc. 2005 annual report. Ya I'm a shareholder. This way I can make tons of money working for the corporation and tons of money as an investor. When I sell off my portfollio I plan on wintering south of the border. (Clear Lake, Iowa in a Maytag box.)

Page 10 Price and Availability of Fuel

"The fuel surcharge is a part of Con-Way's (Con-Way being all Con-Way business units, not just Con-Way Now) overall rate structure for customers and is intended to compensate Con-Way for the adverse effects of higher fuel costs. As fuel prices have risen, the fuel surcharge has increased Con-Way's yields and revenue, and Con-Way has more than recovered higher fuel costs and fuel-related increases in purchased transportation."

A little further into the paragraph....

"Con-Way's operting income would likely be adversely affected by a rapid and significant decline in fuel prices as lower fuel surcharges would reduce Con-Way's yield and revenue"

Yes you read that last line correctly. Go ahead read it again. I typed this. Couldn't cut and paste from Acrobat. That is direct from the hard copy annual report. Go online. Google CNF annual report 2005. Page 10 under PRICE AND AVAILABILITY OF FUEL.

With all of the fuel CNF buys for it's LTL's I'm sure they get a sweet deal.

Please go on line and read this!

I can harldly wait for my next dividend check.

davekc · Apr 7, 2006

Sounds great for stockholders. My Conway and Fedex stock will do great this year. From reading that, you are getting only a portion of the fuel surcharge rather than the original 100 percent. At least they are honest and telling you up front assuming that article is accurate. Then it is your decision what to do with it.
Maybe a recruiter or someone could elaborate as sometimes these things get confused between the expedite division and the truck load.
Either way they say they are making more profit from the fuel surcharges based on you post.

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Moot · Apr 7, 2006

RE%3A early impression on conway FSC%3F

davekc, this is not from an article. It came directly from CNF's 2005 annual report. It is not specific to Con-Way Now which is an expediting unit that is also combined with Con-Way Truckload which as it's name implies is a truck load carrier. It covers all of Con-Way's transportation companies. The largest of these are Con-Way's three LTL regional carrriers. If you are a shareholder then you should have received the 2005 annual report. If not, then google cnf 2005 annual report. The quotes I provided are from this annual report. Page 10 under PRICE AND ABAILABILTY OF FUEL. Please look it up. Read it! THIS IS FACT.

davekc · Apr 7, 2006

RE: RE%3A early impression on conway FSC%3F

Ok you are correct. I responded ahead of reading the article. I had one here but had not had a chance to go through it.
Thanks

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LDB · Apr 7, 2006

I read that as saying Con-Way, the umbrella company, is making additional revenue from fuel surcharges in company owned and company operated trucks driven by company drivers. I'm sure O/O's are getting 100% of fsc on their portion of operations.

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davekc · Apr 7, 2006

I read that as saying Con-Way, the umbrella company, is making additional revenue from fuel surcharges in company owned and company operated trucks driven by company drivers. I'm sure O/O's are getting 100% of fsc on their portion of operations.
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It doesn't address O/O's but the entire company. I got a report in the mail. If they are on a flat rate, some win and some lose based on the run. Or, a certain class of vehicles is being subsidized by another. You can't have it both ways.
But, profits are up which is a good thing for me.

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LDB · Apr 7, 2006

Some jobs definitely win and some definitely lose. Hauling a job for company A who usually paid only 6cpm and getting the current weeks 16cpm fsc would be great. Hauling a job for company B who usually paid 24cpm and only getting 16cpm would definitely not be great. No matter what system is used it won't seem fair at all times to all people.

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davekc · Apr 8, 2006

It seems like it would be a better system to pay 100 percent per run, rather than moving numbers all over and quessing that it is 100 percent.
As Ron Reagan said, "trust but verify"
I would demand some frieght bills for verification.
If there is nothing to hide it shouldn't be a problem.

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LDB · Apr 8, 2006

I'm not sure how you could verify it. Say you made 4 runs during week X when fsc was 16cpm. The runs were: A 532mi, B 387mi, C 512mi and D 483mi. You got the bills and fsc for the companies were A .06cpm, B .15cpm, C .27cpm and D .19cpm. You ran 1914 paid miles and received $306.24 in fsc. The company took in $319.98. I made those numbers up as I typed and did the math afterward so being that close is purely accidental.

The other $13.74 theoretically went toward the 16cpm another driver was paid who maybe ran two jobs for company A and none for company C. If you are driver number 1 that week and make $13.74 less you aren't going to be totally happy. If you are driver number 2 and make $93.78 extra (same miles as above but at .06, .15, .06 and .19cpm) you are really going to like the program.

Some weeks you are going to be driver number one but some weeks you are going to be driver number 2 so in the long run it's probably going to balance out fairly evenly. That aside, without seeing the accounting records for the entire year to confirm equal debits and credits for fsc received and paid I can't think of a way to confirm they are truly paying 100% to the trucks. There may be and I just don't know what it is but it's beyond me.

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davekc · Apr 8, 2006

Some weeks you are going to be driver number one but some weeks you are going to be driver number 2 so in the long run it's probably going to balance out fairly evenly. That aside, without seeing the accounting records for the entire year to confirm equal debits and credits for fsc received and paid I can't think of a way to confirm they are truly paying 100% to the trucks. There may be and I just don't know what it is but it's beyond me.
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That is the problem. You can't confirm anything. So then you have to look and see if more are benefiting from that program. It doesn't appear so if your theory is applied or based on recent posts. If straights do better, and vans are not, are vans subsidizing the straights?
The trouble is, you don't know. I would think if you partner with someone, you should have this information.
When something simple is made complicated, there usually is a reason.
Again, maybe they pay a bigger surcharge to their fleet owners....again, how would you know?
As you can tell, I am not big on items that can't be verified. Especially if an investment is involved.
But, it is good for stockholders.

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LDB · Apr 8, 2006

I don't disagree with you that it's better to have confirmation. I'm just going by what I've heard from a few of their operators as well as talking to them at MATS a couple of minutes. There may be a small amount of money moving from one vehicle class to another. I think it's almost guaranteed some D unit money is moving because they used an unrealistic number of 10mpg for D units. To be more realistic and accurate, as well as fairer to D unit operators, they should have used 8.5 or at most 9mpg as their standard.

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Moot · Apr 8, 2006

ONLY THE MATRIX KNOWS FOR SURE.............. BOOOOOOOHAAAAAAAAAAAHAAAAAAHAAAAAAAAAAAAAHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

An informed contractor is a dangerous contractor.

Tennesseahawk · Apr 8, 2006

In a way, it sounds like a communist system. In other words, there's a pot, and everyone takes out an equal share. I see this working, as there's no reason to turn down a run due to FSC. On the other hand, you'll never know what Conway is getting. Personally, I'd rather take the 1500 mi Texas run, and getting the same ol' FSC, than turn it down because it's too low. Seems they gave their drivers a reason to keep running, rather than an excuse to stay parked.

One constant FSC is always in the best interest of the contractors. Currently, ours is at 18% of our rate (.225/mi), but it fluxuates pretty regularly. Having one set of bids definitely helps out too (rather than one for freight and one for FSC). Companies that have an irregular FSC could always charge high freight costs, yet bargain with a low FSC. Who's getting the profit there? Bidding flat rate guarantees a constant surcharge.

Moot · Apr 8, 2006

T Hawk, you might be on to something with that commie crap. Communism and con-way both begin with the letters co.

The new f.s.c. helps Con-way service the customer in that a low paying f.s.c. load would not be turned down for that reason. What will happen when contracts are renewed with customers and the f.s.c. to that customer increases? What if Con-Way looses several low paying f.s.c. customers? Will the MATRIX instantly adjust? Only the MATRIX and the person behind the curtain know.

Joebob's mention of the power of the internet is right on.

"The reveolution will not be televised". (G.S.H.) But it will be on the internet. (Moot)

davekc · Apr 8, 2006

Companies that have an irregular FSC could always charge high freight costs, yet bargain with a low FSC. Who's getting the profit there? Bidding flat rate guarantees a constant surcharge
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Excellent point. But if the surcharge is too low, then it may not be hauled. If you are running on a flat milage rate, then you have agreed to run at that rate regardless of what the carrier gets for the load.

"An informed contractor is a dangerous contractor"

In some eyes that may be more closer to the truth than you think.

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Tennesseahawk · Apr 8, 2006

Dave... I'm talking about the companies bidding on loads with a flat rate, rather than charging a per mile rate and an FSC. For example, Panther would charge a customer say $2.25/mi and .25 FSC. They could make the contract out to be $2.40/mi and .10 FSC instead. At least the way Conway seems to be doing it, it has the appearance of being fair... we'll see.

But a lot of the smaller companies, like C&M, charge a flat rate, say $1500 for an 800 mi run. Regardless of what C&M charges, tho, we get the same rate for FSC, unless it's a discount run to get us out of dodge. Sometimes the company comes out like a bandit, sometimes only a couple cents a mile. I like this system best, as we know exactly what we're getting nearly every run. And our FSC is more than adequate to offset the fuel prices.

davekc · Apr 8, 2006

Thanks for the clarification. I thought you meant something else.

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grog111 · Apr 9, 2006

an interesting aside....what happens to the fsc when you're hauling multiple loads? mine remains the same as its based on my cpm which remains constant, with additional monies coming only from pick up and drop off charges.

LDB · Apr 9, 2006

Most expediting companies contract their trucks as exclusive use so the entire run is for "Acme" company. A very few companies allow multiple company use of the truck so you could have freight for "Acme" and "Widgetsarama" both. In the first case it should be the standard fsc for all paid miles plus extra stop pay for each stop beyond 2 (original pickup and final delivery). In the second case you should receive 2 complete sets of pay, both per mile and fsc. In a flat rate situation case 2 should pay $1.20 plus $1.20 plus fsc1 plus fsc2 for a total of around $2.75 a mile for the miles both loads are in the box. On a percentage basis it would be xx% of what "Acme" pays in tariff and fsc plus xx% of what "Widgetsarama" pays in tariff and fsc.

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