Some honest questions about FSC
- Thread starter CharlesD
- Start date
But Dave..If the load pay is within my set parameters to be profitable...does it matter what the carrier is charging the customer?
Absolutely not. Just a matter of whether they are honest about it. If you say you pay 100 percent of something, then that should be what is paid, not something else.
Now I've been both Flat rate and actual fsc..I can see just how much I was being ripped off for....NEVER flat again...
That is my point. To me, I find no plausible argument that can defend the concept of "It is ok to lie and rip someone off IF the rate is ok". Has nothing to do with whether "it is enough".
Would be no different than charging one for the price of a Mercedes and then give them a VW. "It is ok because they both get you to the same place".
Very true. That is why I like the concept of providing documentation of what was billed to the customer.
That takes care of that whole question of doubt.
Case in point, at one time we left a carrier that was engaged in this practice. At first, a total denial. When proof was presented, they fessed up that they were doing it on a large scale.
This was a percentage based company at the time.
That takes care of that whole question of doubt.
Case in point, at one time we left a carrier that was engaged in this practice. At first, a total denial. When proof was presented, they fessed up that they were doing it on a large scale.
This was a percentage based company at the time.
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Very true again. Look at what the difference OVM sees when he jumped carriers. That truck times how many others? The carrier is free to keep what they want, but don't say you pay one thing when in fact you don't and pay another.
I personally agree fsc should be a pass thru. Some carriers do keep a percentage. In some ways this is not totally unfair. The person buying the fuel is not waiting 30-60 days to get paid for the fsc. The carrier is fronting the money and carrying the cost of the money on their books. For larger carriers this can result in a lot of money. Now we do not do this, but I would not totally bash a company that kept say 5% of the fsc to cover this expense.
In expedite and open board trucking I like the 100% clean pass through.
On dedicated lanes this can sometimes not be fair. Units are normally all paid an equal contract rate. Customers are getting billed different amounts per mile, and many times this rate is adjusted based on a healthy or deficient fsc schedule. If two trucks are running round trip dedicated runs out of Detroit to say Texas and both are getting the same rate per mile, would it be fair if they got different fsc amounts based on the customer? We try and equal it all out even if we know we are charging a higher base rate to compensate for a deficient fsc.
In expedite and open board trucking I like the 100% clean pass through.
On dedicated lanes this can sometimes not be fair. Units are normally all paid an equal contract rate. Customers are getting billed different amounts per mile, and many times this rate is adjusted based on a healthy or deficient fsc schedule. If two trucks are running round trip dedicated runs out of Detroit to say Texas and both are getting the same rate per mile, would it be fair if they got different fsc amounts based on the customer? We try and equal it all out even if we know we are charging a higher base rate to compensate for a deficient fsc.
Jefferson3000
Expert Expediter
It is also driven by supply and demand. You may see a van's fsc foundering where straights and tractors have no problem.
I agree with Leo and others. The total rate is what matters. However, I understand that a driver for an owner who is on a percentage, might respond differently, according to how the load is split If the carrier offers different rates and fuel charges on different loads, then a driver NOT paying for fuel is going to focus his attention on the level of the base rate in the total. Also, an owner paying a co-driver in his truck may respond differently to different offers.
moose
Veteran Expediter
Well , John , you nailed it right in .
let me spell it : WE DON'T CARE , THIS IS NONE OF OUR BUSINESS .
as an O/O ,why would i care what the carrier can or cannot charge a customer . the carrier marketing skills are the carrier business.
if the carrier makes a profit center out of the FSC ,i say more power to them .i'v yet to see any rezone why a carrier needs to pass on 100% of the FSC.
if this is a flat rate contract - i would like to see a FSC matrix bringing down the cost of fuel to a predetermined level .
as this is the ONLY unexpected expense to haul the load.
if this is a % base contract ,or a 'per load pay' - just say it as it is ,just let me know what the carrier pay the truck to move that freight . - no FSC needed .
No, but the person buying the fuel often waits 2-3 weeks for that FSC money to be paid at settlement time. The fact that the carrier is fronting the money is not a factor, as far as I'm concerned. One of the things we as contractors pay a hefty price to the carrier for is for them to pay us in a timely manner and deal with Accounts Receivables. It's a cost of doing business for the carrier that we in part already pay for. If the carriers pay the contractors, say, 62% of the line haul, then the contractor is paying 38% to the carrier for something other than being a broker, like factoring so we don't have to wait 30-60 days for our money. Charging an additional 5% for part of our money simply because it's called something other than "line haul" is, I think, wholly unfair, since it's all the same money collected in the same manner.
Carriers could certainly hold back all payables until the customers have paid, be it 30 or 60 days, or whatever it is, but then they wouldn't have very many trucks in their fleet.
That would be my position as well. It really comes down to whether a carrier is transparent in these types of dealings or they aren't. Most carriers have that expectation of their drivers or fleet owners, I don't feel too out of place having the same expectations with the carrier.
If you're on a percentage-based contract, you'd better make it your business, because it absolutely is.
Because it's 100% not their money, and it was money collected expressly for the purpose of offsetting the cost of fuel for whomever is paying for the fuel.
The FSC was invented because of fluctuating fuel costs in order to help cover the additional costs of delivering freight under pre-contracted rates. Rather than have to redo contracts every week as the fuel prices changed, the contracted rates stayed the same and the FSC became the fluctuating variable cost to the shippers, but it fluctuates in a predetermined manner based on the price of fuel so the customers have a chance to predict their costs.
For company-owned trucks this is straightforward, where the entire FSC goes in the bank to offset the cost of fuel. But it translates directly to independent contractors, as well, where the entire FSC goes to the contractor to offset the cost of fuel. For a non-asset based carrier to keep even a small portion of the FSC is unconscionable. It's ridiculous on the face of it. It's not their money, nor are they entitled to a single penny of it. If they want to keep some of the FSC, then let them pay a proportional amount of the fuel that they keep in FSC. If they want to keep 5% of my FSC, fine, let them pay 5% of my fuel.
Carriers can continue to haul freight at the lower rates and add a FSC, or they can simply raise rates to be more in line with a "line haul + FSC" and do away with the additional FSC. In some cases that's what bidders already do on the bid boards, since those loads are bid on as a total, anyway.
greg334
Veteran Expediter
Well Cheri there is a problem with other things;
using my pallet jack, they didn't pay for that but a few carriers will take a percentage of the money charged to the customer.
using my reefer, they didn't pay for that but a few carriers take a percentage of the money charged to the customer.
using my labor, they didn't pay for that but a few carriers take a percentage of the money charged to the customer.
Should I go on?
The problem is more carriers will not pass a lot of fees onto the driver as they should be, especially labor fees. Just like the rip off of flat rate FSC or in some cases the BS line "well they are a good customer, so we won't charge them a FSC", it comes down to a lot of people would be better just to be truly independent.
I wonder about something though, how many of the cheerleaders would not be happy if they really had to deal with no relocation supplements or FSC for all authorized miles?
using my pallet jack, they didn't pay for that but a few carriers will take a percentage of the money charged to the customer.
using my reefer, they didn't pay for that but a few carriers take a percentage of the money charged to the customer.
using my labor, they didn't pay for that but a few carriers take a percentage of the money charged to the customer.
Should I go on?
The problem is more carriers will not pass a lot of fees onto the driver as they should be, especially labor fees. Just like the rip off of flat rate FSC or in some cases the BS line "well they are a good customer, so we won't charge them a FSC", it comes down to a lot of people would be better just to be truly independent.
I wonder about something though, how many of the cheerleaders would not be happy if they really had to deal with no relocation supplements or FSC for all authorized miles?
As I have typed before, FSC i'm convinced was devised by a bean counter somewhere, that, saw it as a way to get creative, even again, with the numbers that we all work with to advance their position. Regardless, we all keep attuned to fuel prices one way or another on a daily basis and we {should} know what it costs to do business. Sooo......to make the masses happy that have FSC tatooed on the brain.....maybe Carriers should start offering...say, for a vanner, fourty five cent for line haul an fity cent for FSC. That way we could start anuther redundant thread. OR, the whole expediter world would be happy. I dunno?