Some honest questions about FSC

[Turtle]

Well Cheri there is a problem with other things;

using my pallet jack...
using my reefer...
using my labor...
Should I go on?

You could go on and one right down to the tires and axle grease that they didn't pay for but are charging the customer for, and it wouldn't make any difference. When we lease on to a carrier we are providing things like pallet jacks, reefers, trucks, tires, fuel injectors (you get my point) in order to provide a service, and we in effect pay the carrier to find us loads, deal with collections, insurance and authority. A pallet jack is primarily to make your job easier. A reefer is primarily to help you get more and higher paying loads. If you had your own authority you'd be charing extra for pallet jack service and reefer service. Same with labor. The carrier is able to charge the customer an extra fee for your labor, and in exchange for them brokering the transaction, you give them part of your labor fee.

I have actually negotiated labor fees myself, on the spot, and got paid, on the spot. Not very often, since it's usually easiest to just let the carrier and the customer work that out, especially when it comes to collections. That's what I pay them for. But there have been a few unusual circumstances where the carrier wasn't the best one to negotiate something like that. There was also one case where the shipper wanted me to do something above and beyond, and after I did it they mailed me a check. The carrier wasn't involved, nor did they need to be.

But generally speaking, labor rates are negotiated with the paying customer by the carrier (or the broker) and as such they should be paid for that. Granted, they take more than they should, but they do that with the Qualcomm, too.

Fuel and the FSC is altogether different, especially for carriers that have contracted rates with certain shippers. I, nor very many others, would run loads for those reduced contracted rates in light of the increased costs without additional bonus money of some kind, be it FSC or whatever. If they can collect 30 cents and give me 20 cents, that's fine, or they can just collect the 20 cents that I need and pass it along.

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.

Yup. Just recently I was offered a load at my regular rate, but with an 8 cent FSC. I asked why the low FSC, and they said they gave the customer a discount. I corrected them in that they had ME give the customer a discount, and did so without consulting me. I told them that if they wanted to give the customer a discount, that they could take it out of their end, not mine. I refused the load. I was later offered the load with a bonus that made up for the missing FSC.

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?

Hard to say. They already think a flat FSC is OK because they get it on deadhead miles.

 

[CharlesD]

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.

That's how I've been operating ever since I started taking on other drivers. I pay attention as best I can to what companies are paying as a line haul+ FSC and I keep our driver pay competitive with those amounts. Since I was on the road for the last couple years and trying to manage other units as well, it was a lot simpler to operate this way as far as book keeping goes, and since our freight is bid all inclusive and we're not charging customers a separate FSC, I don't feel like the drivers are being cheated out of anything because their pay is on par with what other companies are paying when you add everything together.

Also, instead of paying the drivers a set amount, we shoot for a certain profit margin and pay the rest to the driver, which means that when I manage to get a better rate for the load, the driver gets a better rate. I feel like that's a fair way to do it, even though I'm not putting different labels on different parts of the money paid to the truck. The bottom line is there's essentially no difference between one of our units getting say, .90 or .95 all included and someone getting .75 or .80 with a FSC added. It's the same money. It would be one thing if we were charging a customer a surcharge and then not passing it on, or telling drivers we're charging y when we're really charging x, but we're not doing that. Our customer base is mostly brokers and they're not separating the pay out when they pay us, so what is there in that situation that should be passed on? Our drivers know what we're getting on the loads and what they're getting paid, so it's not like anything is being hidden either. I just find it rather funny that some people get pretty worked about what their money is called when the amount is the most important thing.

 

[DannyD]

I absolutely agree w/ this. I run mostly local. I've had some 45 mile runs that paid $90 & a few others that paid $75. Not all of them are like this mind ya, but I don't care how it's broken down. If they wanna say $2/mile & no surcharge that's fine w/ me. If they wanna say $.50/mile & $1.50 surcharge that's fine too.

As long as the amount paid is the same as the amount offered who cares what it's called? One carrier has at times been bad about offering a load with .xx fsc and later paying the load with .yy fsc and .yy is less than .xx offered. When called down about it they have some excuse about the customer blah blah but bottom line is they cheated the truck on that run.

I know guys that if offered a load at $1.50 plus .10 fsc would turn it down saying they won't run for such low fsc but if it was offered at $1.30 plus .30 fsc would take the same load. I'll run your freight for free provided it's paying $1.60 fsc guaranteed. I'll run your load with no fsc provided it's paying $1.60. What do I care what you call it? It's the total pay per mile that matters not what you call it.

 

[Turtle]

The bottom line is there's essentially no difference between one of our units getting say, .90 or .95 all included and someone getting .75 or .80 with a FSC added. It's the same money.
...
I just find it rather funny that some people get pretty worked about what their money is called when the amount is the most important thing.

Exactly. And that's really how most loads are bid out, anyway.
I wouldn't imagine that you run across many bid loads that would have a FSC then added to the bid. I'm not looking at bid boards very often, but I've never seen it.

The FSC really only comes into play with carriers who have contracted pre-determined rates with certain customers, whether the contract is for the line haul or or the FSC that gets added, or both in many cases. It's all about the shippers being able to predict and control their costs, too. Some carriers and/or shippers want to separate it out for accounting reasons, but it shouldn't really matter as long as all the money gets to where it's supposed to go.

Like there is one major shipper with a bid board, and when someone bids an all inclusive dollar figure, that figure is automatically divided up into line haul and FSC based on the contracted rates the shipper has with that particular bidder, but to everyone looking at bids, it's just an all inclusive figure. The carrier might bid $1.40, and that's what goes on the board, but that carrier has a contract that automatically separates that $1.40 into $1.20 for the line haul and then 20 cents for the FSC. But everyone is still bidding on that $1.40 range, regardless of how it gets broken down by the software on either end.

Then there's also the carriers, like mine, who pay us on a per-mile rate, rather than a percentage, so the FSC must be added on top of the contracted rate, instead of changing the contracted rate itself for each load.

But I've been offered plenty of reduced rate loads at 70 cents instead of my contracted 77 cents, but with, say, a 28 cent FSC, which is the same as my 77 cents and a 21 cent FSC. Sure, I'll take that. That 70 doesn't bother me at all. It's the total that counts. I even had one the other day at 67 cents, but the FSC made it doable at 85 cents for 1461 miles.

 

[Crazynuff]

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?

The cost of a reefer is a constant that figures in with calculating operating costs . The same could be said of a pallet jack , figuring its cost and how often it will have to be replaced .
Fuel is a major expense and the cost fluctuates often .
I agree with posters that say if the rate is high enough there is no need to worry about the FSC . When rates are minimal and a FSC is implemented any broker or carrier keeping any part of the FSC is cheating both the shipper and the contractor .
Even with a high rate even though the FSC isn't "needed " not giving the contractor 100% is nothing more than theft . The higher the rate the more they are stealing .

 

[Crazynuff]

But Dave..If the load pay is within my set parameters to be profitable...does it matter what the carrier is charging the customer?

You'd better believe it would matter to the customer if they were aware of it . It's the contractors that establish the service with the customers . Customers pay a rate expecting the contractors to get the amount they are due . I knew of a carrier that changed their FSC structure a few years ago and told contractors take it or leave it . Many left it . Some took the info on what the new rates would pay contractors and showed it to shippers and explained why they were leaving the carrier . Shippers were not getting a corresponding reduction in rates . In some cases they moved business to another carrier .

 

[TeamCaffee]

My FSC fluctuates quicker than the our companies FSC.

We pay the fuel and we are not on a flat rate. When fuel goes up so does my rate per mile that I must have to run a load.

We have a floating rate that we need per mile as we take into consideration where the load is going, will there be toll roads, what are the chances of getting out of that area, how far will we have to dead head to get back into a good area.

We also look at what does the load weigh and we have a hassle factor we figure in to the rate. If we are going to a place where we cannot stay with the truck, we have to take our time crossing the country or a myriad of other reasons can affect our rate we want.

We we are offered a load we consider all of the above and look at the rate per mile and decide to either accept the load or decline the load. We do not separate the FSC out of the rate as I do not separate the cost of fuel out of what we need to run per mile it is a total and our total can fluctuate daily or hourly!

 

[Crazynuff]

My FSC fluctuates quicker than the our companies FSC.

We pay the fuel and we are not on a flat rate. When fuel goes up so does my rate per mile that I must have to run a load.

We have a floating rate that we need per mile as we take into consideration where the load is going, will there be toll roads, what are the chances of getting out of that area, how far will we have to dead head to get back into a good area.

We also look at what does the load weigh and we have a hassle factor we figure in to the rate. If we are going to a place where we cannot stay with the truck, we have to take our time crossing the country or a myriad of other reasons can affect our rate we want.

We we are offered a load we consider all of the above and look at the rate per mile and decide to either accept the load or decline the load. We do not separate the FSC out of the rate as I do not separate the cost of fuel out of what we need to run per mile it is a total and our total can fluctuate daily or hourly!

Savvy way to operate but there's that "need" word again . That's a big problem in this industry . You should get what you are entitled to , not just what you need .
Say the rate pays you $2.50 a mile . That's great . No need for a FSC .
But is it right the shipper may have charged a $.30 a mile FSC and only gave you $.15 ?

 

[TeamCaffee]

Savvy way to operate but there's that "need" word again . That's a big problem in this industry . You should get what you are entitled to , not just what you need .
Say the rate pays you $2.50 a mile . That's great . No need for a FSC .
But is it right the shipper may have charged a $.30 a mile FSC and only gave you $.15 ?

What I need is what I get when I accept a load. There are many facets that go into accepting a load and it is not black and white. One day what is cheap freight can become OK freight the next day.

I do not tell my carrier when they offer me a load way above what I need per mile they are paying me to much. We have never refused a load because it paid to much.

In the same sense I do not care what they charge their customer for a rate or a FSC.

My rate is between us and our carrier and as long as they offer us acceptable rates I am not going to quibble.

 

[Turtle]

In some sense nobody cares what their carrier charges the customer for FSC, but at the same time, as Dave pointed out, most carriers demand transparency and honesty out of their fleet owners and drivers, and the drivers and fleet owners should expect and demand the same out of their carrier. You lie to your carrier and they get furious, yet many will turn right around and lie to you as a matter of course. It's a matter of principle, if nothing else.

 

[CharlesD]

In some sense nobody cares what their carrier charges the customer for FSC, but at the same time, as Dave pointed out, most carriers demand transparency and honesty out of their fleet owners and drivers, and the drivers and fleet owners should expect and demand the same out of their carrier. You lie to your carrier and they get furious, yet many will turn right around and lie to you as a matter of course. It's a matter of principle, if nothing else.

It's a two way street. Carriers should be up front about things, but drivers also need to be. If you tell a dispatcher you're in such and such location and the dispatcher books you a load that you have time to get to, while in reality you're actually 50 miles farther out and then you keep calling in complaining about the bad "traffic jam" you're in that's going to put you late for the pickup...I've had that happen a couple times, but that's a different discussion.

 

[Turtle]

Yeah, apparently it's so bad with some (or many) drivers that when you call in and tell them you're stuck in traffic, they'll ask you what mile marker, and they'll call the state or local police to see if yer lyin'. If you're in the middle of a snowstorm, the real-time radar online had better show it.

 

[greg334]

Charles,
I am just wondering, do you pay deadhead or relocation miles?

 

[x06col]

It's a two way street. Carriers should be up front about things, but drivers also need to be. If you tell a dispatcher you're in such and such location and the dispatcher books you a load that you have time to get to, while in reality you're actually 50 miles farther out and then you keep calling in complaining about the bad "traffic jam" you're in that's going to put you late for the pickup...I've had that happen a couple times, but that's a different discussion.

Charles, yer jess gitt'in yer big toe wet in this business, you'll have to rassel a lot of bears befor you hang yer spurs up. It's best to jes rassel em yer sef, rather than ask here. The good ones can't imagine what you are going thru with Contractors, and the roast goose hunters don't care.

 

[nightcreacher]

My FSC is on loaded miles only.My line haul pay never changes except if I should do a Straight truck load, or a broker back haul load.I pay my co driver a percentage of all pay except the FSC.As far as the load paying my bottom line,that makes the difference whether I do a load or not,but,if a load would be flat rated with no surcharge,that would increase my co drivers pay.
To do or not do a load is still dependent on bottom line pay.If you want to stay in business you cant run loads in the red

 

[CharlesD]

Charles,
I am just wondering, do you pay deadhead or relocation miles?

If there's excessive deadhead on the load, we just bid higher to try to cover it, so a lot of times the driver will get a little extra to help with deadhead, but there's nothing written in stone regarding a set amount for a certain amount of deadhead. I try to get a good rate on the loaded miles and enough to at least cover the fuel on the dh. I offer the load to the driver and it's the driver's responsibility to accept or decline it depending on if it's profitable. I don't do paid empty moves because in all honesty I'm not large enough to have money sitting around to do that yet. Eventually I might be able to offer that, but I'm not in that position right now. Another thing is that if a load is heading into an area where we think a driver might have to deadhead out, we try to bid a bit higher on the inbound load so the driver has some extra cash for the deadhead out. It doesn't always work out that way when the bidding is overly competitive, but once again, the driver can make the decision whether or not to take the load and we don't even think about tracking acceptance rates and letting that influence future load offers.

 

[CharlesD]

Yeah, apparently it's so bad with some (or many) drivers that when you call in and tell them you're stuck in traffic, they'll ask you what mile marker, and they'll call the state or local police to see if yer lyin'. If you're in the middle of a snowstorm, the real-time radar online had better show it.

I had a broker do that with me a few months ago. I thought it was pretty funny, but I can't say that I blame them that much if they've had a bad experience in the past. I also have a driver who makes a regular habit out of being in traffic jams or having flat tires. By my reckoning, every tire on that truck has been replaced a couple times in the last two months.

 

[Jefferson3000]

I had a broker do that with me a few months ago. I thought it was pretty funny, but I can't say that I blame them that much if they've had a bad experience in the past. I also have a driver who makes a regular habit out of being in traffic jams or having flat tires. By my reckoning, every tire on that truck has been replaced a couple times in the last two months.

Sounds like something sitting behind the wheel in his van is ready to be replaced as well.

 

[moose]

Holding my ground on this one .

FSC is none of my business ,unless i am on a long term flat rate contract . - in that case i would like to know what the cost per gallon will be after deducting the FSC ,as the FSC matrix will always bring it back to that level . there for i can know before being offered a load ,the cost of moving the freight .

for example ,today i fueled up at a 3.12$/G , and after deducting the FSC ,my cost per gallon is actually 96C .
(from that i can take out fuel taxes ,and add hwy used taxes ).
which is BTW only one of many rezones i can move freight for less ,as i truly understand the cost of doing ,and staying in business .

if a contractor is on a % base contract ,then the question is % of what ? - which none of the Expedite carrier that pay % will answer correctly (to the best of MY knowledge).

 

[moose]

You'd better believe it would matter to the customer if they were aware of it . .

and that's why in most industry contract ,there's a line stating something like :

... Contractors are not allowed to disclose or discuses compensations, rates or pay package with: shippers, brokers, costumers, or any other person within the supply chain of the carrier...

it is simply none of the shipper business ,to know how Contractors are being compensated by Carriers .