Fuel for Thought
Fuel Surcharge
Many drivers believe that the fuel surcharge is something that it is not intended to be. Most even believe it is a “right” to get a certain amount or they feel cheated in some way. Fuel surcharges are completely optional and the amounts can vary widely from customer to customer or even carrier to carrier.
What we now know as the fuel surcharge began back in the early 1970’s, 1973 to be exact. Back in 1973 it began as a result of the Arab oil embargo. It was designed to help compensate carriers for the dramatic fuel price fluctuations due to the oil crisis of the time. Once the prices leveled out, these surcharges were eliminated completely. They would be resurrected in the 1990’s due to spikes in oil and fuel prices and have remained in effect since then.
Contrary to popular belief, there is no federal or state standard for the amount that a fuel surcharge should be on any given day. There are guidelines, per se, but in all actuality there really is just a weekly update by the EIA (Energy Information Administration) to “guide” fuel surcharges based on the weekly national average of fuel prices.
Each carrier uses the weekly national averages posted by the EIA to determine their fuel surcharges for that week. Each carrier has their own criteria for determining their fuel surcharges. Also you must factor in the customer’s fuel charge rate. Some customers will define their own fuel surcharge to the carrier(s).
The fuel surcharge was not meant to cover the entire cost of the fuel to move a load from Point A to Point B. It is meant to level the cost of a gallon of fuel to a certain point. Depending on the criteria used to determine the fuel surcharge and the MPG (miles per gallon) your truck gets, the fuel surcharge can cover all or more of the cost (if you get better than average mileage) or will cover significantly less than your fuel cost (if you get far below average mileage).
If you would like to get more from your fuel surcharges to offset the high price of fuel, there are several things to consider.
Tires. When you need tires, look for those which have a lower rolling resistance. This will save you money over the life of the tire by using less fuel. While it may be tempting to get the cheapest tires out there, in the long run, they will most likely cost you more over the life of the tire by increasing rolling resistance and causing you to consume more fuel.
Speed. When possible (as your schedule permits), slow down. Why travel faster than you need to, only to sit and wait. Slow down, save fuel and keep more of the revenue at the end of the day.
Equipment. If your truck is inefficient, it will use more fuel. New trucks are expensive but they also are more efficient. Decide for yourself if upgrading your equipment would actually result in higher revenue. If you are keeping an older truck, consider some upgrades to make it more efficient.
Idling. Not only is idling wasting fuel, but most truck engines do not do well over time with excessive idle times. Consider an APU (Auxiliary Power Unit), an EAPU (Electric Auxiliary Power Unit), a generator or even solar panels and a battery bank. There are many more options today for driver comfort during rest breaks or downtime than there were 20 years ago. Do some research and find the best option for your operation and budget.
See you down the road,
Greg