It's a Team's Life
These Fuel Prices are Killing Me
Do you have to receive FSC on every load by law? No, it is up to the billing company to have a line item for FSC and they do not have to pass that money on to the person actually buying the fuel. There are other instances where an FSC is not needed and that is in the spot market. If hauling one load for a customer paying enough in that day's market there is no need to add an FSC.
Over the years we have watched as drivers turned downloads as the FSC was not high enough even though the load was paying exceptionally well. The mindset that we have to have FSC on every load without looking at what the load is paying is shooting ourselves in the foot. Look at what the load pays and decide if you want the load or not. Of course, there are other factors to consider such as where is the load is delivering,
Fuel Surcharge is based on the marque price, not the deep discounts that companies negotiate. That is good for anyone receiving an FSC and purchasing discounted fuel. Friends often say “I feel bad for the truckers who are having to buy fuel at these prices”. My thoughts are I feel sorry for those having to buy fuel at these prices that have to commute to work. The high price of fuel is a huge pay cut for those driving to and from work.
Most of the trucks we see in expediting start out aerodynamic and then drivers or owners add accessories to hurt the aero package. Adding a visor, bug shield, or a grill guard to the front of the truck hurts fuel mileage. Even running low rolling resistant tire at the wrong air pressure hurts fuel mileage. Adding a sleeper that does not conform to the shape of the truck will hurt fuel mileage. Weigh the difference in fuel costs versus the product that is being added to an aero truck. Will the sleeper offset the fuel loss? Is the grill guard needed? Ect.
The higher the fuel surcharge goes the more profit can be made by a fuel-efficient truck until… At some point, the market has to give as the prices in the store increase due to the cost of having their products shipped in. The person that is having their expenses increase due to gas prices and income not increasing has to start cutting back somewhere and that will be their purchases that truckers deliver. The high fuel mileage trucks can enjoy the fuel surcharge while it is high and still do well when fuel prices go back down.
As prices fluctuate the fuel discounts that companies have negotiated fluctuate wildly and at times the discount is huge and when we think the discount should be huge it is smaller. An article by ATBS explained this really well:
One thing to keep in mind is that fuel prices typically adjust faster at the fuel pump than fuel surcharges adjust in shipping contracts or the spot market. This means that in a falling fuel market you will pay less for fuel than the fuel surcharge is paying until fuel levels off. This can mean a windfall of cash during falling fuel prices. On the contrary, when fuel prices rise you will be left with a cash deficit until fuel prices level off. This is something to be prepared for with extra cash in your savings account so you can weather the fuel cost increases.
The bottom line is to be prepared and enjoy the profit from the FSC when you can and have money to tide you over till the prices catch up with each other.
Bob & Linda Caffee
TeamCaffee
Saint Louis MO
Expediters since January 2005
Expediting isn't just trucking, it's a lifestyle;
Expediting isn't just a lifestyle, it's an adventure;
Expediting isn't just an adventure, it's a job;
Expediting isn't just a job, it's a business.