Fuel Surcharges Continue

How important is knowing your costs?

Apparently very important according to Todd Spencer of Owner-Operator Independent Drivers Association. Who said “we’re telling truckers that you have to know your costs, and don’t agree to take loads that won’t compensate you for the increased costs,”

But independent haulers lack the bargaining power of the larger trucking companies. The majority of fuel surcharges are figured on previous week’s or in some cases previous month’s fuel prices. Because, fuel costs are going up at such dizzying rates. Fuel surcharges, don’t currently keep up with the cost increases, so most owner/operators don’t see enough of a rise in revenue from the fuel surcharges going into their own pockets.

And with the price of diesel more than doubling in six years, some of the smaller companies are losing drivers because the Owner/Operators can’t afford current fuel prices. Some companies are cutting office staff and even trimming phone and air conditioning costs, to keep their trucks rolling and pay their drivers.

The big companies with hundreds of trucks are better able to absorb fuel cost increases, but they are the heavyweights when it comes to dealing with shippers. The American Trucking Association’s chief economist Bob Costello summed it up. “We no longer see that correlation where a 10-cent rise in diesel prices translates into 1,000 carriers going out of business. Fuel cost doesn’t have anywhere close to the impact it used to because fuel surcharges are helping defray those costs tremendously.”

Costello figures Owner/Operators should be able to leverage the driver shortage to their advantage because shippers need every truck right now. He said, “If you can’t make money trucking under today’s conditions, then you can’t make money in trucking, period.”

In my opinion, this is only partly true, in order to leverage the driver shortage you had n have to be able to negotiate your rate with shippers, brokers, or your carrier.

Are you able to leverage more money on your loads?
Are you receiving the entire fuel surcharge being billed to shippers?
Combined with the current hauling rates are you receiving enough for your efforts?
Would you make more money if you negotiated your own rates with
shippers or carriers?

Something to think about …