Among other factors, one of the quickest and easiest ways to get an accurate accounting of a trucking company's worth is to set a flat rate FSC. Just ask Con-Way about that. Con-Way NOW was in the process of a name and logo change, to the point of installing a new logo sign on the building in Ann Arbor just before the buyout. Con-Way had just signed a long term lease on that new building they were in, as well. And they were given many incentives by the city of Ann Arbor to do so. There may be a parallel, or it may all be coincidence, but as one person said, never say never. UPS may have their eye on FECC. hehe
As for toll routing and charging the customer for tolls, don't count on it, at least not very often. It allows sales to approach the customer with more options for their freight. "We can route it this way, via tolls roads, and it will take x amount of time to get to the consignee, but it will cost this much. However, we now have the ability where we can route around the toll roads, and it will take this a amount of time, a little longer to get it there, but it will only cost this much." That's a huge sales tool, as most freight isn't critical enough that an extra hour or three to get it there won't matter, and if it's cheaper, the customer will choose that route (pun intended).
The flat FSC will pay where customers pay little or no FSC, which is good, and is how it's being sold to the o/o, but it will also pay significantly less on the runs that collect a high FSC charge. Bottom line is, you trade an inconsistent, but long-term overall higher amount of FSC pay for a consistent FSC. The increased deadhead pay, and the higher tariffs on some loads will make up some or all of the difference, but only on those select loads. Most loads will not be charged the full tariff, as business competition will dictate what can be charged.
The FSC kitty is not like the NFL revenue sharing at all. With the NLF, the percentage is set at the beginning of each year based on total contract revenue, and then every penny is divided equally amongst the 30 teams, regardless of how many nationally broadcast games a particular team has on this year's schedule. What FECC is doing is, taking all of that revenue, and then distributing it based on the national average for a minute of television advertising, which means some teams will get more for some broadcasts, some will get less, yet all will get a consistent amount for each game, and there will absolutely be something left over in the kitty at the end of the year.
All this reminds me of how the Clinton Administration took money from here and there, and put it there and here, and managed to turn a budget deficit into a budget surplus, all while spending more of my money under the budget.
I hope these changes at FECC are for the better, and time will tell soon enough. It's just rare that a company would restructure things so that they are actually paying out more and taking in less. If everyone's making more, the o/o and FedEx, then great, but I just don't see it happening, what with the competition being what it is. FedEx does have a base of loyal customers (and drivers, for that matter) that they can count on, and in some cases they provide a niche within a niche within the industry, certainly, but overall I think more trucks will be getting paid less over the long haul.
Here's to hoping I'm dead wrong.
