Fuel Surcharge
- Thread starter TonyM
- Start date
Here's some info http://ooida.com/Swimming_sharks/MAR fuel surcharge kit.htm
Reputable carriers will charge the surcharge and pass 100% on to the one that purchased the fuel . However there is no egulation requiring the carriers to do this .
Reputable carriers will charge the surcharge and pass 100% on to the one that purchased the fuel . However there is no egulation requiring the carriers to do this .
Welcome to E.O. Tony!
Fuel surcharges have been adopted by motor carriers, airlines and probably pizza delivery places to help offset the rising costs of fuel. A portion of this cost is charged back to the customer in the form of a f.s.c.
Most carriers negotiate different rates with each customer. With the better customer usually paying less in f.s.c.
Some carriers pass along 100% of the f.s.c. they charge their customers to the owner/operator. Some keep part of the f.s.c. And still others pay the O/O from a formula that is based on the nation wide weekly retail price average of diesel fuel. This formula is set up to keep the theoretical price of fuel for the O/O at a constant set figure.
My contract pays me under the latter system. Although I am the exception at my carrier. The theoretical price I pay per gallon is $1.25. This is based on 12 m.p.g. Since I own a gas powered van that averages 16+ m.p.g. and gas is generally cheaper than diesel, I usually come out ahead.
Last week my f.s.c. for all loaded miles was .14/mile. This is for a cargo van. I may have carried a load that only paid the carrier .10/mile or a load could have paid .25/mile, but I received .14/mile. This eliminates one variable from the decision making process when deciding on whether or not to accept a load. And keeps the price I pay for fuel at a known constant.
There may be other methods of calculating and paying fuel surcharges, but these are the ones I am familiar with. It can get complicated so be sure you know how you will be paid before signing a contract.
Fuel surcharges have been adopted by motor carriers, airlines and probably pizza delivery places to help offset the rising costs of fuel. A portion of this cost is charged back to the customer in the form of a f.s.c.
Most carriers negotiate different rates with each customer. With the better customer usually paying less in f.s.c.
Some carriers pass along 100% of the f.s.c. they charge their customers to the owner/operator. Some keep part of the f.s.c. And still others pay the O/O from a formula that is based on the nation wide weekly retail price average of diesel fuel. This formula is set up to keep the theoretical price of fuel for the O/O at a constant set figure.
My contract pays me under the latter system. Although I am the exception at my carrier. The theoretical price I pay per gallon is $1.25. This is based on 12 m.p.g. Since I own a gas powered van that averages 16+ m.p.g. and gas is generally cheaper than diesel, I usually come out ahead.
Last week my f.s.c. for all loaded miles was .14/mile. This is for a cargo van. I may have carried a load that only paid the carrier .10/mile or a load could have paid .25/mile, but I received .14/mile. This eliminates one variable from the decision making process when deciding on whether or not to accept a load. And keeps the price I pay for fuel at a known constant.
There may be other methods of calculating and paying fuel surcharges, but these are the ones I am familiar with. It can get complicated so be sure you know how you will be paid before signing a contract.
nightcreacher
Veteran Expediter
Back in 1981 when the fuel prices went nuts,and there were many other issues,the trucking industry had a 2 week shut down.At the end of the shut down,weights went to 80000 lbs,larger trailers,48ft lol,and a fuel surchatge.At that time,the formula was for every penny over a 1.15/gallon,devided by 5 mpg there would be a surcharge to the owner or whom ever was paying for the fuel.Since that time,most carriers pay a fuel surcharge if the fuel costs dictate to it,and the feds say its ok.
Last year where i lease my truck, they changed the way we were getting paid,as many of our customers would not pay the surcharge.Originally we were getting a percentage of the gross pay for the surcharge,now we get a flat rate per mile,each week when the national average of fuel changed,our fsc also changes.It is set that we never pay more than $1.20 per gallon,and each size unit is based on there miles per gallon,for me thats 6 mpg,but since i get closer to 7 mpg,and sometimes even more,my actual fuel costs are less than the $1,20
hope this helps.Just remember,whom ever pays for the fule is to get the fsc
Last year where i lease my truck, they changed the way we were getting paid,as many of our customers would not pay the surcharge.Originally we were getting a percentage of the gross pay for the surcharge,now we get a flat rate per mile,each week when the national average of fuel changed,our fsc also changes.It is set that we never pay more than $1.20 per gallon,and each size unit is based on there miles per gallon,for me thats 6 mpg,but since i get closer to 7 mpg,and sometimes even more,my actual fuel costs are less than the $1,20
hope this helps.Just remember,whom ever pays for the fule is to get the fsc
