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fuel surcharge

Moot

Moot

Veteran Expediter
Owner/Operator
That's all well and good, but as Zorry pointed out, how fast can your carrier adjust to a sudden fuel price spike?

When I was in LTL, Con-Way Central Express adopted a FSC program. This was in the late 80's. It was similar to what other large LTL carriers used. At that time the purpose of a fuel surcharge program was to cover the cost of fuel due to the volatile nature of the pump price of fuel. Customers were more understanding when it came to paying an fsc that was adjusted weekly rather than pay an across the board tariff increase. It was also simpler for the carrier to use an adjustable fuel surcharge rather than changing their published tariffs constantly. Today I believe many carriers are using fsc as a profit center. This may be because they believe the customer is still more willing to pay an adjustable fsc than a wholesale rate increase. It's a psychological thing.
 
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garyatk

Seasoned Expediter
My last experience was one of a FSC fluctuating on a load by load basis. Sometimes not even knowing what the FSC was until after the load was done. I would much rather know the rate I am getting and what my profit will be before accepting the load. Besides, there is too much opportunity for manipulation of rates with the FSC system as it is. I would rather be in a position to have to trust my carrier to pass along the agreed upon percentage, and not have to trust that I am getting all the FSC also.
 
Moot

Moot

Veteran Expediter
Owner/Operator
I'm guessing your carrier is probably charging their customers a fuel surcharge. You are probably reaping some, if not all of that fsc, but it isn't being broken down separately, you see it as your percentage of the total charges.
 
Moot

Moot

Veteran Expediter
Owner/Operator
garyatk said:
All I know is that I am getting better revenue to my trucks. That is all that matters...
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Revenue is one thing, but it isn't all that matters. In 1998, with my previous carrier, I got .96/ loaded mile, no fsc. Today, with my current carrier, I get .77/ loaded mile and this past week, .25 fsc. That's a $1.02/ loaded mile. I can proudly state that I am getting better revenue per my one van with my current carrier than I did with my previous carrier. I could also state, "that's all that matters." Then I look back and see I was paying less than a $1.00 for gas. My revenue my be better, but my profit isn't. For me it's about profit. I'd gladly give up a 10% increase in revenue today for a 5% increase in profits Tuesday.
 
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garyatk

Seasoned Expediter
I understand the difference between revenue and profit. As I said, I am doing fine. You need to know what rate you need to make a profit. It doesn't matter whether you get a FSC or not.
 
tenntrucker

tenntrucker

Expert Expediter
Moot said:
I'm guessing your carrier is probably charging their customers a fuel surcharge. You are probably reaping some, if not all of that fsc, but it isn't being broken down separately, you see it as your percentage of the total charges.
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Thats the way it is for me, I get my % off the total bid.

Sent from my DROID X2 using Tapatalk 2
 
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garyatk

Seasoned Expediter
So when a carrier bids on a load, do they bid linehaul plus FSC? Or do they bid one price and break the FSC off? If so, why?
 
tenntrucker

tenntrucker

Expert Expediter
From what I'm told its an all included bid. FSC isn't done separately. All I know is my average weekly rate is very good. If I have a grip with my carrier, it's not with my per mile rate.

Sent from my DROID X2 using Tapatalk 2
 
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garyatk

Seasoned Expediter
So if it is an all included bid, why would the carrier go through the hassle of splitting it off when they pay the contractor? And why would it change from load to load? It just looks like a grey area, that isn't necessary...
 
OntarioVanMan

OntarioVanMan

Retired Expediter
Owner/Operator
garyatk said:
So if it is an all included bid, why would the carrier go through the hassle of splitting it off when they pay the contractor? And why would it change from load to load? It just looks like a grey area, that isn't necessary...
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A lot of razzle dazzle to get to the same point....

One customer pays a good FSC say .40 +.60 for the line haul
another only pays .20 and its .80 for line haul....both equal $1.00....
 
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garyatk

Seasoned Expediter
So is the carrier bidding a straight $ amount, or are they bidding a linehaul $ plus FSC $? Why isn't the bid just a $?
 
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garyatk

Seasoned Expediter
Yeah, I am not too sure if this FSC fee is a way to stabilize fuel costs, or if it is a way to get a few more bucks out of the contractor... But it is what it is. I am happy where I am at.
 
OntarioVanMan

OntarioVanMan

Retired Expediter
Owner/Operator
garyatk said:
Yeah, I am not too sure if this FSC fee is a way to stabilize fuel costs, or if it is a way to get a few more bucks out of the contractor... But it is what it is. I am happy where I am at.
Click to expand...

It all comes back to the same thing Gary....the TOTAL per mile...:)
 
zorry

zorry

Veteran Expediter
It's for long term contracts. We'll cover your frt for the next 24 months at this rate. Plus FSC.
There'd be a clause to re-open under extreme situations.
 
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