OK The labor rates have doubled but what about the difference in the cost of liveing expenses dureing that time span compared to the increased labor rate ??? Is the lift truck operator actually makeing any more money ???

 

That' my point exactly. Yes just about everything doubled in cost. That person in no better OR worse off than before. Some things did more than double, but some things went down in cost. The reason I wanted to exclude fuel is because of the FSC. I know my question is hard to answer because you can find the freight rates today that are doubled in any given day. I'm sure you can find frieght today that is being hauled for $1.25 AND some that is at $2.50.

I have another question: How far down would the price of fuel have to fall until the FSC would be $0 ?

 

I would say $1.299 per gallon.

 

Is the FSC enough to cover the difference of the $1.29 and the prive at the pump?

 

No....the FSC brings the over-all cost of fuel purchases down to about that level. Some companies have a great FSC, some do not. If a driver watch's the pump price, and only buy's at the lowest dealer, he can come out better with the FSC.

 

Ridge Runner, when I first started driving the minimum wage was about $1.25/hour and many people bought homes and earned a living at that rate. Long haul truckers were paid about $0.10/mile. New trucks could be purchased between $25-32,000. In the 1960's to early 1970's kerosene and diesel sold for $0.15-0.17/gallon around here and as much as $0.25/mile in other areas. Rates were higher and fixed before deregulation. Rates were the same for specific freight lanes. Things changed after deregulation. Before deregulation, it was not easy to get your own authority. In fact, your potential competitors could block you from getting your authority if they chose. It could possibly happen today, but is not likely. While rates have remained pretty much the same as then, fuel has gone up 20 fold. However, wages have gone up about 2-3 times what they were at that time. New trucks cost about 4-5 times today as then.

An owner operator is an independent businessman. Businesses can't go on strike. We can refuse to haul freight for less than a certain level, but that is left up to the individual businessman. We can share what our minimum haul rate is but cannot fix prices as a group. To do so is illegal. OPEC gets away with it because it is a collective of countries and not subject to U.S. law. As costs rise so should our minimum haul rates. Unfortnately, that doesn't happen with most owner operators.

As owner operators and independents you have the power to control your own rates. Refusing to haul for cheap rates will eventually cause rates to rise. I just turned down a load going to Long Island for about $2/mile. I told the broker that it was under our minimum for that area. I won't go to Long Island for less than $3/mile. There are $200 in tolls and likely a deadhead of about 200 miles or more to get out and find a decent load. That is the way I handle it. I have no doubt that someone will haul it for that rate. It is the free market at work. I have turned down more loads than I have hauled due to the cheap rate. Only last week I was offered a rate for about $0.76/mile. Gotta be drugs. While this time may be painful for most of us, it is also a naturally occuring business cycle. If it were not high fuel prices it would be something else. Most businesses are not perpetual. They have a life cycle. Those who control costs and debt can survive. Those who ignore their costs, have high debt and haul for cheap rates will not be able to survive. The silver lining to this is that when they go out of business capacity will be reduced and rates will rise to match market demands.

 

My last load FSC was $0.45 a mile, and that's exactly, what it cost me to run that mile! 8)
DH and "out of route", is a different story... :sad:
But when it's all said and done, fuel is still a bit under a buck a gallon+FSC for me!
So basically, I'm even making money of it! 8)

 

I've only had one load that paid a FSC. Of course I'm talking dry van freight, but the brokers only quote the gross. Either way I have a calculator, but I think it is an attempt to ignore the rising cost of fuel, or to just steal the FSC.

jonboy

 

Me too! I'm too lazy, to pull anything else!
I'm leased to a carrier, so since I'm getting 72% of the line haul, but 100% of FSC, it does make a difference to me, you, should be just concern, in the rate, and adjust accordingly! 8)

 

If there was a "shut down" what exactly would be the stated purpose "We are shutting down in hopes of............."

Like........ We are shutting down in hopes of making supply and demand go away. :shock:
Or.... We are shutting down for the purpose of trying to get as much money as the more wealthy operators who are gifted and successful in their efforts.
Or.....We are shutting down because the free market system can be improved on. Yeh. Like how would a shut down change anything? Like the shippers would all say "Oh gee, I guess we really DO need trucks!" ?? They already know this and they are aware of the supply and demand and are getting the best rate they can.

But they may not like to see a "shut down" b/c after one week of no work, some low rate operators may fold. oops. The supply just went down.