Fuel Surcharge
 

Hello all,

I did a search on the forum for Fuel Surcharge but no results came back, so either i did something wrong OR i need to just ask this question!

When looking at loads on a loadboard website do you as the O/O charge a fuel surcharge? Hopefully i'm asking this question correctly. Here is an example just in case:

If I take a load that pays let say $2.25pm would i add the fuel surcharge to the $2.25pm?

Any advice or input?

Thanks,

Teemobile

I don't think so. If you take it at 2.25 that's what you get 2.25.

Where and when does a fuel surcharge come into play? Is this something only the large freight companies are able to charge the customer?

You can charge the fuel surcharge at any time. I could care less about the fsc. The rate is the same, with or without the fsc. I have used a fsc in the past. The way it works is based upon the national fuel charge. It changes from week to week. I used a base fuel rate of $1.19/gallon. To come up with a fsc, you take the national fuel price, substract the base rate you use and divide by your mpg. I used 5 mpg. To further explain I will do an example for you. Lets assume the national fuel cost this week is $3.69/gallon. ($3.69 (fuel price)-1.19 (base fuel charge rate) / 5 (mpg)) = $2.50/5 = $0.25/gallon fsc.

Any carrier, regardless of size, can use a fsc. The fsc is mostly used on longer term contracts to offset spikes in fuel prices. If you mostly use spot market rates, it won't make any difference since rates are normally higher and should offset the fsc. Lets say that a load pays $2/mile. Another pays $1.75 + 0.25 fsc. The rate is the same. If you run your own authority, find a minimum rate you want to haul a load and don't go under that rate. You may also have a target rate. I look at the rate and don't worry about the fsc. When you look at the fsc, it is like smoking mirrors. It isn't that the fsc is not important, but unless you are leased to a carrier, it becomes much less important to your business.

Have you ever negotiated with the customer to get a higher price per mile if the quoted rate is lower than other loads? Looking at some load boards there seems to be a small range of what some companies are paying to have a load moved; for example: $1.90pm opposed to $2.25pm.

You can ask. It depends on how quick they need it moved.

In your opinion, do you see that most load boards price per mile is pretty accurate?

Every load is a negotiation. Rates posted on loadboards can be deceptive. They only reflect what those who report the rate are booking loads. Only use those rates as a loose guideline. I usually do much better than the rates they list. It is only another tool you use when negotiating rates.

I don't find them to be at all accurate, but it can be an indicator of what is going on in the marketplace. I always look at those rates with a healthy bit skepticism.