Operating cost with rising inflation

Wyatt, I think you are obviously onto something here. I think I can give some insight to our issues. Yearly contracted rates, in this market should be deceased, or at least shortened to quarterly bids. You can price accorindingly for a 2-4% market fluctuation, but quoting for a 11% change in market is impossible. Either you won't win the lane, or your customer will decrease your opportunity to move their future product, based on the outragous rates you gave in the bids. I also think nobody has ever seen a market as crazy as this one. Brokers are learning and with the craziness of this market, most of these brokers are new guys hired by growing companies. Running into guys that have no idea what is going on is sadly just going to happen. I hope I am not far off here, just trying to give you a little insight from this side of the table. Thanks for opening up a good conversation for everyone to chime in on.

I believe the obvious solution to the problem is implementing a fuel surcharge. Every negotiation should include your rate PLUS the posted national fuel surcharge for the period the load is to be moved. That way, you can bid your rate which is negotiable but the fuel surcharge, is passed on. Additionally, a realistic detention clause should be established to put the burden of keeping the trucks moving exactly where it should be, with the shippers and receivers. If you order a truck and can't get it loaded or unloaded, the cost should be painful enough to make the guilty party avoid the detention in the first place, otherwise there is no motivation to change the practice.

Before anyone says it can't be done, I call bull..it on that argument. It is being done in other segments of the industry. The problem is no one in loop cares enough about our operating costs to do something about it. The value of the product should have no bearing on the cost to move it. Our cost of operation are exactly the same if we are hauling corn or gold bars. If the end cost of a product is primarily due to transportation, so be it.

That is just my opinion, and I could be wrong. 😎

I have a hard time wrapping my head around everything that is happening today. With fuel prices getting out of hand and brokers not wanting to pay a higher rate, I've decided I'm going to charge a fuel surcharge to make up the difference. I looked up the fuel surcharge chart that is good through 3-8-2022 and fuel at 6.009 per gallon it shows you can charge $0.98 per mile. If the load is a 700 mile run, you'll get $686. That will cover most of the fuel. When a broker says they'll pay X amount and its not any where near $3.00 or more, I'll start charging a fuel surcharge. Also have an understanding that if I am to haul their load I will be paid the FS along with the agreed rate. Just that simple. I can't starve to haul a load the same rate 2 or 3 yrs ago today. The cost to run my truck has gone up A LOT and I'm sure many of you know how much these things cost. I do agree we all need to stick together and demand that we get paid more money to haul the same load we did last year or the year before. I wish the best for all of us!

Very good point folks. Fuel surcharge. I never necessarily thought about that. We typically operate with an "all in" rate, which usually keeps us around four dollar a mile. I always try to keep any one helping with our loads around the same. Building a reputation for honesty and transparency is important to myself and my team. Whether or not that will pay off, who knows. But that's the principles we operate off of. So all those things considered, we have recently been receiving a FSC from several customers. The FSC flucuates drastically. Some pay .41% per load.....yes .41%, which is their current rate. Then you have others that are at "an industry standard" of .11%. No idea how these customers formulate their FSC, but it def helps us. I know our bottom dollar and top dollar operating cost and this FSC from all of them helps keeps us in the median range. So a FSC would be a good way to go. Do you all ask for a 3 to 3.50 per mile rate, then tack on the FSC? Or is the FSC factored into your rate? Surprisingly, not many people know much about FSC. Not to say I know any more than the next, but we have done some research the last few years and really found a sweet spot of 3.50 to 4 a mile plus FSC. What FSC rate or graph to go off is another question. Seems wild to see the fact we request and typically are obliged with 3.50 to 4 a mile. Then I see other folks running the same freight for 2.25 or 2.50 thinking they are making a killing. IDK....very bass ackwards in the industry. I'm sure some of you old timers would say the same happened in your yonger days. I'm no spring chicken, but not a newbie. So those veterned opinions on how you operated back before large scale/online brokering started occuring, would be appreciated. Thanks again to all.

Is there a website for the fuel sucharge rate?

We do tankers, and hazmat a lot of the time. The way we base our rates is double what the market will bare on other specialized eqiupment plus FSC. The reson why it's double the rate is because we just expect 50% empty miles, sometimes it 's even more than that, sometimes less, so our rate for all miles is similar to specialized freight, but we do about half loaded. Our FSC chart starts at $3.00 per gallon and is 15%, it goes up .5% for every .05 cents of fuel price increase. The most we've been paid is 36%, but I just email the chart to my customers. Some really balk at it, some have seen similar and we just negotiate. I am not trying to take advantage of anyone, but this is a business. Without profit we can't perform a necesarry service. With profit we can have nice equipment, and keep good drivers. Every bit of that is a service to our customers, something that someone doing it cheaper will not be able to provide long term.

What are "high rates and high fuel surcharges" in numbers? Your vague description is subjective based on what you think "high" means. You would sound much more convincing if you talk specifics.