How to Figure Fuel Surcharge?
#11
01-25-2011, 12:41 AM
Here's a quick breakdown of our FSC when the national avg is $3.00
Price FSC 3.00 .37 3.05 .38 3.10 .39 3.15 .40 and so on every .05 increase in avg price raises our FSC .01 Right now we are at .48cpm for FSC At $5.00 National Avg it goes up tho.... 5.00=1.00fsc 5.50=1.50fsc 6.00=2.00fsc
Papa rick, I was told that you take the The average price of fuel in that region and minus the Benchmark price(this is $1.10- Anytime fuel is over $1.10 you should apply a fuel surcharge to cover this cost of the increase). Divided that by the miles per gallon (you average),and this gives you a surcharge rate.
Multiplied by the miles driven gives the fuel surcharge amount you should recover
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#12
01-25-2011, 01:14 AM
That is the plan that Quality Carriers has in place. We have a set price of $1.25 a gallon for fuel. After $1.25 is when the fsc starts and its based on 5.8mpg
#14
01-25-2011, 03:49 AM
Not a prob, just figured it could help u figure some stuff out. I know we have one of the best fsc out there, might as well carry it over to your business.
#15
01-25-2011, 01:47 PM
Papa, yes the benchmark is anywhere from$1.10 to $1.25. I was just using an example I found when I was researching the same question. I usually use the higher # when I'm in a region with high fuel prices, if it lower in a region I use a $1.15. But thats the formula I use and I haven't had a problem with it yet. Good luck.
Let me know what you find out about getting your own Authority, I'm seriously looking into it. I'm tired of wasting my time with these companies..
#16
01-25-2011, 08:04 PM
I don't think so.
$2.06/mile pulling containers? I'll be in Memphis next week to sign up! I'm pretty sure that it would be a percentage of linehaul rate added to the line haul rate. Example: LIne haul $1.00/mile x .3225= $1.3225/mile Since Papa Rick posted about the rates for pulling containers in another thread, I'll use those rates. $1.06/mile loaded + FSC @ 32.25% = $1.40/mile loaded $0.89/mile empty + FSC @ 32.25% = $1.18/mile empty avg revenue would be = $1.29/mile Kinda cheap, but container rates always have been. If it keeps you home and that is important to you, it's probably as good as it's gonna get for local work and you do have a FSC system to protect you from the fuel spikes.
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#17
01-26-2011, 12:23 AM
There are two ways that most carriers calculate the fuel surcharge. Percentage or cents per gallon. As was previously stated, if it is a percentage then it is based upon the line haul rate and added on to the total for the rate. If it is based upon using cents per increase in the price of a gallon of fuel then it can be calculated like this.
I use a base of $1.10/gallon as the base for my fsc calculations. Anything over that price is used to calculate the fsc. For instance, if fuel is $3.50/gallon you would subtract the base line price of $1.10 which would give you a difference in price of $2.40/gallon. If you use a mpg of 5 mpg, then you divide that into the difference to get your fsc. In this example, the fsc would be ($2.40/5 mpg = $0.48/mile fsc). If you use 6 mpg then your fsc would be (2.40/6 mpg = $0.40/mile fsc). Some companies will offer a smaller fsc for their better shippers. If you lease to a carrier they should give you your percentage of the line haul and then add 100% of the fsc to your part of the revenue. I seem to remember that Landstar started taking their percentage of the fsc along with their part of the line haul. Most recalculate their fsc each week when the feds publish the average national price for diesel. It comes out every Monday. You can subscribe to the service at no charge and it will be automatically emailed to you every week. Another factor could be the regional prices as someone else mentioned. I have know of some who base their fsc using the regional average price for fuel and others use the national average for their fleets. If it is done regionally, it could be done based upon either from the point of origin or the receiving end. There are several factors which could be in play when calculating the fsc. The feds use a fsc based upon $2.50/gallon. Some contracts that I have seen the last year don't even show the fsc. It is all calculated in the rate. If you lease to a carrier you need to ask how they calculate their fsc. Sometimes it is the shipper who dictates how the fsc is paid.
#18
01-27-2011, 01:16 PM
A percentage FSC plan will make you some extra money over time. Also remember to DOUBLE your FSC on any shorter hauls (<250 miles).
If you are serious about getting authority, I can help you with that for a very small fee and you will be up and running in 10 business days, if you're serious.
#19
01-27-2011, 02:04 PM
Thanks Load It, really appreciate it, but right now at this time I am leaning going towards leasing on with a Company and getting more experience learning how to deal with brokers and agents.
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Be Kind To One Another, REMEMBER: You Reap What You Sow!
#20
01-27-2011, 02:23 PM
I have a deal with some dry specialized freight out of Atlanta GA area, It does require an OTR truck though unless you plan to sleep across the seats (LOL). You can lease on or run your own authority. Business is steady and will be picking up even more in spring/summer.
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