let's talk fleet managers

So... I'm nowhere near an expert here... but I find a flaw in your numbers. I doubt 7.2 mpg is "on the low end" and $3.95 per gallon is "on the high end". I'm not trying to nitpick... and am not a super trucker, actually I just started TNT. I am, however going leas in a year or two as the only experience I have prior to prime is riding in the truck. I'm just trying to help here... you may want to refigure your figures.

 

Thanks coal. And once again I wasn't trying to nitpick lol... just trying to help where I can. Just thought they looked a little off based on what I have seen. Good luck in your endeavors.

 

Averaging around 7.5 mpg and fuel prices are avg around 4.05 which isn't far from your numbers... but its kinda like when I plan a trip.. I plan on 50mph... I'm doing 58 almost the entire time but what if? What if I hit traffic? What if fuel prices spike? What if the tires you bought are causing a drop in mpgs? You always have to plan for what ifs...

 

Traffic... do your driving first so that the extra time on a trip is at the back end. That way if you're delayed you'll have the extra time to deal with it. If it means you're going to be late, you want to inform dispatch as soon as you're aware of it.

Fuel... obviously you don't understand how fuel surcharge works. The higher fuel prices go, the more the owner-operator benefits... as long as you're getting great fuel economy.

Tires... if you understand how rolling resistance works, you won't have that problem.

 

Good reason I will be driving company before leasing... I have no clue what any of this means.
IP... obviously I don't understand how most of this works lol... I'm just getting into this and have A LOT to learn...
Coal, I was actually trying to be less optimistic with the mpg and fuel cost... but now I'm starting to get confused. So maybe instead of trying to help I should be the one seeking help.

 

Fuel surcharge is a variable reimbursement meant to insulate a business from the effects of volatile fuel prices. Freight contracts are generally let on a long-term basis, quite often for a year. During the course of that year, fuel price can vary greatly... which if you bet wrong on how prices go, can quickly gut a companies profits. Fuel surcharge is set to protect both the shipper and the carrier. It's based on last weeks' average fuel price, and uses some relatively arbitrary set points to achieve a desired surcharge rate. Usually it's based on the national average fuel price reported by DOE (I think) and assumes a truck gets 6-mpg and the desired fuel price is $1.25 per gallon. Prime uses our average fleet fuel price after the corporate fuel discounts are deducted.

Say fuel is $4.00 per gallon fleet average... at 6-mpg, that works out to $4/6mpg or 66.7 cents per mile for fuel costs. What fuel surcharge does is to provide a payment to return that price to what it would be for fuel at $1.25 per gallon or $1.25/6mpg = 20.8 cents per mile. 66.7 - 20.8 = a fuel surcharge rate of 45.9 cents per mile. So on a 1,000 mile run, you'd receive $459.00 in fuel surcharge payments. Byzantine, but that's how it's computed.

To complicate that, what Prime does is collects fuel surcharge based on it's shipping contracts... so a customer may pay more or less than the fuel surcharge based on our fleet average. Whatever is collected is passed on to the operator. On new contracts, if Prime collects more than what is set by our fleet average, that difference over the fleet average fuel surcharge is split between Prime and the operator according to the linehaul revenue split of 28/72 to the company/operator... which really doesn't amount to a whole lot for the individual. When they instituted that policy, I was keeping close track of fuel surcharge rates, and what I collected... so taking data for a couple of months, figuring the hit for a year averaged over all miles... it worked out to the company getting about 0.1-cpm. That kind of decrease in your revenue isn't all that significant.

The jist is if fuel prices go up, your fuel surcharge payment goes up. Do a great job on fuel economy, and you can actually make money on the fuel surcharge.

On spot market freight rates (one-time loads) fuel rates are worked into that one-time rate... so fuel surcharge only applies to long-term contracts.

Rolling resistance is something that is calculated to figure out how rolling friction affects tires. There's not an industry standard yet, and manufacturers play that off of each other right now. Michelin is the only manufacturer who really tests nearly all tires from all manufacturers using a single standard. You can see how that works using their tire calculator page...

http://www.michelintruck.com/michelintruck/toolbox/FuelSavcalculator.jsp

Once you get into it, there is a table that lists various tire models, and it specifies a non-dimensional number that indicates what the rolling resistance is. The higher the number, the worse the tire is for fuel consumption. Lower your truck's overall rolling resistance by about 10 points, and you'll gain about 0.1 mpg.

Pouring Coal. Your per-mile rate for fixed costs is rather optimistic. My '09 Cascadia ran about $1.24 per mile under a 3-year lease agreement. That's not including an emergency fund.