What the heck is a Fuel surcharge, and why am I paying for it?

After running my first full year OTR with the large mega carriers, I will be going to work for a small trucking company here in the next few weeks. They run brokered loads for C.H. Robinson and are working on leasing to Jb. They own three of their trucks and the others are leased from Penske. I have no idea what I will be driving yet, but whether or not that makes a difference in my question i havent a clue. Now the owner informed me that I will be making 23% of the load minus a 2% fuel surcharge for a grand total of 21% of the load. Not the greatest I'm sure. My question being, if I am not paying for fuel, why are they charging me that 2%? Thanks in advance.

 

Then you are getting ripped off!

Tell them to pound some sand....they probably know how that is done!

 

Cant defend myself against what I dont understand. Care to elaborate?

 

If he is charging you the driver a fuel surcharge than you are paying for fuel, in part.
Fuel surcharge is in a way an offset for the cost of fuel, which is charged to the shipper, broker or reciever as part of the contract to haul their freight.

No driver should ever be paying a fuel surcharge!

 

A-ha! I see... thank you for the info.

 

They are considering the FSC as part of the revenue to the truck. They are witholding 2% of that from your pay.
Here is an example:
You get a load of 1,000 miles that pays $1,400 gross plus FSC. The current charge is 0.45cpm. So your FSC is $450.
Total gross to the truck is $1,850. You are paid 23% of that, or $425.50.
However, they are withholding 2% of the FSC, or in this case $8.50 from the gross revenue. So your 23% is figured on $1,841.50.
Now I suspect what you're meaning to say (and they are trying to tell you) is they are withholding 2% of your pay as a FSC deduction.
In that case, they are simply paying you 21% of the $1,850 or $388.50.
The difference in this case is 0.426 per mile vs 0.3885 per mile.
Either case, your earnings are substantially higher than your first year, I'll bet.
The biggest variable as to your earnings will be the gross to the truck for the load.
If they are taking that 1,000 mile load at $1,000, then your gross to the truck is $1,450. At 21%, you earn $304.50, or roughly 0.305 per mile.
Same load, different rates.

 

I swear some people have real brass balls to try some of these stunts and tricks. Are you sure that you got the info right, that you'll be PAYING, not MAKING 2%?

 

When they get a load the owner will get a haul rate plus a fuel surcharge. The driver usually never has anything to do with the surcharge. I drove for a guy that actually paid me a percentage of the fuel surcharge. I got 25% of the load then 25% of the surcharge. That seemed odd but I wasn't gonna argue about more money in my pocket. You should never be charged to drive for a company.

 

I'm going to call bull #### on this one.

No offense meant to you guys who tried to break it down and explain it, in a reasonable way. But it doesn't pass a smell test at all.

Here's why.

Why bother with all the numbers play. When the "owner" could have simply offered him 21% from jump street.

I realize, there will be a significant variance when fuel surcharges fluctuate. But the bottom line is, the driver should have a set paremeter to base his pay on.

And 21% just plain sux....period.

The 2% ??? Does it come out of the actual FSC, or does it come out of the GROSS paid to the truck, including the FSC???? Big difference.

 

Keep your eye upon the doughnut and not upon the hole.
You are getting 21%.

I do understand the need to understand though.
Odd way of doing things.