FSC doesn't matter....or does it???

I took the FSC out of my business model. It's pointless to me unless I am bidding a contract rate.

 

If you are leased on to a carrier that just pays percentage of gross without a FSC breakdown then your percentage is less than advertised. 100,000 loaded miles with a .50 FSC average is 50,000.00 If you're payed 80% of gross that 50,000.00 becomes 40,000.00

 

If you're leased to a carrier - and hauling THIER FREIGHT, than likely, it is CONTRACTED FREIGHT - that you're hauling for whatever percentage your carrier pays you - plus the FSC that is usually BUILT INTO THEIR CONTRACT RATE with the shipper from the get-go (in addition to accessorial pay, etc.). So, if your carrier is paying you %-of-load PLUS FSC (on EVERY LOAD) than either they are CONTRACTING for this with the shipper - or (similar to what brokers do), it's just a "bone" they're throwing you. In either case - the RATE IS THE RATE.

When you're grabbing freight from a broker (outside of your carriers contracted loads) it is SPOT MARKET FREIGHT - so, while FSC may seem like a "negotiating ploy" - $1.90 a mile + $.50 FSC and $2.40 a mile flat - are in essence the SAME THING. So if you're negotiating with brokers on the SPOT MARKET - you negotiate YOUR RATE (of course, taking out what your carrier keeps in your leasing arrangement) and don't worry about the FSC. I'd be more concerned with factoring for tolls, lumper & detention pay - than being concerned if the broker is "keeping' whatever FSC HE HAS in the contract with the shipper. Because, to the broker - whatever FSC HE'S GOT in his contract - is either more in HIS POCKET, or more room HE HAS to negotiate YOUR FLAT RATE.

Rick

 

When you are leased to a carrier it is a lower rate if the FSC is not broke out. Most decent carriers have a standard they use regardless of whether or not the FSC is broke out,contract or spot rate. Your own authority the rate is the rate. Harder to track past cost without breaking it out.

 

The fsc is just smoking mirrors. It can make a little difference if you lease to a carrier that pays 100% of the fsc. It can give you a little higher percentage of the rate. Many brokers will break out the fsc from their rate to make some carriers or owner operators think that they are making more than they really are. I look at the total rate. Whether you break out the fsc or include it in the rate, you need to decide whether the rate is acceptable. The fsc can help if you are in a situation where fuel is spiking. But, I don't do a lot of longer contract hauling so each load is a negotiation. If a load pays my rate then I could care less how it is broken down. Don't be overly concerned about the fsc. I know some owner operators who will not take a good paying load unless it has a fsc. They are being very shortsighted. If you get your rate then don't worry about the fsc.

 

The OP was speaking of being leased to a carrier. In that situation he should get 100% of the FSC,however it is derived. The same for any other accessorial charges.

 

Making blanket statements about anything in this industry is how you miss out on good opportunities.

Do the math on each situation. On loads negotiated by our drivers in the spot market we pay on the gross. It would be very easy for them to negotiate a higher FSC. But we are a different type of company that is looking to be fair on both ends. And this is fair. Most companies that have to do things like this are paying much less than we are and "fairness" has been deleted from the company manual a long time ago.

 

Unless - I believe the case the OP was referring to - was getting loads HIMSELF, from a broker, on the SPOT MARKET. He's negotiating the load himself - so he can't expect the carrier he's leased onto to "negotiate in" additional FSC/Accessorial on a flat rate load he's already negotiated (nor expect his CARRIER to pay him FSC on a load that ISN'T THEIRS to begin with).

Hence the suggestion that, the SPOT/FLAT RATE is the RATE he's negotiating, and FSC is a moot point - whereas "accessorial pay" (lumpers, etc.) is something he wants to make sure he gets on the rate confirmation, and calculates additional costs (tolls, etc.) into the BASE/FLAT rate.

Rick