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

okay - should have said FURTHER HIJACK...

Rick

 

If the owner operator is getting good rates then the fsc will have little impact on his bottom line. For instance, if the line haul is $1/mile and the fsc is $0.40 he will make less than if he got a flat rate of $2/mile without separating out the fsc. Whether the owner operator receives a fsc is relative. I would rather have the $2/mile rate than the $1.40 which includes the fsc.

 

By the way, the fsc can change weekly when the new national fuel averages comes out. This is when most carriers and shippers make changes in the fsc.

 

Edited... will comment later from a laptop instead of a smartphone

 

At least use the same gross for an example. That one was just ridiculous.

 

OP, per your question, how a carrier would do it if the driver finds his own brokered freight. If the fuel surcharge fits in the realm of reasonable and customary, most carriers will pay the surcharge quoted by the customer or broker. In the absence of a broken down surcharge, most carriers will break out a reasonable surcharge based on the weeks price per gallon, as the price has the fuel factored into the spot rate. This makes it much more fair to the owner operator actually buying the fuel. Example, cheap freight paying 1.50 on a 80% contract pays truck 1.20 per mile. Same freight with .35 per mile surcharge pays 1.27 per mile. Any carrier not breaking out fuel is not being realistic or fair to the o/o.

 

What is ridiculous about it? It is realistic with why the fsc is more important to some than others. When you run for cheap rates the fsc is much more important to your bottom line than when you are getting a higher rate. I don't consider $2/mile a really great rate, but it is much better than $1.40. But, I will play along. Which would you rather have, a flat rate of $2/mile or a line haul of $1.60 and fsc of $0.40?

 

Just going to say I don't ever book a load and have the broker cut some of that rate out as surcharge. I could,and that is leaving money on the table, I just don't. As GMAN points out if a guy isn't getting profitable rates then that fsc money is a big deal. I roll about 7-8k miles a month and not cheaply. Every month since March was above $2.10 a mile all miles in,last month was $2.90, this month is $3.22 and next month should have me at about$4 a mile if all holds well. My rates never go down if the price of fuel drops. I don't break it out,maybe for you that is something you need to bother with.

 

Breaking out the fsc may or may not result in the owner operator receiving more money. It can make the owner operator feel better and that they are making more money when they see it broken out. The owner operator could be making more money by the fsc being broken out, but that may not always be the case. I agree that whomever buys the fuel should receive any fsc that is collected. I would rather just negotiate a better rate and not worry about the fsc. The idea is to make money.