Fuel cost question

Discussion in 'Ask An Owner Operator' started by Dockbumper, Aug 13, 2021.

  1. Dockbumper

    Dockbumper Road Train Member

    3,065
    7,077
    Apr 29, 2020
    0
    This question is just curiosity. What do big trucking companies (300+ trucks) pay for a gallon of fuel, with their " buying power" as compared to a one truck operation. Just use today's retail " pump price" as an example. How does the Fuel Surcharge fit into that equation, if at all. Please leave out all of the IFTA calculations. Just raw numbers. Do all of you one truck O/O's even come close to their " bulk contract discounts? This has perplexed me for 5 years. I am a company driver and don't plan to change that. I just look at the pump price of $3.00 per gallon, figure an average of 6 mpg, and get $.50 per mile for FUEL ALONE. How on earth are these lease ops, getting $1.05 per mile, even putting a dollar in the bank each week considering all of the other costs involved. What am I missing. Thanks!
     
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  3. TallJoe

    TallJoe Road Train Member

    5,938
    11,099
    Apr 12, 2016
    Chicagoland
    0
    A solo truck owner operator finds his own fuel card with a fuel discount program. The savings could be huge up to 1 dol off cash price per gallon.
    For a solo truck owner with his own authority, you might as well forget about the fuel surcharge. You don't add your fuel surcharge to your rates in an explicit way when dealing with brokers. The fuel surcharge is not a subject when booking loads and negotiating on a rate. Some brokers, such as C.H. Robinson, Coyote, Schneider do include fuel surcharge but the way it works is that they take your already "agreed on" rate and then split it into the fuel surcharge and the line haul portion, post factum. I am not sure why they do it this way, perhaps for tax purposes.
    But there is not such a thing as an agreed on rate and a mandatory fuel surcharge calculated on the top of it. Fuel Surcharge is something that mega carriers pay to their leased on owner operators.
     
    Judge and Dino soar Thank this.
  4. TallJoe

    TallJoe Road Train Member

    5,938
    11,099
    Apr 12, 2016
    Chicagoland
    0
    The 1.05 per mile operators have the fuel surcharge of let's say 25-75 (?) c per mile, according to a prescribed formula. Effectively, they are running way more than 1.05 per miles... This Fuel Surcharge is increasing as the average fuel price raises, hence the illusion of making more and enjoying better revenue when the prices are high. I say illusion because it seems that whenever the prices raise, so do the rates, which means that it is still better to depend on the market rates than on the poor mileage pay and FSC.
    For example:
    Last year fuel cost: $39,727.78 @ 101 000 miles
    This year YTD spent already $34,770.62 @ 67 000 miles YTD
    no doubt it will surpass the one from the last year but so what since I am already at the profit that almost equals of the entire last fiscal year's profit.
     
    Last edited: Aug 13, 2021
  5. mnmover

    mnmover Road Train Member

    1,182
    1,028
    Apr 5, 2009
    Lichfield MN
    0
    The mega companies are on a "cost plus" program, as is NASTC and others. The price paid is the cost of the fuel to get it to the truck stop and a pumping fee. Like .04 to .05 per gallon. The company I retired from also had the truck stop pay the com data fees. If you use NASTC they can tell you the price of the fuel tomorrow at the truck stop. Mudflap app is also a popular way to buy diesel fuel. .62 off retail at Sapp Bros Clearfield PA.
     
  6. Ridgeline

    Ridgeline Road Train Member

    17,812
    75,485
    Dec 18, 2011
    Michigan
    0
    A few thoughts, first is large carrier is more than 500 trucks.

    Second these carriers of 500+ trucks use between 35,000 and 50,000 gallons a day - 60% of their fleet is moving and using fuel daily at an average of 115 gallons per truck.

    with that amount of fuel being bought, the truck stops have agreements with these carriers to give them a form of cost plus purchasing but there is more to that than the pump prices. While you as an owner/operator see in a cost plus program the price as much as 30¢* off the price at the pump, for these companies pay the actual cost of gallon is adjusted after the transaction is finished.
     
  7. aussiejosh

    aussiejosh Road Train Member

    3,868
    3,517
    Aug 28, 2009
    Airlie Beach QLd
    0
    One of the reasons large companies with greater than > 300 tractors can still stay afloat because of the volume they can run on a smaller profit margin where as an O/O needs to make top dollar on every load to stay ahead. The same applies to fuel discounts with 300 + trucks on the road for up to 365 days a year the discounts get up into the millions of $$$$.
     
  8. wis bang

    wis bang Road Train Member

    2,087
    1,806
    Jan 12, 2011
    Levittown, PA
    0
    Really large companies, especially those with their own private terminal fueling can do the best. I remember Matlack was in the futures market and during one fuel crunch parked some trailers at each terminal and filled 'em up with fuel purchased months ago at a lower cost.
     
  9. Cat sdp

    Cat sdp . .

    14,606
    36,001
    Apr 8, 2012
    Orion's Belt
    0
    As a 1 truck operation about all you can do is use nastc fuel card.

    And I try to keep fuel at 25% of gross income 30% absolute max .
     
  10. Midwest Trucker

    Midwest Trucker Road Train Member

    4,300
    12,648
    Aug 31, 2018
    0
    I have no clue but sometimes wonder if it isn’t $1 less per gallon. It would be nice if someone who’s inside a mega could give us insight.

    I wonder if companies like Landstar profit big off their fuel cards? Or maybe 50 or 60 cents is what it is even for the megas.
     
  11. Cat sdp

    Cat sdp . .

    14,606
    36,001
    Apr 8, 2012
    Orion's Belt
    0
    I used to haul fuel in the winter , and only once did the bol for 10,000 gals of fuel oil have a price on it. And this was like a 12 million gallon a year customer. I was shocked that the price wasn’t lower actually. Don’t remember specifics but it wasn’t really low………..

    The major oil companies don’t believe in deals……:-/
     
    Trucker61016 and Midwest Trucker Thank this.
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  • Draft saved Draft deleted