Fuel Prices are steadily increasing

fuel usually goes up in the winter as the demand for home heating oil, especially in the NE increases. But EVERYTHING makes the price go up. BillyBob at the refinery has heartburn will make it increase.

 

With higher fuel prices, an increase in fuel efficiency is worth more.

For example: 6 mpg at $2.00 fuel costs $.3333 per mile to run. If you get 6.1 mpg at $2.00 fuel, it'll cost you $.3279 per mile. A savings of $.0055 per mile.

But if fuel is $3.50 the difference between 6 and 6.1 is $.0096 per mile. That's over 4/10 of a cent per mile increase.

If you underestimate your fuel efficiency when calculating your FSC, higher fuel prices are money in your pocket.

 

OP, you're not going to call a broker and tell them how much fuel surcharge you're going to charge them. You'll negotiate a rate, and it's up to you to know what you can do the load for, based on the price of fuel, among other things. When these guys say they made more money when the price of fuel was higher, it's because the price of freight was up more than enough to cover the difference. In other words, if a someone is trying to price freight based on 6mpg, but then you take it and you actually get 6.7mpg, you pocket the difference. Does that make sense?

 

Yes, but my point is your profit will increase as fuel prices increase. Even if you drive exactly the same way and get exactly the same mileage.

Another consideration is that when fuel spiked in 2008, a lot of carriers had contracts without FSC written in. They had agreed to haul for a rate that was profitable when the contract was written, but was suddenly unprofitable when fuel went up. A lot of those carriers went out of business, but remaining carriers aren't likely to make that mistake if fuel spikes again.

 

I made more when fuel was high because my rates where going up faster than fuel, one of my customers went from $800.00 to $1,000.00 for a 500 mile load in less than a month, plus there was a crap load of freight from my shippers that they could not cover which in turn raised rates even more untill the economy fell then every tom,dick and harry came in and cut the rates to steal the work.

 

This ... it's going to be the '70s all over again. $4.00 a gallon ... before it's over we will be wishing for the good old days when fuel was only $4.