Fuel Surcharge

The explanation you gave of the fuel surcharge was pretty good. You did, however, forget one thing and thus gave a partially innaccurate answer my friend. The fuel surcharge has never been meant to pay the ENTIRE fuel bill. It was set up to offset the rising costs. Your example used a zero cost as the baseline and that is the inaccuracy. Most companies that use a mileage based fuel surcharge use a baseline somewhere near $1.25 per gallon give or take. SWo, using your price of $4.64 per gallon and a base price of $1.25 per gallon and 6 mpg, the fuel surcharge would be .565 per mile.

Most of the big companies use a surcharge formula pretty similar to what I described. The ones that pay the .90 per mile usually pay that rate for all miles thus deadhead is not an issue. Many also will pay for plates, permits, and other items such as this too. You just have to do a LOT of research as to exactly what they pay and what they don't pay so that you can make an apples to apples comparison.

The friends you are talking about that like the high fuel prices because of the high surcharge that goes with it, are making money on the margin. If the fuel surcharge is based on 6 mpg and your truck gets better than 6, the higher the fuel goes the more you will make due to the margin.

The secret to success when leasing to big companies is to find one that pays fuel surcharge on all miles and not just loaded miles. If you look very hard you can find companies that pay surcharges based on either 5.0 or 5.5 miles per gallon. That is huge. If you get 7.0 mpg in your truck, and get a fuel surcharge based on 5.0 mpg....well, you can do the math.

To answer the original poster's question; Would I want to try to make it at a company paying .90 per mile plus fuel? NO....But can it be done? Absolutely. You just need to watch your expenses(especially fuel costs) very closely.

 

THANKS ESKIMO

It's like I said,I don't deal with it and was going off what little I did know,so I'm glad you answered it correctly for them.THANKS AGAIN!

 

How did you come up with the $1.75?

 

I didn't come up with it this is the company I am leased to FSC fourmula all in all it is fair FSC and 1.75 what fuel was at when I started getting a surcharge and the 3.5 mpg was a fleet avarage at the time on long runs it is very good it covers all my fuel as my mpg is 6.7 when the truck just rolls