Current FSC rates

Here is a web site that has some info. The prices are dated but the formula to compute them is there.
http://www.aitaonline.com/Info/General/Fuel%20Surcharges.html

 

It really depends on the contract. In my contracts and quotes I have used $1.25 and $.01 for every $.06 rise in price. But have seen people qoute on $3.00 and one that just said "National Average divided by 5.5 MPG".

 

From what I have been able to determine: Some companies figure it as a percentge of the gross revenue of the load, while most figure it as a CPM. Either way it is close to the same and is meant to cover fuel costs in excess of what is considered a stable price.

Most seem to base it on a fuel cost of 1.20 - 1.25 per gallon. I'm not certain what MPG they use to arrive at a figure. Most of the numbers I see are 35 - 45 CPM to the truck.

Here's how I think it works. Say fuel is at 3.90 a gallon. 3.90 - 1.20 = 2.70. Say you get 6.7 MPG. 2.70 / 6.7 = .40 CPM. So the FSC covers 0.40 CPM of the 0.58 CPM of your fuel costs.

Most lease operators, or owner/operators who don't have direct customers, have little to do with FSC. They simply see gross revenue as Rate (rate / miles) + FSC (FSC / miles) and compare that to cost of operation in CPM, since they have no control over it. Those who bill shippers direct have to bill a freight rate, FSC and other fees seperately.

 

To add to this. There is a big difference between "plus FSC" and "100% FSC". What you will likely see is on the fixed per mile rates that the company sets the weekly FSC and percentage gives you back 100% of FSC.
Many a driver getting mileage plus company FSC learns they are not getting 100% and flips not understanding the industry. They assume 100% fsc. But typically, companies paying fixed rate are paying FSC on all miles.
BTW, if you are looking at $.90/mile plus FSC you are looking at $1.30-$1.35/mile. You would have to get your fixed and variable expenses below $1/mile to make what a company driver can make.

 

BigJohn has the calculations pretty dead on for how most carriers are calculating FSC on a per mile basis. Seems like most will use 6 mpg in most of their figures. The 1.20 to 1.25 a gallon base cost is about right. Some will use regional average fuel pricing in the calculation, others will use nationwide average price. And most adjust their FSC on a weekly basis. That is how my carrier does it. However, there is also the added bonus of discounts for fuel off of the cash pump price that makes this whole thing a little better. Getting an FSC based on $4 a gallon and then having somewhere near .25 or more per gallon taken off of the pump price really can make a big difference. Especially if you are getting, say, 1 full mpg better than the 6 mpg the FSC is figured on. In some cases, if you are getting great mpg, you can actually have your entire fuel cost covered by the FSC. I have had that happen sometimes. So, getting the FSC to cover the fuel cost and then getting an average .97 a mile, things can work out quite well if the other costs are managed well.

I know that many will poo-poo the carrier paying .95 and FSC as a losing deal, but if most other costs that would be incurred by an independent are covered by the carrier, it really isn't so bad. If carrier fees are low, and most other things covered by the carrier, that can leave a decent net after all is said. Sure it isn't getting $3 a mile, and it is true, that if one does everything right they can do better as an independent. But it also involves a lot more time and effort. A person is giving up some revenue to have the carrier do all the leg work, but in the end, the net may work out to be fairly close between an independent and a leased owner if the lease on has a good deal.

 

Big John has it mostly right. You only have to worry about a FSC with direct shippers if you have a contract with them that locks in a linehaul rate, otherwise you can use a cost per mile formula on spot rates.

 

I think you made some excellent points here Cowpie. I usually argue against the company lease and the fact that they do not pay a fair market rate. If you manage your costs and understand what you are working with, I believe it is doable. It will cut into profit but that fuel discount at 0.25 CPM is big. If they pay for base plates and fuel taxes and don't charge them back, that is more costs you can subtract from your numbers.

It is hard to even make subjective comparisons because the items furnished, the items charged back and the other benefits like fuel discounts all play into the cost of operation and vary from lease to lease. I love numbers and it makes my head hurt to try to get and compare the facts.

 

The current national fuel surcharge rates for various shipping methods, effective June 22, 2011, are listed below:

Dedicated Truck Load Fuel Surcharge Rate (TL)= $0.64/mile
Truck Load Fuel Surcharge Rate (LTL)=60.80%
Less than Truck Load (LTL) Fuel Surcharge Rate=30.40%

The current national fuel surcharge rate is based upon $3.950 price per gallon for diesel fuel